## Documentation Index

Access the complete documentation index at:
https://www.zoho.com/es-mx/books/llms.txt

Use this file to discover all available documentation pages before proceeding.

# Payment Retention

In many businesses, customers retain a certain percentage of the total invoice amount and pay it later. This ensures the commitment and loyalty of their key partners like manufacturers, suppliers, or dealers.

In Zoho Books, you can enable payment retention and associate a rate with it. A portion of the total invoice amount will be set aside based on the retention percentage. Upon successfully fulfilling the contract terms, your customer will pay the retention amount as specified in the agreement. This can be further recorded through an invoice or a manual journal.

**Scenario:** Aaron, the owner of a construction firm, secures a contract with Hugh for a residential tower project. The total cost of the construction is $4,500,000. Hugh retains 10% ($450,000) and makes an upfront payment of $4,050,000. He pays the retention amount upon completion of the project. Aaron then easily records this amount in Zoho Books.

Learn more about how payment retention works in Zoho Books below.

## Enable Payment Retention

To enable payment retention in Zoho Books:

*   Go to **Settings**.
*   Select **General** under Preferences.
*   Scroll down to _Payment Retention_ and slide the toggle to enable it.
*   In the _Enable Retention_ pop-up, enter the required details:

**Fields**

**Description**

**Retention Name**

Enter the name of the retention.

**Rate %**

The percentage that you and your customer have mutually agreed upon to be withheld.

**Description**

You can provide a description for the retention if required.

**Receivable Account**

Select the account under which the retention receivables will be tracked.  

**Note:** If no account is selected for the retention, it will be tracked under the Retention Receivable account by default.

**Payable Account**

Select the account under which the retention payables will be tracked.  

**Note:** If no account is selected for the retention rate, it will be tracked under the Retention Payable account by default.

*   Click **Save and Enable**.

The Payment Retention feature will be enabled.

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## Configure Payment Retention in Invoices

You can configure the retention amount while you create or edit an invoice. Here’s how:

*   Go to _Sales_ on the left sidebar and select **Invoices**.
*   Click **\+ New** in the top right corner and create a new invoice. Or go to an existing invoice and click **Edit**.
*   Click **Configure Retention** below the Total. The _Configure Retention_ pop-up will appear.
*   Associate a retention from the drop-down. Zoho Books will automatically calculate the retention amount from the sub total (excluding tax) and display the balance due.
*   Click **Save and Continue**.

Payment retention will be configured in the invoice. Similarly, you can also configure payment retention for bills.

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## Record Payment Retention

Later, when you receive the retention amount from the customer, you can record it in a couple of ways in Zoho Books.

*   [Create a Retention Claim Invoice](/es-mx/books/help/payment-retention/#Create-a-Retention-Claim-Invoice)
*   [Create a Manual Journal for the Retention Amount](/es-mx/books/help/payment-retention/#Create-a-Manual-Journal-for-the-Retention-Amount)

### Create a Retention Claim Invoice

Before recording the payment, you must send your customer a retention claim invoice. To do this,

*   Go to _Sales_ on the left sidebar and select **Invoices**.
*   Select the invoice for which you want to record the retention payment.
*   On the invoice’s _Details_ page, click the dropdown next to _Retention Summary_. The retentions associated with that particular invoice will be listed.
*   Click **Create Claim Invoice**, a new invoice page with pre-filled retention details will appear.
*   To add additional retentions to the same invoice, click **Add Retention Claim** below the _Item Table_.
*   In the _Select Retention_ pop-up, select the retentions you’d like to claim with this invoice.
*   Click **Add as Line Item**.
*   Click **Save as Draft** to send it to the customer later, or click **Save and Send** to send it immediately.

You can then record the payment for this invoice. Learn more about [recording an invoice payment](https://www.zoho.com/es-mx/books/help/invoice/record-payment-for-invoice.html).

### Create a Manual Journal for the Retention Amount

You can also record the retention amount received by creating manual journals.

To do so:

*   Go to _Accountant_ on the left sidebar and select **Manual Journals**.
*   Click **\+ New Journal**.
*   Fill in the necessary details.

**Pro Tip:** You can add the invoice number in the **Reference#** field to track which invoice the retention belongs to.

*   Select the retention account as the _Credit_ and the cash or bank account as the _Debit_ account and enter the amounts.
*   Once you enter these details, click **Save and Publish** or **Save as Draft** to publish it later.

The published journal indicates that the retention amount withheld by the customer has been paid. Learn more about [manual journals](https://www.zoho.com/es-mx/books/help/accountant/manual-journal.html) in Zoho Books.

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## Other Functions in Payment Retention

### Edit Retention

To edit the retention after associating it to an invoice:

*   Go to _Sales_ on the left sidebar and select **Invoices**.
*   Select the respective invoice for which you want to edit the retention.
*   Click **Edit** at the top of the invoice’s _Details_ page.
*   Click **Configure** in the _Retention Summary_ section.
*   In the _Configure Retention_ pop-up:
    *   Select the desired retention rate or edit the amount to make the necessary changes.
    *   Click **Save and Continue**.
*   Click **Save**.

### Delete Retention

You can delete a retention if you no longer use it.

To delete a retention:

*   Go to **Settings**.
*   Select **Invoices** under _Sales_.
*   Scroll down to the _Payment Retention_ section. Click the **Delete** icon next to the retention rate you want to delete.
*   Click **Delete** in the pop-up that follows to confirm the delete action.

The retention will be deleted.

### Disable Payment Retention

If payment retention is no longer required for your business operations, you can disable it in Zoho Books. Here’s how:

*   Go to **Settings**.
*   Select **Invoices** under _Sales_.
*   Scroll down to _Payment Retention_ and slide the toggle to disable it.
*   Click **Disable** in the pop-up that follows to confirm disabling this feature.

The payment retention feature will be disabled.