How to keep Retainage amount information and pay later

Question

Hi,
We have a scenario where in we deduct a certain % of amount from the subcontractor for each bill submitted by him on various types of clauses with him and once the contract is done at the final bill the amount is repaid to him.
How to capture in AP and how can we simplify the solution so that each if we want to see the retainage amount we can retrieve from Oracle.
How can we make a consolidated Payment to Him.
Thanks

Answer 1

Are you on R12 or R11i,
If you are on R12, you can use the retainage feature of AP.
Please find the functionality of Retainage as mentioned below:
Retainage
Supplier invoices are managed and paid as specified by the complex payment terms of
the associated service procurement contract. Service procurement payment scenarios
exist in numerous industries. For example, during the procurement of equipment that
has a long production lead time, such as engineered-to-order items, periodic progress
payments are paid to suppliers by the deploying company. The progress payments are
based on the costs incurred by the supplier or upon delivery of specified milestones
contained in the contract.
Retainage is the act of withholding a portion of a payment until a substantial portion or
all of the work is completed. It is a common practice in project-based construction and
public sector service procurement contracts and is generally used in projects with a high
value or with long-term contracts. A portion of a progress payment is generally
withheld by the buying organization until all work in the contract is complete and
accepted. The percentage withheld is negotiated, defined in the contract, and is based
on the risk factors involved. These risk factors include the performance and reliability of
the supplier.
The retained amount is based on the contractual terms defined in the service
procurement contract or purchase order line. A contract line can be associated with one
or more progress payments. After performing a portion of the contractual work, the
supplier sends a progress invoice to the buying organization, requesting payment
against the service procurement contract line or purchase order.
The progress invoices submitted by a supplier are recorded as Standard Invoices in
Oracle Payables. Oracle Payables withholds a portion of a progress invoice during
matching to these payment lines (2-way matching) or to the receipts of these payment
lines (3-way matching). The retained amount is represented as negative distribution
amounts of type Retainage to the matched invoice line.
Note: No manual override or manual entry of retainage amounts is
allowed.
Oracle Payables supports progress invoices with the following invoice amounts:
• net of retainage
• gross of retainage
Thanks
Manish Jain.