Purchasing · Daily operations · 8 min read

Retentions, early payments and payment holds

Hold part of a supplier bill until work is accepted, offer to pay early for a discount, and stop a bill or a supplier from being paid.

Before you begin

• Retentions need the Retentions on bills feature switch. Early payments need Early payment offers.
• Releasing a retention needs purchase.retention.release. Offering, settling or withdrawing an early payment, and placing a payment hold, need payment.prepare. Releasing a payment hold needs payment.approve.

Hold a retention

1. On the purchase order, open Other information. Enter Retention % (0 to 100) and Retention due after (days). A percentage without days is refused: 'Enter the number of days after the bill that the retention falls due.'
2. Post the bill as usual. The retention is taken from each bill's net amount.
3. Review the held amounts in Purchase > Billing > Retentions held (tabs Held, Released, All).

Release a retention

1. Open Retentions held and find the row. A person who raised neither the bill nor its order presses Release.
2. Type the Release reason, for example Completion certificate CC-114 signed, and confirm.

Worked example. Bill net 1,000.00 plus VAT 50.00 is 1,050.00. Retention 10% is 100.00. Outstanding stays 1,050.00, but Payable now is 950.00. Payments are refused above 950.00 until the retention is released. Due for release is the bill date plus 365 days. The date is a reminder only; nothing releases automatically and release before that date is allowed.

Offer an early payment

1. Open Purchase > Billing > Early payments and press Offer early payment.
2. Choose the posted Bill, enter We pay on (today or later, before the due date) and the Annual rate (%) (above 0, up to 50).
3. Press Send offer. The supplier sees it in the portal under Early payment offers and accepts or declines.
4. When the offer is accepted, pay the bill the discounted amount on or before the pay day.
5. Open the offer and press Settle. Withdraw an open offer with Withdraw and a reason.

Worked example. Bill 10,500.00 due 30 November, pay on 10 November, rate 12%. That is 20 days early. Discount: 10,500 x 12% x 20 / 365 = 69.04. To pay: 10,430.96. Settling posts a debit note of 69.04 against the bill.

If a retention of 100.00 is held and 200.00 was already paid on a 1,050.00 bill, the base is 750.00, not 1,050.00.

Place a payment hold

1. Open Finance > Payment holds and press Place a hold.
2. Choose A bill or A supplier, pick which, and type a Reason.
3. To lift it, a person with payment.approve presses Release and types a note.

What happens next

• Retention: while held, payments stop at the payable-now amount. Reversing the bill cancels the retention.
• Early payment: statuses are Offered, To pay, Paid early, Lapsed and Withdrawn. An unanswered offer past its answer date, or an accepted one unpaid after the pay day, lapses, and the bill is owed in full.
• Payment hold: paying that bill or that supplier is refused with '<BILL> is on payment hold: <reason>' or 'This supplier is on payment hold: <reason>'.

Good to know

• Release refused to the makers: 'Somebody other than whoever raised the bill or its order releases the retention.' Without the right: 'Releasing a retention needs the retention release right.'
• Offer refusals: 'Only a posted bill is paid early.', 'EP-0001 is already open on this bill.', 'Nothing is left to pay on this bill.', 'Pay on today or later.', 'Paying early means before the due date (2026-11-30).' A tiny amount: 'At that rate the discount rounds to nothing.'
• Settle too soon: 'Pay 10430.96 against the bill, dated on or before <date>, first.'
• The supplier cannot answer after the date: 'This offer has lapsed.' Twice: 'This offer has already been answered.'
• A second hold on the same bill or supplier: 'That is already on payment hold.' A hold needs a reason on the screen.
• The same person who placed a hold may release it if they hold both rights; there is no second-person check on holds.