Processing an Installer Chargeback / Deducting from Installer Retainage
Deducting an Installer Chargeback from the Installer's Retainage account balance:
- Open a NEW job with the Customer ID matching the Installer ID (the Customer ID must be identical to their Installer ID), and add a Labor Line with a Sale Quantity of 1 and the Unit Price equal to the amount of the charge back that will be withheld from their Retainage. Change the Ship TO box to reflect the actual Customer's Data for future reference/lookup. Also, if another Installer is being paid to correct this work, enter a Work Quantity of 1, otherwise, leave at zero. Make sure you pay the new Installer through Job Labor Maint./Installer Payments as normal. Invoice the Job.
- In the Installer Payables System, Print the report for just this Retainage item, without selecting any other items for payment. On the A/R Trade Deduction line, there should be a balance equal to the invoice generated in step (a.) above. Enter up to the balance amount and offset with a negative amount on the Retainage line. The system will then prompt you to enter A/R to pay the Invoice
- In A/R, Post Customer Payments, add the payment using the Pay Type "INST" (use the Pay Type w/ G/L Account for Installer Clearing) and apply to the invoice generated in step (a.) above following these steps:
- Accept the Installer’s ID on the Customer ID field
- Accept or override the Posting Period
- At “Receive New Payment?”, key Y
- Enter to accept the Reference Number (automatically generated using IP for Installer Payables with a combination of the date and time)
- Use INST (or similar) as the Pay Type
- Accept or override the Date (defaults to current)
- Accept that Amount (automatically generated based on what was withheld from retainage)
- At “Sort by Invoice Number/Job Number”, press Enter to accept that default of I
- Press Enter on the Invoice
- “Apply Payment to Invoice?”, key Y
- “Add Discount to this Item?”, key N
- “Apply This Check $”, press Enter to accept full amount withheld from retainage
- “Apply Payment, Are You Sure?”, key Y
- ESC out and the system will move you to A/P
* Please Note: Do NOT print a zero check amount from A/P. You have to pay an Installer at least $.01, otherwise the 1099 will not calculate the Retainage as earnings, thereby under reporting wages.
1099's are based on paid money, not accrued money. If there is no check or a zero check, the amount of the Retainage will not be included on the 1099. As an alternative, you can add an Open Item in A/P for a penny and then select the penny item and the zero Retainage Open Item together for a net check of $.01 As long as you select both for payment, the Retainage Amount will update the 1099. The Installer will likely not mind being off a penny. You can also print the penny check and sit on it until all the 1099's are done for the year, then go back and void the check and delete the penny payable. You will need to void the check by back-dating to the year the check was printed and also deleting the payable in that year as well.