Retainage

Definition

Money a general contractor holds back from every invoice until a job is finished.

Why It Matters

On commercial work it commonly runs a tenth of the contract and sits unpaid for months after the electrician has left the site, which makes it working capital the buyer funds and not revenue the buyer collects. A book heavy in general-contractor work therefore needs more cash behind it than the same revenue in service calls. Ask for retainage receivable by job and by age, because the oldest balances are the ones somebody has stopped chasing.