Retainage is not late money. It is your profit, held.
Ten percent held back sounds small until you notice that ten percent is bigger than most builders' net margin. You finished the work, you paid the crew, you paid the subs — and the only part of the contract you have not been paid is the part you were going to keep. Enter your numbers below.
Revenue billed across the year.
The standard is 5–10%. Some states cap it.
How long it sits, and what that costs
From when you earned it to when it lands.
Your line of credit rate, or what the money would earn elsewhere.
For context
Passing it down offsets the squeeze.
This is the money you were going to live on, lent to your customers at zero percent, on terms you did not negotiate.
What actually shortens it
| Lever | How it works |
|---|---|
| Negotiate the release trigger | Tie release to substantial completion, not final completion or the owner's move-in.“Final” is a word that can absorb four months of punch list. |
| Step it down | 10% to 5% at 50% completion is a common and very winnable ask. |
| Pass it down | Hold the same percentage from your subs that is held from you. If you do not, you are financing their retainage too. |
| Close the punch list early | Retainage almost never releases on the money. It releases when the last item is signed off.The punch list is the actual gate. Treat it like one. |
| Invoice it | Retainage sitting unbilled after release conditions are met is just an invoice nobody sent. |
Know your state's rules. Retainage is regulated at state level — caps, release deadlines and interest on late release all vary, and public work usually follows a different statute than private. Several states cap it at 5% and require release within a set number of days after substantial completion. Worth ten minutes with your attorney once, because it applies to every contract you sign after that.
Do this at scale
Retainage is a billing problem before it is a cash problem.
You cannot chase what you are not tracking, and most builders have no single place that says which jobs are holding how much, since when.
Billing & Collections Blueprint
AR aging, invoice and draw request tracking, and a retainage log per job so released money gets billed instead of forgotten.
Company Cash Flow Report
What is actually in the bank versus what is owed to you, month by month, with retainage shown as the timing gap it really is.
Excel and Google Sheets · one-time purchase · single-business commercial license