Tracking progress payments and retention is one of the biggest financial challenges in construction. Many contractors focus on completing the project but fail to track payments properly. This often leads to delayed payments, cash flow problems, and disputes. This is where bookkeeping for construction business becomes essential. Proper bookkeeping helps you monitor payments, track retention, and keep your cash flow stable throughout the project. What Are Progress Payments and Retention? Progress payments are partial payments made at different stages of a project. Clients release these payments based on completed work or agreed milestones. Retention is a portion of the payment (usually 5% to 10%) that the client holds back until the project is fully completed and any issues are fixed. While progress payments help maintain steady cash flow, retention can create delays in receiving full payment. That’s why tracking both properly is critical.
