This announcement represents a single point in time. Future releases may impact the information below.
For Procore customers in Australia, this feature will be enabled automatically when it is released in mid-January 2020.
For Procore customers in other countries, this feature must be enabled for you by Procore. If you are your company's Procore Administrator, please contact your Procore point of contact to submit a request.
Configure Sliding Scale Retention Settings on Subcontractor Invoices
Procore is pleased to announce the pending release of the new Sliding Scale Retention feature in the Commitments tool. This tool was specifically designed for Procore users in Australia, where retention rules for construction contractors are enforced by laws. In the future, this feature will also be available in other countries. To learn more, see How do I enable the sliding scale feature in Procore?
What is being released?
Using new controls in the Advanced Settings tab of a commitment, Procore users in Australia can now enable up to five (5) unique sliding scale rules on a purchase order or subcontract. Once saved, your settings will automatically adjust retention amounts on your project's subcontractor invoices.
When configuring the retention settings on a commitment, you can choose to apply one (1) of these sliding scale options for each unique retention rule that you decide to add to a commitment:
- X% until Y% of original commitment value is held
This rule lets you hold back X percent of of the original commitment amount until Y percent of the original commitment's value is held.
- X% until Y% Revised Commitment Value
This rule lets you hold back X percent of the revised commitment amount until Y percent of the revised commitment's value is held.
- $ Amount is Held
This rule lets you hold back X percent of a contract amount until a dollar amount that you specify is held.
Once saved, Procore automatically applies your retention rules to each new invoice created for the commitment. It is recommended that you enable your settings before you begin invoicing, as any changes to your rules can only be applied to new invoices.
Why is this important?
Procore users who choose to enable this can now automatically reduce retention on a commitment's invoices based on rules established in that commitment. This provides end users with these benefits from previous versions of Procore:
- Provides an improved method to help owners and contractor's comply with contractual and regulatory retention requirements.
- Eliminates the need to monitor retained values on individual invoices.
- Eliminates the need to manually deduct retainage values in invoices.
- What is sliding scale retention?
- How do I enable the sliding scale retention feature in Procore?
- How do I enable the sliding scale retention rules on a commitment?
- Does sliding scale retention work with the default retainage settings in the Commitments tool?
What is sliding scale retention?
Sliding scale retention refers to the part of a contract amount due that is withheld from a contractor or subcontractor based on a set of variable standards defined in the contract's scope of work. It is an industry-wide best practice and, in some regions, legally regulated to assure that contractors and subcontractors meet all of the job's contractual obligations.
Example: Applying Sliding Scale Retention in Procore
Although the terms of the commitments on your construction project's will vary, here's an example to show how sliding scale retention typically works:
- Let's assume you are a general contractor who has executed a $400,000.00 subcontract with a heavy equipment operator.
- During the course of the project, you plan to make progress payments to the subcontractor. As such, you want to deduct 10% of the amount due on each invoice until 5% of the original commitment value ($20, 000.00) is held back.
- When 100% of the work on the subcontract's Schedule of Values (SOV) is complete, you are obligated to release the first portion of the amount held back. In this example, you want to hold back 2.5% of the $20,000.00 (or $10,000.00).
- In six (6) or twelve (12) months after the first portion of the retention amount was released, your subcontract's terms requires you to release the remaining $10,000.00 that was withheld from the subcontractor.
How do I enable the sliding scale retention feature in Procore?
For Procore customers in Australia, this feature will be enabled for you automatically. If you are a Procore customer in another country, please ask your company's Procore Administrator to send an email request to your Procore point of contact.
How do I enable the sliding scale retention settings on a commitment?
Once the feature is enabled in your company's Procore account, users with the appropriate permissions on the Commitments tool can immediately begin using it on your construction projects. For instructions, see Enable Sliding Scale Retention Rules on a Commitment's Invoices.
Does sliding scale retention work with the default retainage settings in the Commitments tool?
No. When you save sliding scale retention rules on a commitment, those rules override all other retainage settings on the commitment. This includes the 'Enable Completed Work Retainage' or 'Enable Stored Material Retainage' settings under 'Invoice' on the Advanced Settings tab of a commitment.
- Enable Sliding Scale Retention Rules on a Commitment's Invoices
- Configure Settings: Commitments
- Create a Subcontract
- Create a Purchase Order
If you would like to ask questions or share any feedback, please contact firstname.lastname@example.org.