This announcement represents a single point in time. Future releases may impact the information below.
Feature Announced: Wednesday, August 5, 2020 | Feature Released: Friday, August 7, 2020
Sliding Scale Retention Now Available in All Countries
Procore is pleased to announce an update to the project's Commitment tool. The update is the Sliding Scale Retention feature, which was initially released in January 2020 to Procore customers in Australia. It is now available to customers in all countries, including the United States and Canada. Users with 'Admin' permission on the project's Commitments tool have the ability to enable it on your Procore construction projects. For step-by-step instructions, see Enable Sliding Scale Retention Rules on a Commitment's Invoices.
What is included in this release?
After the feature is enabled, project users can use the new controls in the 'Advanced Settings' tab of a commitment to 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. To learn more, see How do I enable the sliding scale feature in Procore?
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?
- 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 portion of a contract amount due that is withheld from a contracted party (the party doing the work) by the contracting party (the party paying for the work). The amounts withheld are based on a set of variable standards defined in the contract's scope of work. It is an industry-wide best practice in Australia, as well as legally regulated, to assure 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?
The default setting on your company's Procore account is OFF. After this feature is released, 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.