How Retention Affects Project Cash Flow
Retention impacts both the Client and contractor’s cash flow. For clients, it ensures leverage to complete any outstanding work. For contractors, managing retention effectively is essential for maintaining positive cash flow throughout the project. Retention is released once all project deliverables are met and approved.Best Practices for Managing Retention
Contractors should closely monitor the retention amount and ensure that all work is completed to quality standards. Maintaining good communication with clients to resolve any outstanding work will help ensure that retention is released promptly upon project completion.Related Terms: Interim Payment, Progress Payment