Best Practices
Retainage Receivable vs. Retainage Payable: Two Balance Sheet Accounts That Mean Opposite Things
On the contractor's balance sheet, retainage receivable is cash the owner still owes the contractor — held back from pay applications pending project completion. Retainage payable is cash the contractor still owes their subs — similarly held back. They move through different AP/AR cycles, follow different state-law rules, and create different cash flow dynamics. Understanding both keeps the balance sheet clean.
Sarah Blake6 min read