We have agreements with some of the customers and sub contractors we are working with for some of the services we deliver with regards to the payments they owe us [We don’t use Customer Agreement functionality in IFS yet and in App9]
- Invoce 1: There’s a down payment for € 1,000 + 19% VAT - When the CO is released, this has to be settled by the Custmer
- Invoice 2: At an agreed milestone with the cutomer [Note that the customer retains 10% contractual withholding cost of € 2,200]
- Invoice 3: At another milestone of delivering more quantities of the 2 services [Note that the quantities here are cumulative, so is the 10% Contractual Performance Withholding retention by the customer which makes the total retention is € 6,750 only at this point by the customer
- Invoice 4 [Final Invoice] - The services are fully delivered now and the rention goes down to 5% only via a new item called Warrenty Retention, meaning that the balance between € 6,750 and € 5,400 is returned by the customer now
This € 5,400 however is retained by the customer for a period of 5 years and then only returned, given that our delivered services are not interrupted. By this time, the customer agreement is closed and the CO is also closed possibly.
My question is, how to tackle this customer retetion in IFS? For the invoicing part, we could use Staged Billing I believe and am ok with that funcationality. How should we account for this 5% and 10% retentions [should be 2 items ideally] Do you recommend us use the Customer Agreement functionality in IFS?
Thanks!
