Retention, also called construction holdback, is a portion of each payment (often 5 to 10 percent) that a client or main contractor withholds from a subcontractor until the work is completed and accepted. It protects against defects, giving the payer leverage to ensure the job is finished properly before releasing the final funds.
Retention is a central concept in construction finance, and one of the hardest to track. Each invoice carries a retained amount that is not paid now but owed later. These holdbacks accumulate across many invoices, subcontractors, and projects, then release at different milestones, sometimes years apart. Knowing exactly how much is held, for whom, and when it is due demands precise, ongoing reconciliation.
Done in spreadsheets, retention is where amounts get lost: holdbacks never released, releases paid twice, or balances that no longer match the contract.
Phacet brings control to this complexity. The agent that verifies invoices against contract terms reads the retention clause and isolates the withheld amount on each invoice, while the supplier billing control agent keeps cumulative holdback balances aligned with what was actually billed and released. Every figure is traceable through a native audit trail.
The outcome: retention stops being a black box. Finance teams know, at any moment, exactly what is held and what is due, backed by verified data instead of manual tracking.
