Reconciling the retention account
It is a five-minute check that almost nobody does, and it finds errors that would otherwise surface at the final release with a year of interest attached.
QScope Team · 28 January 2026 · 4 min read
The retention account is simple enough to check by hand. Cumulative gross value certified, multiplied by the rate applicable at each stage, less anything released, subject to any cap.
If the figure held does not match, something is wrong, and it is nearly always one of three things.
One: retention taken on the increment rather than the total
Retention is deducted from the cumulative value to date, not from this month’s increment. Deduct it from the movement and the figure is correct in month one and progressively wrong afterwards, because the earlier work never has the rate reapplied when circumstances change.
This is the commonest error and it hides well, because month one looks right and every month after is only slightly wrong.
Two: the rate change at practical completion applied to only half the job
At practical completion two things happen: half of what is held is released, and future deductions run at the reduced rate. Doing one without the other is the classic mistake.
Releasing half but continuing to deduct at the full rate over-retains. Reducing the rate but not releasing under-releases. Both produce a total that cannot be reconciled to anything.
Three: retention counted on things it was never deducted from
Retention is a deduction from a payment. Until a payment has been certified there is nothing to retain from, however many variations have been approved.
An internal figure that counts retention against approved variations, rather than certified ones, will always be higher than what the client actually saw on the notice.
The check itself
- Take cumulative gross certified value at the last certificate.
- Apply the rate that was in force for that period.
- Subtract releases: half at practical completion, the balance on making good.
- Apply any cap.
- Compare to the figure you are carrying.
Do it at practical completion, not at the end
Practical completion is the natural checkpoint, because it is the moment the first release is calculated and everything before it is settled. An error found there costs a corrected notice. The same error found at the final release costs a negotiation about a figure nobody can now reconstruct.
QScope holds retention cumulatively against certified value, so the figure on the notice and the figure on the dashboard are the same calculation.