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How to Handle Construction Retention for Milestone Billing(Tax on Net Amount+Retention Release)

edited Dec 2, 2025 5:25AM in Ask A Guru 3 comments

I’m working on a milestone-based billing setup where each milestone has a retention amount held by the customer. I would like to clarify the correct way to handle this scenario in NetSuite.

Business Case:

  1. Milestone Billing With Retention Deduction
    • Example: Certified milestone value = RM1,000,000
    • Retention 10% = RM100,000
    • Tax should be applied only on the net amount (RM900,000), not on the retention.
    • Each milestone invoice must show the gross milestone value, retention deducted, and tax calculated on the net.
  2. Retention Release at Final Milestone
    • When the project is completed, the retention amount (RM100,000) will be released.
    • At that point, tax must be applied on the retained amount

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