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