What Is Retention Money?
Last Updated Mar 25, 2020 11:56:46 PM ET
Retention money, according to BusinessDictionary.com, is payment for a service that is withheld until the completion of a condition, usually until all conditions are met by the buyer. For example, a manufacturing company can withhold money from a supplier until all machines are installed and working properly.
AccountingDictionary.org states that retention money is a part of a charge for work done by a contractor that is not paid until a period of time after the work is completed. This period allows for deductions to be made if the work proves to be poor. The withholding of payment can also act as an incentive for the work to be completed properly.
More From Reference
Here’s How Online Games Like Prodigy Are Revolutionizing Education
What Are the Steps of Presidential Impeachment?
What Does George Soros' Open Society Foundations Network Fund?
The History of the United States' Golden Presidential Dollars
How the COVID-19 Pandemic Has Changed Schools and Education in Lasting Ways
Fact Check: Is the COVID-19 Vaccine Safe?