How to Record Retention Bond Fees
Recording the cost of a bond issued to a buyer in lieu of the buyer withholding a portion of payment as retention money.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Bank Guarantee Fees | Expense | 1,200.00 | - |
| Cash/Bank Account | Asset | - | 1,200.00 |
💡 Accountant's Note
Retention bonds allow suppliers to receive full payment early by providing a bank guarantee. The fee for this bond is a cost of trade financing.
Practitioner & Systems Framework
💻 ERP Architecture
Direct expense posting to the project cost center or financing cost center.
⚠️ Audit Flags
Check if the retention amount released matches the bond value.
📄 Required Documentation
Retention bond copy and bank debit notification.
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Discussion & Community Questions
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