What is retention in SAP PSM-GPR - Procurement for Public Sector?

SAP Term: retention

• Component: PSM-GPR

• Component Name: Procurement for Public Sector

• Description: A means of mitigating financial risks by blocking a certain amount of the monetary transaction until completion of an order.

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• Key Concepts: 
  Retention in SAP PSM-GPR Procurement for Public Sector is a process that allows the buyer to withhold a certain percentage of the total payment from the supplier until the goods or services have been delivered and accepted. This is done to ensure that the supplier meets all of the requirements of the contract and that the buyer is satisfied with the quality of the goods or services. 
  
  How to use it: 
  In order to use retention in SAP PSM-GPR Procurement for Public Sector, the buyer must first specify a retention percentage in the contract. This percentage will be applied to all payments made to the supplier. Once the goods or services have been delivered and accepted, the buyer can then release the withheld amount to the supplier. 
  
  Tips & Tricks: 
  When setting up retention in SAP PSM-GPR Procurement for Public Sector, it is important to ensure that the retention percentage is reasonable and fair. It should not be too high as this could discourage suppliers from bidding on contracts, but it should also not be too low as this could leave buyers vulnerable to poor quality goods or services. 
  
  Related Information: 
  Retention is just one of many features available in SAP PSM-GPR Procurement for Public Sector. Other features include payment terms, delivery terms, and dispute resolution. All of these features can help buyers and suppliers manage their contracts more effectively and ensure that both parties are satisfied with their agreement.