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

SAP Term: retention amount

• Component: PSM-GPR

• Component Name: Procurement for Public Sector

• Description: A portion of payment that a public sector organization withholds until completion of an order to mitigate financial risks.

Smart SAP Assistant

• Key Concepts: 
  Retention amount is a feature of the Procurement for Public Sector (PSM-GPR) component of SAP. It is a sum of money that is withheld from a vendor’s invoice until the vendor has completed all the services or goods specified in the contract. The retention amount is typically 10% of the total invoice amount and is released to the vendor once all contractual obligations have been fulfilled. 
  
  How to use it: 
  In order to use the retention amount feature, you must first set up a retention type in the system. This can be done by going to the “Retention Types” tab in the PSM-GPR component and entering the details of the retention type. Once this is done, you can then enter the retention amount when creating a purchase order for a vendor. The system will then automatically withhold this amount from the vendor’s invoice until all contractual obligations have been fulfilled. 
  
  Tips & Tricks: 
  It is important to ensure that you enter the correct retention amount when creating a purchase order for a vendor. If you enter an incorrect amount, it could lead to delays in payment or even disputes between you and the vendor. It is also important to ensure that you release the retention amount to the vendor once all contractual obligations have been fulfilled. 
  
  Related Information: 
  For more information on setting up and using retention amounts in SAP, please refer to SAP’s official documentation on PSM-GPR Procurement for Public Sector.