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

SAP Term: retention rate

• Component: PSM-GPR

• Component Name: Procurement for Public Sector

• Description: A percentage of the total monetary transaction that a public sector organization withholds until completion of an order to mitigate financial risks.

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• Key Concepts: 
  Retention rate is a term used in the Procurement for Public Sector (PSM-GPR) component of SAP. It is a percentage that is applied to the total amount of a contract and is held back until the completion of the contract. This percentage is used to ensure that the contractor meets all of the requirements of the contract and that all services are provided as agreed upon. 
  
  How to use it: 
  The retention rate is set by the customer and can be adjusted depending on the complexity of the project. The retention rate is typically between 5-10% of the total contract amount. The retention rate is held back until all services have been provided and accepted by the customer. Once this has been done, the retention rate will be released to the contractor. 
  
  Tips & Tricks: 
  It is important to ensure that all services are provided as agreed upon before releasing the retention rate. This will help to ensure that all parties are satisfied with the outcome of the project. Additionally, it is important to keep track of any changes in the retention rate throughout the project as this can affect both parties’ expectations. 
  
  Related Information: 
  The retention rate is just one part of SAP’s Procurement for Public Sector (PSM-GPR) component. Other features include contract management, supplier management, and procurement analytics. Additionally, SAP offers a range of other components such as Financials, Human Resources, and Supply Chain Management which can be used in conjunction with PSM-GPR to provide a comprehensive procurement solution.