Retention balance outstanding refers to the portion of a contractor’s or supplier’s payment withheld by a developer until specified project milestones are achieved or the development is complete. In property development finance UK, this mechanism protects against incomplete or defective work, supporting effective cash flow management and risk mitigation. Typically calculated as a fixed percentage of the contract sum, it remains recorded as a cash outflow liability until release. Managing retention balances is critical for SME property developers to plan liquidity, avoid funding shortfalls, and ensure timely project delivery while maintaining compliance with construction and financial agreements.
This sits beneath Cash Outflow Timing, introducing a more specific variant of the measure without changing its core interpretation.
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