Retentions and snagging: protecting the last five percent

The first ninety-five percent of a job's money is earned with bricks and sweat. The last five percent is earned with paperwork, follow-through and a certain polite persistence. Plenty of building firms do excellent work and then donate that final slice through weak snagging habits and unchased retentions. This is how to stop.

What retention is, and where you will meet it

A retention is a slice of each payment, commonly around five percent, that the client or main contractor holds back as security that you will finish properly and return to fix defects. Typically half of it is released at practical completion and the other half at the end of the defects liability period, often six or twelve months later. On domestic work retentions are less formal but very real: they appear as the homeowner who "just wants to hold a bit back until the snags are done", or the final invoice that drifts unpaid while life moves on.

On commercial and subcontract work, retention is contractual and standard. If you price main contractor or commercial work, assume retention terms exist, read them before signing, and know the release dates as precisely as you know the start date.

What five percent actually costs you

Here is the uncomfortable arithmetic. Suppose you run at a ten percent net margin. A five percent retention on a job is half of your entire profit on that job, sitting in someone else's bank account. If the second half of a retention quietly never gets released, and across the industry a shocking amount never does, you did a quarter of the job's profit-earning work for free. Now multiply by every job in a year. A firm turning over 600,000 GBP with five percent retentions has 30,000 GBP in other people's hands at any time, interest-free, at risk of their insolvency, and recoverable only by a process you have to drive.

Snagging is a process, not a mood

Retention gets released when defects are closed, so snagging speed is literally cash flow. The firms that get their money treat snagging as a managed stage of the job with its own habits:

• One list, owned by you. Walk the job with the client before they compile their own list on a wet Sunday. A snag list you wrote together is finite; a drip-feed of texts is not. Get it agreed in writing, with photos.
• Dates, not intentions. "We will be back Tuesday the 12th to close items 1 to 9" converts goodwill into a schedule.
• Close loudly. Photograph each completed item and send the annotated list back. You are building the evidence file that justifies release, part of the wider habit described in the digital paper trail: winning disputes before they start.
• Separate snags from wishes. A defect is work not matching the agreed specification. A new idea is a variation, priced as one, as covered in variations and extras: pricing changes without the fallout.

On domestic jobs, structure beats hold-backs

Homeowners rarely propose a formal retention; they improvise one by delaying the last payment. You can pre-empt that with structure. Set a final stage payment that is small enough for the client to release without anxiety, say two or three percent, explicitly tied to an agreed snagging walk-through and list completion. Put the arrangement in the quote itself, alongside your other stage payments that protect your cash flow. A client who can see a defined, fair end-game pays the last invoice; a client facing a vague "that's everything, can we have the balance" often does not.

Whatever you agree, keep the last payment proportionate. A final stage of fifteen percent is not a retention, it is a hostage situation you built for yourself.

Price the cost of the tail

Snagging visits, the defects period, and the financing cost of held retention are real costs of doing business, and they belong in your margin thinking rather than as a surprise. If commercial clients hold five percent for a year, your pricing to those clients should quietly reflect the funding cost and the risk. This is one more reason quotes need to be built from your own numbers rather than generic rates: your terms, your risk, your margin. That is the core of how QS Quoter works, with your rates, your margin settings and stage payment terms presented cleanly on a client-ready quote, every line editable, and a private copy that keeps your cost basis and the tail in view.

The last five percent of every job is the difference between a busy year and a profitable one. Guard it with a list, a camera and a calendar.