Retention Track will not allow you to link Xero organisations to Retention Track workspaces that are configured for different regions. This means that a UK Xero organisation can only be connected to a UK Retention Track workspace.

Ensure the region is configured correctly in both platforms and contact support if you require any changes to be made.

When connecting your Xero organisation, Retention Track will scan through your chart of accounts and present any valid accounts that could be used as your Retention Debtors and Retention Defect Liabilities accounts.

If your existing account is not shown this means that it has not been configured correctly and we recommend letting Retention Track to create a new pair of accounts for you. If you need assistance with this migration reach out to support and we'd be happy to put you in contact with a technical expert to help.

This error occurs when you try to create a credit note for an invoice who's corresponding contractor in Retention Track is not linked to a contact in Xero. This can easily be solved by navigating to the contractor page and selecting "Link to Xero Contact".

If your workspace is configured for the UK, Retention Track automatically detects line items that use Domestic Reverse Charge (DRC) VAT on your Xero invoices and credit notes. DRC lines are correctly treated as having no VAT, while standard-rated lines on the same invoice continue to use your normal VAT rate.

Retention withheld, released and used are all calculated as normal. The only difference is on payment claims: the inclusive amount of any DRC-withheld retention will equal its exclusive amount (because no VAT is added).

To enable this, you need to map your DRC tax codes once. Go to your company in Retention Track, open the Xero integration card, and under "VAT Reverse Charge Tax Types" click "Configure". Select your Xero DRC tax types (typically DRCHARGE20 and DRCHARGE5) and save. From then on, any DRC line on a Xero invoice or credit note will be picked up automatically — no further action required.

When you edit an invoice in Xero — line items, totals, VAT, dates or status — Xero notifies Retention Track and the updated invoice is pulled in automatically, usually within a few seconds. Your retention balance and contract financials recalculate from the new figures, so what you see in Retention Track stays in sync with Xero.

If an invoice is voided in Xero, Retention Track automatically excludes it from your retention calculations.

There is one important exception. If you have already created a payment claim from an invoice and then edit that invoice in Xero, the claim amount is locked in at the time the claim was created and won't change. The claim and the underlying invoice can end up showing different figures. If you need the claim to reflect the updated invoice, delete the claim and create a new one from the current invoice.

Retention Track follows however you've allocated a credit note in Xero. If you allocate a single credit note across invoices on more than one contract, the retention on that credit note is split between the contracts in the same proportion as the allocation.

For example, a credit note with £100 of withheld retention, allocated £60 to a Contract A invoice and £40 to a Contract B invoice, will show £60 of retention against Contract A and £40 against Contract B. Each contract's view will indicate that the figure has been pro-rated based on its share of the allocation.

A credit note must be allocated to at least one invoice in Xero before it counts towards your retention figures. An unallocated credit note will appear in Retention Track but won't move any retention balance. If you later remove an allocation in Xero, it will stop counting in Retention Track as soon as the change syncs — there is nothing you need to do in Retention Track.

Most invoices only have new retention being withheld by the head contractor, in which case you'll only see a "Retention Withheld" row.

If a single Xero invoice happens to use your Retention Debtors account on both a negative line (new retention being withheld by the head contractor) and a positive line (previously withheld retention being released by the head contractor on the same invoice), Retention Track shows the two amounts separately:

• "Retention Withheld" — the negative line, i.e. new retention the head contractor is holding back on this invoice
• "Retention Released" — the positive line, i.e. previously withheld retention the head contractor is releasing back to you on this invoice

This is a valid way to handle retention in Xero and Retention Track displays it this way so that the figures reconcile against Xero exactly. The invoice's Job Value is the base invoice amount, minus the new retention being withheld, plus any retention being released.

When you mark retention as "used" in Retention Track — meaning some of the retention a head contractor was holding from you will not be paid back, because it's been applied to defect work or otherwise written off — Retention Track creates a manual journal in Xero to record that loss. That journal touches three accounts:

• Your Retention Debtors account — the unrecoverable retention is removed from here
• Your Defect Liabilities account — used to clear any provision you'd set aside for defect work, up to the outstanding defect liability balance
• Your Cost of Sales (COGS) account — used as the offset for any remaining amount, recognised as expense

For example, if a head contractor was holding £1,000 of retention from you and applies £800 of it to defect work rather than releasing it, the manual journal will credit £1,000 against Retention Debtors, debit £800 against Defect Liabilities, and debit the remaining £200 against your Cost of Sales account.

If you weren't asked for a Cost of Sales account during onboarding, you'll see a "No cost of goods sold account linked" warning on the Xero integration card on your company page in Retention Track. Click "Link COGS Account", choose an account of type "Direct Costs" from your Xero chart of accounts, and save. You'll only need to do this once per company.