Issue a Deductive Change Order at Contract Close-out
As long as the contract's balance-to-finish value is higher than the amount of the deductive change order, you can use it to reduce the amount you will pay to close out the contract.
- The subcontractor will need to submit an Invoice against the deduct line item creating a credit invoice, that is, a negative dollar invoice.
- After you have approved the negative invoice, you will be able to release all retainage held to date.
- The subcontractor will submit their final retainage invoice which will in turn close out the contract.