Retention costs you twice
Retention Calculator
Five per cent held on a £120,000 contract costs about £1,410 once the wait and the share that never arrives are counted.
Retention Calculator
Retention costs you twice. Once for the wait, and again for the share that never comes back. Only the first one is obvious, and neither is usually in the price.
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Three things worth knowing
The uplift needed to cover retention is grossed up, because the extra you add gets retained too. Adding the bare cost leaves you slightly short.
A retention bond costs a fee and releases the cash. Compare the fee against the figure above before assuming a bond is the expensive option.
The share never recovered is the number people guess at. Look at what you actually wrote off last year rather than what you feel it should be.
The same sum, in a workbook
With the margin before and after, and the grossed up uplift to put on the quote.
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