We do it the way that you describe, because we use Sage.  However we wait to bill the retention until its closer/likely to have the payment processed by the GC (in our case).  We communicate with them on when it is ok to bill it, to prevent it from aging out in our report.

As a GC, we don't bill retainage until we are sending the bill to the owner because we have reached substantial completion. At that time, the retention IS "current contracts receivable". As shelley says, that can be more complicated for subcontractors since their part of the project can come early in the job. I think Shelley has the right idea for subcontractors. Communicating with the GC on when they are billing retainage before billing retainage in your system would make sure that you aren't billing retainage too soon.