RA bill in construction: meaning, format, and how it ties back to your BOQ
On any fit-out or construction project that runs longer than a month, you don't bill once at the end — you bill as the work progresses. That interim invoice is the RA bill (running account bill): the cumulative value of work actually done, measured against the BOQ you signed, minus everything already billed, minus retention. It's how cash actually flows on site — and where a lot of it quietly leaks. Here's the working guide: what an RA bill is, the format that holds up, a worked ₹40L example whose maths tie out, and the three places RA billing loses contractors money.
On a fit-out or construction project that runs three, six, twelve months, nobody bills once at the end — cash has to move while the work moves. The instrument for that is the RA bill: the running account bill. If the BOQ is the document a project is priced on, RA bills are how it gets paid — and the gap between the two is where contractors quietly lose money.
What an RA bill is
RA = Running Account. An RA bill is an interim invoice raised while work is in progress — numbered RA-1, RA-2, RA-3 and so on. Each one certifies the cumulative value of work executed to date, measured line by line against the BOQ, and then bills only the part that hasn’t been billed before.
Two properties define it:
- It’s cumulative, not standalone. RA-2 doesn’t invoice “what we did in June.” It certifies everything done since day one, then subtracts what RA-1 already billed. That structure means every bill reconciles back to one baseline — the BOQ — and errors can’t silently compound.
- It’s measured, not estimated. The quantities in an RA bill are supposed to come from actual site measurement (ideally jointly recorded with the client’s engineer or PMC), valued at the rates locked in the BOQ. That’s why a sloppy BOQ makes every RA bill a negotiation.
The last bill on the account — after 100% completion and reconciliation — is the final bill, which also triggers the release of retention.
The RA bill format
The format mirrors the BOQ, with three extra columns doing the running-account work: executed up to date, previously billed, and this bill.
| # | BOQ item | Rate (₹) | Qty executed to date | Value to date (₹) | Previously billed (₹) | This bill (₹) |
|---|---|---|---|---|---|---|
| 1 | Gypsum partition (sqm) | 1,450 | 40 of 48 | 58,000 | 34,800 | 23,200 |
| 2 | Vitrified flooring (sqm) | 1,180 | 120 of 120 | 1,41,600 | 70,800 | 70,800 |
| 3 | Grid false ceiling (sqm) | 950 | 60 of 120 | 57,000 | 28,500 | 28,500 |
Below the line items, every RA bill carries the same summary block:
- Gross value of this bill — cumulative value minus previously billed
- Less retention — typically 5%, held as security against defects
- Less advance recovery — proportional recovery of any mobilisation advance
- Add GST — on the taxable value
- Net payable — what actually hits your bank
A worked example that ties out
Take a ₹40,00,000 office fit-out, 5% retention, billed monthly:
| Bill | Work complete | Cumulative value (₹) | This bill gross (₹) | Retention 5% (₹) | Net certified (₹) |
|---|---|---|---|---|---|
| RA-1 | 30% | 12,00,000 | 12,00,000 | 60,000 | 11,40,000 |
| RA-2 | 60% | 24,00,000 | 12,00,000 | 60,000 | 11,40,000 |
| RA-3 | 90% | 36,00,000 | 12,00,000 | 60,000 | 11,40,000 |
| Final | 100% | 40,00,000 | 4,00,000 | 20,000 | 3,80,000 |
Total retention held: ₹2,00,000 (exactly 5% of ₹40L) — released after the defect-liability period, typically 6–12 months post-handover. Until then it’s your money working for the client. (GST omitted above for clarity; it’s added on each bill’s taxable value.)
Where RA billing leaks money
The arithmetic is simple. The leaks are operational:
- Work done but never measured. If site progress isn’t recorded per BOQ line, it can’t be billed. Contractors routinely finance the client for weeks of executed work simply because measurement lagged.
- Variations executed but never added to the base. The client asked for the extra partition on WhatsApp; the site team built it; nobody priced it into the billing baseline. Every RA bill after that under-bills. This is the single biggest leak on fit-out projects — and it’s a BOQ-discipline problem, not an accounting one.
- Retention that nobody chases. Retention has a release date. On small firms’ books it often just… stays. Across a year of projects, forgotten retention can quietly equal an entire project’s margin.
Notice all three leaks share a root cause: the BOQ, the variations, and the bills live in different documents — Excel here, WhatsApp there, an invoice template somewhere else — so nothing reconciles automatically.
Keeping the account actually running
The fix is structural: quantities, rates, variations, and bills should live on one baseline. That’s the job Boqos does for interior fit-out firms — the BOQ is built once, client-approved variations update the same lines with a trail, and milestone/RA billing is generated from that live baseline, so every bill reconciles to what was actually agreed and built. Retention sits tracked as a receivable with a release date instead of evaporating.
You don’t need software to raise your first RA bill — a disciplined spreadsheet works at one project at a time. But the moment you’re running three sites in parallel, “keep the running account reconciled by hand” is exactly the kind of promise that breaks — and the leaks above are what breaking it costs.
The short version
An RA bill is the running, cumulative invoice for work done to date: measure against the BOQ, value at agreed rates, subtract what’s billed, hold retention, add GST. The format is simple; the money is lost in the gaps between documents — unmeasured work, unpriced variations, unchased retention. Keep one baseline from BOQ to final bill and the account genuinely runs.