Work order format for contractors: the fields, a sample, and how it ties to RA bills

The BOQ prices a fit-out for the client, and RA bills get it paid as the work moves. Between them sits the document that decides whether your subcontractors’ bills reconcile: the work order. Issue a WhatsApp message with a lump sum and every bill becomes a negotiation. Issue a structured one and each running bill can be checked line by line.

What a work order is

A work order (WO) is a written order to a contractor or subcontractor to carry out defined work at agreed rates, within a schedule, on stated payment terms. Clients issue them to main contractors; main contractors issue them to the carpentry team, the false-ceiling crew, the electrical contractor.

Two properties define a good one:

• It is carved out of the BOQ. It lists the exact BOQ items the subcontractor will execute, with quantities and rates. In effect, it is that subcontractor’s own BOQ.
• It is accepted before work starts. The contractor signs a copy. From then on, their RA bills are measured against it, and their final bill closes it.

A WO can be labour-only (you supply material) or labour plus material. The format is the same; the tax treatment is not.

The work order format: five blocks

Block	What it contains	Why it matters
1. Parties and references	WO number and date, both parties’ addresses, GSTINs and PAN, project and site, main-contract reference, BOQ and drawing revision	Ties every bill to one version of the scope
2. Scope	BOQ items included, specifications, exclusions, who supplies material, scaffolding, power and water	Stops “not in my scope” at the final bill
3. Quantities and rates	Unit, quantity, rate and amount per line; whether rates include material; WO value before GST	The ceiling every RA bill is certified against
4. Schedule and penalties	Start, milestones, completion date, liquidated damages (LDs) per week of delay with a cap, defect-liability period	Makes delay cost something, in writing
5. Payment terms	RA billing cycle and measurement, retention and its release, advance recovery, GST, TDS, payment period	Decides how fast cash moves and what you hold back

Three legal points shape blocks 4 and 5:

• LDs are a ceiling. Under section 74 of the Indian Contract Act, 1872, when a contract names a sum for breach, the other party gets reasonable compensation not exceeding that sum, whether or not actual loss is proved. Write a realistic figure and a cap.
• Micro and small subcontractors may have a payment deadline. Where the MSMED Act, 2006 applies and the subcontractor is a micro or small enterprise with valid Udyam registration, the payment period agreed in writing cannot exceed 45 days from the day of acceptance or deemed acceptance, and late payment carries compound interest, with monthly rests, at three times the bank rate notified by the RBI. High Courts have differed on whether composite works contracts fall under these provisions, so take advice before relying on either view. A payment period of 45 days or less avoids the question.
• Plan for TDS. TDS on payments to contractors now falls under section 393(1) of the Income-tax Act, 2025. Say in the WO that tax will be deducted at source where the law requires it.

A sample work order

WO-014, a dry-wall subcontract on an office fit-out, issued by the main contractor to the subcontractor (names, addresses, GSTINs), referencing client BOQ revision 3 and drawings revision C. Labour plus material.

#	BOQ ref	Item	Unit	Qty	WO rate (₹)	Amount (₹)
1	2.1	Gypsum board partition	sqm	48	1,150	55,200
2	3.1	Grid false ceiling	sqm	120	760	91,200
3	3.4	Gypsum bulkhead	rmt	36	500	18,000
		WO value before GST				1,64,400

Below the lines, the terms block:

• GST at 18%: ₹29,592, so the WO value including GST is ₹1,93,992
• Schedule: start within 3 days of acceptance, complete within 21 days
• LDs: 0.5% of WO value (₹822) per week of delay, capped at 5% (₹8,220)
• Billing: fortnightly RA bills on joint measurement against the three lines
• Retention: 5% of each RA bill before GST (₹8,220 across the full WO), released after a 12-month defect-liability period
• Payment: within 30 days of certification, TDS deducted as applicable

The rates are illustrative, and they sit below the client rates in our RA bill example (₹1,450 for the partition, ₹950 for the ceiling). That gap is the main contractor’s gross margin, which is why each WO line names the BOQ line it comes from.

Work order vs purchase order

	Purchase order (PO)	Work order (WO)
Buys	Goods: material, fittings, equipment	Executed work: labour, or labour plus material
Issued to	Supplier	Contractor or subcontractor
Quantities	Delivered	Measured as work is done
Closes on	Delivery and goods receipt	RA bills, then a final bill
Typical deductions	Short supply, rejected items	Retention, advance recovery, LDs

On a fit-out you often issue both against the same BOQ: a PO to the board supplier, a WO to the dry-wall crew. If you supply the material, make the WO labour-only and say so, or you pay for the boards twice.

On tax, GST treats a works contract (building, fitting out, repair and similar work on immovable property, where goods are transferred during the work) as a supply of services, taxed at a general rate of 18% (9% CGST + 9% SGST). From 22 September 2025, some categories that were at 12%, including government works contracts that are mainly earth work (over 75% of the value) and their sub-contracts, also moved to 18%. A main contractor can claim input tax credit on a subcontractor’s works-contract invoice, because its own output is a works contract. A pure labour WO, where the subcontractor supplies no material, generally falls outside that definition because it turns on goods being transferred, so check its classification and rate separately.

How a work order links to RA bills

• WO lines become RA bill lines. Each subcontractor RA bill lists the WO items with quantity to date, WO rate, previously billed and this bill: the RA bill format, one level down.
• WO quantity is the ceiling. Billing beyond it needs an amended WO first.
• Deductions come from the WO. Retention, advance recovery and LDs on each bill are whatever the WO says.
• The final bill closes the WO and starts the defect-liability clock for retention release.

Where work orders cost contractors money

1. Lump-sum WOs with no lines. “False ceiling, ₹2 lakh” cannot be measured, so RA bills become percentage guesses.
2. Scope changes never amended in. The client approved an extra partition on the main contract; the subcontractor’s WO never changed. Now they bill for work their WO doesn’t cover, or build it free and argue later.
3. Terms that don’t match the contract above. The client holds retention for 12 months; you release your subcontractor’s at handover. The client deducts LDs; your WO has none. Each mismatch is you financing the gap.

The root cause is the same as RA-bill leaks: BOQ, variations, work orders and bills live in different documents, so nothing reconciles on its own.

Keeping work orders tied to the BOQ

The fix is one baseline. That’s the job Boqos does for interior fit-out firms: AI generates the BOQ from scope, every variation is priced, client-approved and added to the contract before work starts, purchase orders link to BOQ line items so landed costs are tracked against estimates, and billing runs off approved milestones. Carve your work orders from that baseline and every subcontractor bill has one set of lines and rates to check against.

A template with the five blocks above works for one project. With three sites and five subcontractors each, keeping fifteen WOs in step with a moving client BOQ by hand is exactly what slips. Pricing for the client instead? Start with the quotation format for interior work.

The short version

A work order is the subcontractor’s BOQ and contract in one: references, scope from the BOQ, quantities × rates, schedule with penalties, and payment terms with retention, GST and TDS. Get it accepted before work starts, amend it whenever the client’s scope changes, and every RA bill against it can be checked line by line.