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What is RA Bill (Running Account Bill) in Construction?
India Complete Guide 2026

An RA bill, or Running Account bill, is an interim bill for construction work completed during a contract. It usually shows cumulative measured work, subtracts amounts previously certified, and identifies the current period’s value. Contract deductions, recoveries and applicable taxes are then handled separately. It supports progressive payment before the final account is settled.

Construction Guide — On This Page
  • RA Bill Definition
  • When RA Bills Are Used
  • RA Bill Format
  • How to Calculate
  • Retention & Advance
  • GST on RA Bills
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Construction Guide

RA Bill Definition

An RA bill connects site measurements with a claim for payment. It is not simply a monthly total typed into an invoice. The billing engineer needs to show which items were executed, the accepted quantity basis and the contract rate. The reviewer needs enough evidence to certify the claim or explain a difference.

Keep four states separate: submitted, checked, certified and paid. A contractor may submit a quantity that the client has not yet accepted. Certification may approve only part of the submission. Payment may then arrive later. Treating all four as the same status hides both disputed work and collection delays.

Construction Guide

When RA Bills Are Used

01

Progressive billing is useful on contracts where work spans several periods. The contract may permit periodic measured bills, milestone payments or a combination. The frequency, submission evidence and certification process come from the agreement; monthly billing should not be assumed for every project.

02

A milestone is an agreed event, such as completion of a foundation package. A measurement-based bill values quantities of completed work. Before preparing a bill, confirm which basis applies to each item. Keep variations and extra items identifiable so they are not silently priced using an unrelated original rate.

Construction Guide

RA Bill Format

Start with project, contract, contractor, bill number, billing period and revision. For each item, include the item code, description, unit, agreed rate, quantity previously certified, cumulative quantity now claimed, cumulative quantity now certified and current certified quantity. Attach measurement and approval references.

The summary should reconcile current work value, approved adjustments, retention, advance recovery, other contractual deductions, tax and payable amount. Keep disputed quantities outside the certified total, with a reason and owner. A signature or electronic approval should identify what version was reviewed, not merely the filename sent by email.

Construction Guide

How to Calculate

For a measured item, current certified quantity equals cumulative certified quantity less previously certified quantity. Multiply the result by the applicable approved rate. Repeat by item, then total the current work value. Apply only adjustments supported by the contract and the approved billing process.

Do not subtract the previous payment again after already subtracting the previous certified quantity. That mixes a quantity reconciliation with a cash reconciliation. Track unpaid certified amounts in a receivables or payables statement. Check rounding at line and bill level, and use the same policy from one billing period to the next.

Construction Guide

Retention & Advance

01

Retention is an amount held under the contract’s agreed terms. Advance recovery reduces an earlier advance according to the agreed schedule or basis. Neither should be guessed from a previous project. Record the retention base, rate or fixed amount, cumulative retention and release conditions as separate fields.

02

The defect liability period, often shortened to DLP, concerns post-completion obligations defined by the contract. A DLP expiry date does not by itself prove that all release conditions are satisfied. Keep completion evidence, outstanding defects, release approvals and any guarantees connected to the relevant contract.

Construction Guide

GST on RA Bills

A progress certificate, tax invoice and receipt are different records. The finance reviewer should determine invoice timing, taxable value, classification, applicable rate and any deductions under the rules relevant to the transaction. Avoid hard-coding one tax rate for every construction contract.

Preserve the connection between the measurement statement and the tax invoice, but allow their review responsibilities to differ. If a bill is corrected, make the commercial adjustment and tax-document treatment traceable. Consult the current CBIC notifications and GST portal guidance before approving the tax configuration.

Construction Guide

How to Automate

Begin with controlled contract items and approved rates. Import opening certified quantities only after reconciliation with the previous bill. Let the system calculate period movements, but require a reviewer to approve measurement exceptions and changes to contract terms.

Test a partial certification, a rejected item, an extra item, a corrected previous bill and a final retention release. A useful demonstration should show both the bill and the history behind it. Ask the BUILDX team to demonstrate the measurement, certification and recovery flow using your own contract sample.

Field Guide

Records to Keep Connected

Use clear definitions so another reviewer can follow the decision.

01

Contract and bill period

Identifies the agreement and cut-off date used for the submission.

02

Previous certified quantity

Opening figure that must reconcile with the accepted preceding bill.

03

Current certified quantity

The difference between accepted cumulative quantities at consecutive cut-offs.

04

Recovery balance

Advance remaining after this bill, separately from retention and tax.

Worked Example

Illustrative RA Bill Calculation

Illustrative example; not a customer result or statutory calculation.

Assume a contract item is ₹1,000 per unit. Previously certified quantity is 100 units and cumulative certified quantity is now 160. This period is 60 × ₹1,000 = ₹60,000. If the contract specifies retention of 5% of this work value, retention is ₹3,000. With an agreed ₹6,000 advance recovery, the amount before tax and other applicable adjustments is ₹51,000. These are assumed contract terms, not statutory rates.

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Practical Checklist

RA Bill Submission Checklist

Use these checks to prepare a review with the responsible team.

01

Reconcile previous certified quantities item by item.

02

Attach measurements, approved rates and variation references.

03

Review retention and recovery against the contract.

04

Have finance approve tax treatment and invoice references.

05

Record certification, payment and disputed balances separately.

FAQ

Questions and Answers

Practical answers to common questions about this topic.

No. It is generally an interim account during execution. The final bill settles the remaining account under the contract after the required checks, adjustments and approvals.
No. The retention rate, basis, cap and release conditions depend on the contract. The example on this page uses an assumed rate only to explain the arithmetic.
It can be resubmitted when the reason is resolved and the contract permits it. Keep its earlier rejection and new supporting evidence visible, and prevent duplicate certification.
No. Certification approves an amount; payment settles it. Track both dates and reconcile the outstanding balance separately.
References

Sources and Further Reading

Sources checked on 1 October 2026. Apply current requirements to the relevant transaction or project.

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Discuss your project, current records and review responsibilities. Agree a focused demonstration and confirm the scope your team needs.

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