RA Bill and Retention in Construction: How Running Account Billing Works

On a construction contract that runs for months, a contractor cannot wait until the end to be paid. The usual answer is the RA bill, short for Running Account bill: a bill raised at intervals for the work completed since the start of the contract.

What Is an RA Bill?

An RA bill claims payment for the cumulative work done to date, measured against the items in the contract BOQ. Each new bill is numbered (RA-1, RA-2, and so on), and each one shows what was billed before so that nothing is paid twice.

What Goes Into an RA Bill

• BOQ item and rate: every line is taken from the contract BOQ, at the contract rate.
• Cumulative quantity: total measured work up to this bill.
• Previous quantity: what earlier RA bills already claimed.
• Current quantity: cumulative minus previous. This is what this bill pays for.
• Deductions: retention and any advances being recovered, as the contract specifies.

What Is Retention?

Retention is a percentage of each bill that the client holds back until the contract conditions are met, typically completion or the end of a defects liability period. It protects the client against defective or unfinished work. The percentage and release terms come from your contract, so always follow the contract rather than a rule of thumb.

For the contractor, retention is money earned but not yet received, so it needs its own tracking: how much has been held on each bill, and when each part falls due for release.

Advance Recovery

If the client paid a mobilisation or material advance, the contract usually says how it is recovered, often as a deduction from each RA bill. Show the opening balance, the amount recovered in this bill, and the closing balance on every bill.

Where RA Billing Goes Wrong

1. Measurements and BOQ drift apart. Quantities are measured on site but billed from a separate sheet, and the two stop matching.
2. Previous quantities are retyped. One typo means double billing or short billing.
3. Retention is lost in the notes. Nobody knows the total held until the end of the project.
4. Over-billing against BOQ quantity. The cumulative quantity quietly exceeds the contract quantity.

Billing Straight from BOQ Progress

When progress is recorded against BOQ items in the same system that holds the BOQ, the previous and cumulative quantities come from the record, not from memory. VISWOX ERP includes retention management, so the amount held on each bill and the running total stay visible. See how this links to project budget management.

Summary

• An RA bill claims payment for cumulative work done, measured against the BOQ.
• Each bill shows previous, cumulative and current quantities.
• Retention and advance recovery follow your contract terms and need their own running totals.