A running account (RA) bill is an interim invoice raised periodically by a contractor under a works contract for the value of work executed and materials supplied up to a measurement date, computed from the measurement book at contract rates, less amounts paid on earlier RA bills, retention money, advance recoveries, TDS and other deductions. The client's engineer certifies the bill and the client pays within the contractual period. A certified RA bill is an acknowledged debt; a delayed one attracts interest under the contract or, for MSME contractors, the MSMED Act.
How RA bills work in India
The contractor and the client's engineer jointly measure the work and record it in the measurement book. The contractor prepares the RA bill from those measurements, with abstracts, GST, and deductions. The engineer checks and certifies, sometimes reducing quantities. Accounts process the certified amount for payment. Each RA bill is cumulative: "work done to date minus paid to date". Disputes arise over uncertified items, delayed certification and payment delays after certification. Final bills follow the last RA bill and include release of part of the retention.
| Component | Illustration |
|---|---|
| Gross value of work to date | ₹1,20,00,000 |
| Less previous RA bills paid | ₹90,00,000 |
| This bill gross | ₹30,00,000 |
| Less retention 5% | ₹1,50,000 |
| Less TDS 2% (illustrative) | ₹60,000 |
| Net payable (before GST adjustments) | ₹27,90,000 |
Why it matters for getting paid
A certified RA bill is one of the best documents a contractor can have: the client's own engineer has confirmed the work and its value. Non-payment of certified bills is pure delay, and interest is readily awarded. Uncertified bills need the measurement book to prove quantities. See measurement book, retention money and defect liability period.
How FundRaksha uses it
FundRaksha's advocates separate certified unpaid RA bills (claimed at once with interest from the due date) from uncertified work (claimed on measurement book evidence), and use the contract's arbitration clause or the Facilitation Council depending on the contractor's status. Fee: 30% of recovery; free consultation first. FundRaksha has handled ₹50 Cr+ of invoices across sectors including construction.
Worked example (hypothetical)
A Lucknow civil contractor (small enterprise) submits RA bill no. 7 for a net ₹27,90,000 on 1 March; the engineer certifies it on 10 March; the contract says payment within 30 days of certification, so by 9 April. Under the MSMED Act, acceptance is the certification date and 45 days would be 24 April; the contractual 30 days applies as it is shorter. The client pays on 9 September, five months late. Section 16 interest, assuming a 6.5% bank rate (19.5% a year, monthly rests), is ₹27,90,000 × (1.01625^5 − 1) ≈ ₹2,34,200. The contractor claims this interest after receiving the principal.
Last reviewed: 2026-10-08. Information for Indian businesses; not legal advice.