RA Bills, Mobilisation Advance, and Retention Money are the three contract terms that decide whether a project runs smoothly or turns into a weekly payment argument. Most clients hear these words for the first time after work has already started, and most contractors assume the client already knows what they mean. That gap creates friction. This blog explains RA Bills, Mobilisation Advance, and Retention Money in plain language, with examples, so you can sign contracts with clarity and manage payments with confidence.
At Shelke Constructions Pvt. Ltd., we push for clean documentation and milestone clarity because contracts are not only legal paperwork. They are project control tools.
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1) What are RA Bills?
RA Bills means Running Account Bills. Think of it as a progress bill. Instead of paying the full project amount at the end, you pay in parts as work gets completed and measured.
In practical terms:
- Work gets executed on site
- Quantities are measured, like cubic meters of concrete or square meters of plaster
- The measured quantity is multiplied by the agreed rate
- The RA bill amount is certified and then paid, after deductions
Metaphor: RA Bills are like paying for a buffet by plate, not paying for the entire buffet in advance.
Why RA Bills exist
RA Bills protect both sides:
- The contractor does not get stuck waiting until the end
- The client does not pay for work that is not actually done
At Shelke Constructions, RA Bills are usually supported by measurements, photo records, and clear stage-wise confirmation so that payment conversations stay factual.
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2) How RA Bills are calculated
Even if you are not an engineer, you should know the logic behind RA Bills.
A typical RA bill includes:
- Gross value of work done (measured quantity x BOQ rate)
- Less previous payments (so you do not pay twice)
- Less deductions (retention, advances recovery, taxes)
- Net payable amount
Example
If your contract has an item:
- RCC slab concrete: 50 m³ at ₹X per m³
If the site measurement shows 10 m³ completed this period: - RA value for that item = 10 x ₹X
Repeat this across items, add them up, then apply deductions.
This is why clarity in BOQ, rates, and measurement method matters. It is the foundation of sane RA Bills.
3) What is Mobilisation Advance?
Mobilisation Advance is the initial payment paid to help the contractor mobilize resources. It is usually used for:
- bringing manpower to site
- arranging machinery and shuttering systems
- setting up site office and safety infrastructure
- initial material procurement
Metaphor: Mobilisation Advance is like paying a deposit so the work engine can start.
Important detail: it is not free money
Mobilisation Advance is usually recovered from future RA Bills in parts. That means:
- you pay advance upfront
- later, a portion is deducted from each RA bill until it is fully recovered
Example of recovery
Mobilisation Advance = ₹10 lakh
Recovery plan = 10 percent deduction from each RA bill
If RA bill payable is ₹5 lakh, then ₹50,000 is recovered towards the advance.
At Shelke Constructions, mobilisation discussions are always tied to a written recovery method and a clear list of what mobilisation includes, so there is no confusion later.
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4) What is Retention Money?
Retention Money is the portion of payment that the client holds back to ensure the contractor completes the project properly and fixes defects after handover.
Metaphor: Retention Money is the “performance buffer” that keeps accountability alive until the end.
Retention is usually:
- a percentage of each RA bill, often 5 to 10 percent
- capped at a maximum limit, depending on contract terms
- released in stages, like part at completion and part after defect liability period
Why retention exists
Because without retention:
- some contractors rush finishing
- snag rectification becomes difficult
- the client loses leverage after most money is paid
At Shelke Constructions Pvt Ltd, retention is treated as a fair mechanism, not punishment. It protects clients and also keeps the project closure process clean.
5) How these three work together on a real project
This is the simplest way to understand RA Bills, Mobilisation Advance, and Retention Money.
- RA bills pay the contractor based on progress
- Mobilisation advance helps the contractor start, and is then recovered
- Retention money ensures finishing quality and post-handover fixes
So in one RA bill cycle, you might see:
- Gross work value: ₹20 lakh
- Advance recovery: ₹2 lakh
- Retention deduction: ₹1 lakh
- Taxes: as applicable
- Net payable: adjusted figure
If you understand this system, you can predict your cash flow and avoid fights.
6) Common mistakes clients make with RA Bills
Mistake 1: Paying without measurement clarity
Always ask what basis the RA bill is measured on. Measurement sheets and site verification keep it clean.
Mistake 2: No agreement on what counts as “complete”
For example, is plaster “complete” after application, or after curing and finishing checks? Contracts should define milestone completion.
Mistake 3: Changes are executed without variation approval
Extra work must be documented, priced, and approved. Otherwise it shows up in RA bills as a surprise.
Mistake 4: Delay in certification leads to delay on site
When RA bills get stuck, site productivity drops. Material deliveries slow. Labour shifts away. The project suffers.
At Shelke Constructions, we recommend a fixed weekly or fortnightly billing cadence so certification and payment cycles are predictable.
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7) What you should demand in the contract clause
If you want RA Bills, Mobilisation Advance, and Retention Money to work properly, your contract should clearly mention:
For RA bills
- billing frequency (weekly, fortnightly, monthly)
- measurement method and who certifies
- timeline for certification and payment release
- format of measurement sheets and supporting documents
For mobilisation advance
- amount and percentage
- recovery method and schedule
- bank guarantee requirement if applicable
- what mobilisation includes
For retention
- percentage deducted per RA bill
- maximum retention cap
- retention release milestones
- defect liability period duration
These clauses are small, but they decide the mood of your entire project.
8) A simple client checklist before approving any RA bill
Use this checklist every time:
- Measurements are clearly shown and match site progress
- Previous RA payments are accounted for
- Advance recovery amount is correct
- Retention deduction is correct
- Variations are approved separately, not hidden inside
- Net payable is clear and taxes are consistent
- You have progress photos or update notes for the cycle
If you do this consistently, billing becomes routine, not drama.
FAQs
1) What is the difference between RA bills and milestone billing?
RA bills are based on measured quantities of work done, while milestone billing is tied to completion of defined stages (like plinth complete, slab complete). Many contracts use a hybrid of both, depending on project type.
2) Who certifies an RA bill in a typical construction contract?
RA bills are usually certified by the client’s representative, architect, PMC, or engineer as defined in the agreement. The certifier verifies measurements and confirms the work is executed as per scope.
3) Is mobilisation advance refundable or recoverable?
Mobilisation advance is typically recoverable, meaning it is adjusted through deductions in future RA bills until the full advance is recovered. Contract clauses define the recovery rate and whether any security like a bank guarantee is needed.
4) What is a typical retention money structure and when is it released?
Retention is commonly deducted as a percentage from each RA bill up to a cap, then released partly at completion and the balance after the defect liability period. Exact percentages and timelines vary by contract and should be written clearly.
5) What is the defect liability period and why does it matter for retention?
The defect liability period is the time after handover during which the contractor must fix defined defects at no extra cost, as per contract terms. Retention ensures there is financial leverage to complete defect rectification and close the project properly.