Running bill in construction: format, columns and a worked example

A running bill, also called a running account bill or interim bill, is the bill a contractor raises while the work is still going on, usually every month. It claims payment for the work done so far, item by item from the BOQ, less what was already paid on earlier bills. The last bill on a contract is the final bill, which settles everything.

The idea is simple, but running bills are where most of a contractor’s payment delays begin: a quantity that does not match the measurement book, a variation billed before it was approved, a previous bill carried forward wrongly. This guide sets out the standard layout and the checks that keep a bill from coming back.

The columns of a running bill

A worked example

Below the item table the bill summarises: total value to date, plus approved variations to date, less retention to date, less advance recovered to date, less the total paid or certified on bills 1 and 2. The difference is what this bill claims. Taxes withheld by the payer come off the cheque, not the bill.

Where the quantities come from

Every quantity on a running bill should trace to a measurement: an entry in the measurement book (MB) or a measurement sheet signed by the contractor’s and engineer’s staff, with the location, dimensions and date. On government work the MB is the legal record, and a bill quantity with no MB entry behind it will be struck out.

• Measure in the BOQ’s own units and method; do not convert at billing time.
• Record where the work is (grid, floor, chainage) so it is not measured twice.
• Keep the measurement sheets with the bill; the engineer will ask.

Variations and extra items

Work outside the BOQ goes on the bill as a separate section of variations or extra items, each with the instruction that ordered it and the rate agreed. Billing a variation before it is instructed and rated is the most common reason a running bill is sent back. Until a rate is agreed, some contracts allow a provisional rate; say so on the bill.

Mistakes that get running bills returned

1. The “up to previous” column does not equal the last bill’s “up to date” column.
2. Quantities exceed the BOQ quantity with no variation behind the excess.
3. Rates differ from the contract rates by a rounding or a typing slip.
4. Retention held past its limit, or advance recovery at the wrong percentage.
5. Totals that do not add up because a row was inserted in the spreadsheet and missed by a formula.

Final bill

The final bill closes the account: final measured quantities for every item, all variations settled, retention due for release, the advance fully recovered, and all payments made. Running bills that were kept clean make the final bill a summary; running bills that drifted make it a negotiation.

Running bills without the spreadsheet

In Smart Construction each bill is built from the BOQ items and the progress recorded against them. The previous quantities and amounts come from the last bill automatically, retention and advance recovery follow the contract’s rules, and the bill prints on your letterhead. The same applies to subcontractors’ bills, so what you are paid and what you pay stay comparable. See BOQ software and billing software.