How a running account bill is measured, checked and paid
8 min read · Last reviewed 7 August 2026
A running account bill is not an invoice. You do not decide the amount — you record what was built, the department checks it, and the payment follows from the measurement.
Understanding that order is what separates a bill paid in three weeks from one that comes back twice.
The measurement book comes first
Every quantity you are paid for traces back to an entry in the measurement book: what was measured, where, on what date, and by whom. The bill is a summary of those entries, not a separate claim.
Measurements are recorded against the item numbers in the agreement schedule, with the dimensions that produced the quantity — length, breadth, depth, number — so anyone can check the arithmetic later. For steel it is weight, for concrete it is volume, for plaster it is area, and the sub-type decides the columns.
Running account arithmetic
Each RA bill measures the work done to date, then subtracts what previous bills already paid for. That running structure is why a mistake in an early bill follows you through every later one.
Agreement quantity 1,000 m3 at ₹450
RA-1 measured to date 300 m3
previously billed 0 m3
this bill 300 m3 x 450 = ₹1,35,000
RA-2 measured to date 720 m3
previously billed 300 m3
this bill 420 m3 x 450 = ₹1,89,000
RA-3 measured to date 1,000 m3
previously billed 720 m3
this bill 280 m3 x 450 = ₹1,26,000
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Cumulative 1,000 m3 = ₹4,50,000The figure that matters on every bill is "measured to date", not "this bill". Get the cumulative right and the current bill follows; get it wrong and the error compounds until someone reconciles it, usually at final bill stage when it is most painful.
What comes off the gross
The measured value is the start of the calculation, not the end. A typical railway RA bill deducts:
| Deduction | Typical rate | Charged on |
|---|---|---|
| Income-tax TDS (194C) | 1% or 2% | Value of work (before GST) |
| GST TDS | 2% (1% CGST + 1% SGST) | Value of work (before GST) |
| Labour cess (BOCW) | 1% | Gross value |
| Security deposit | 5% to 10% | Gross value |
| Recoveries | as applicable | Material issued, advances, penalties |
Two of those come back to you as tax credit and one is refundable after the maintenance period, so the amount deducted and the amount actually lost are very different numbers. Only the labour cess and any penalties are true cost.
Quantity beyond the agreement
Where the executed quantity of an item exceeds the agreement quantity, the rate is reduced in tiers under SOP 2018 — full rate up to 125%, 98% between 125% and 140%, 96% above that, with the thresholds far wider for minor-value items.
It catches people out at exactly the moment they are least able to react, so watch the percentage as the work proceeds rather than discovering it in the bill.
Why bills come back
- Measurements not recorded in the measurement book, or recorded without dimensions.
- Quantities that do not reconcile with the previous bill — the single most common reason.
- Items billed that are not in the agreement schedule, with no variation order behind them.
- Work measured after it was covered up, with no prior record.
- Rate applied differently from the agreement, usually where an SOP reduction was expected and not applied, or applied per item when the schedule group governs.
- Deductions omitted, which the office will simply add before paying — but the file goes round again first.
- Test results or quality certificates not enclosed where the specification requires them.
Common questions
- What is a running account bill?
- A progressive bill for work completed to date on an ongoing contract. Each RA bill measures cumulative work and subtracts what earlier bills already paid, so payment follows the measurement rather than a claim.
- What is the difference between "measured to date" and "this bill"?
- Measured to date is the cumulative quantity executed since the contract began; this bill is that figure minus what previous bills covered. The cumulative figure is the one that must be right — an error there propagates through every later bill.
- What deductions are made from an RA bill?
- Typically income-tax TDS at 1% or 2%, GST TDS at 2%, labour cess at 1%, security deposit at 5% to 10%, and any recoveries for material issued or advances paid. The two TDS deductions come back as tax credit and the deposit is refundable, so only the cess and any penalties are a genuine cost.
- Why was my RA bill returned?
- Most often because quantities do not reconcile with the previous bill, or measurements are missing from the measurement book. Other frequent causes are items billed without a variation order, work measured after being covered up, and missing test certificates.
Related guides
- SOP 2018 rate reduction: what happens when you execute more than the agreement quantity
How Indian Railways reduces your rate when executed quantity exceeds the agreement: the 125% and 140% thresholds, the 2% and 4% cuts, the minor-value exception, and a worked example.
- Price variation and escalation: how the clause works and how to claim it
How price escalation clauses work on railway and government contracts: which contracts carry them, how the index formula is applied, what to submit, and why most escalation goes unclaimed.