---
title: "Procedure to prepare bills"
subject: "Construction Management"
chapter: 8
key: "semester_8/construction_management:bill-preparation-procedure"
source: https://www.bctengineer.com/q/semester_8/construction_management/bill-preparation-procedure
site: BCT Engineering
---

# Procedure to prepare bills

Construction Management · Chapter 8: Site Management

- Asked in: 2071 Bhadra, 4 marks; 2070 Magh, 3 marks; 2078 Chaitra (asked 3 times)
- Answer checked by Claude Opus 5.5 (high effort) on 2026-10-14
- Page: https://www.bctengineer.com/q/semester_8/construction_management/bill-preparation-procedure
- Whole chapter: https://www.bctengineer.com/md/semester_8/construction_management/chapter-8

## Question

Write down / explain the procedure of preparing bills.

## Short answer

Bills are prepared by jointly measuring work into the measurement book, making an abstract, applying contract rates, adding escalation and materials, then deducting advances, retention, tax and penalties. Net payable is certified by the engineer, approved by the accounts officer, and paid; the final bill includes completion and no-claim certificates.

## Answer

A **bill** is a statement prepared by the contractor (and checked by the engineer) that shows the quantity of work done, the rates and the amount payable. In government work in Nepal, *running (interim) bills* are paid during the work and a *final bill* at the end.

#### Procedure
1. **Measurement of work:** the engineer and contractor jointly measure the completed work and record it in the **measurement book**; hidden work is measured before it is covered.
2. **Abstract of measurement:** the quantities are entered item-wise (as in the BOQ), totalled and checked.
3. **Rate application:** each quantity is multiplied by the contract (agreement) rate; for extra or variation items, approved rates are used.
4. **Calculate the gross amount** of work done up to date.
5. **Add** price adjustment (escalation), the value of materials at site (if allowed) and variation items.
6. **Deductions:** the amount paid in previous bills, advance recovery (mobilisation and other advances), retention money (5% in public contracts), income tax (TDS), penalties and any other recoveries.
7. **Net payable amount** = gross amount − deductions; VAT is added (or withheld) as required by law.
8. **Checking and certification:** the bill is checked by the engineer or supervisor and certified by the project manager or concerned officer, with a certificate that the quantity and quality of the work are satisfactory.
9. **Approval and payment:** the bill is passed by the accounts officer, and payment is made by cheque or bank transfer.
10. **Final bill:** it includes all completed work and is submitted with the completion certificate and a "no claim" certificate; retention is released after the defect liability period, and the bill is marked **final**.

Records: the MB, abstract sheet, bill and checklist are filed together.

## Check yourself

The answer's key points as multiple-choice questions, with the correct option and why.

1. What is the first step in preparing a bill?
   A. Payment by cheque
   B. Joint measurement of the completed work, recorded in the measurement book
   C. Final bill
   D. Approval by accounts
   Answer: B. Measurements recorded in the MB form the basis of the bill. (Key point: First step)

2. Which are deducted from the gross amount?
   A. Previous payments, advance recovery, retention (5%), tax and penalties
   B. Only VAT added
   C. Only the contractor's profit
   D. Nothing
   Answer: A. Net payable = gross amount - deductions. (Key point: Deductions)

3. Which rates are used for extra or variation items?
   A. Approved rates
   B. Any rate the contractor states
   C. Market rate without approval
   D. Zero rate
   Answer: A. Contract rates are used for agreement items and approved rates for variations. (Key point: Rate application)

4. What is released with the final bill after the defect liability period?
   A. Retention money, with no claim and completion certificates
   B. Mobilisation advance
   C. Penalty
   D. Nothing
   Answer: A. The final bill includes all completed work and releases retention. (Key point: Final bill)

## Related in Construction Management

- [Techniques of writing specifications](https://www.bctengineer.com/question.md?key=semester_8%2Fconstruction_management%3Aspec-writing-techniques) — Construction Management, chapter 12, asked 5×
- [Site preparation components and facility arrangement](https://www.bctengineer.com/question.md?key=semester_8%2Fconstruction_management%3Asite-preparation-facilities-urban) — Construction Management, chapter 6

## Related in other subjects

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- [Preparing Gumbel probability paper](https://www.bctengineer.com/question.md?key=semester_5%2Fengineering_hydrology%3Agumbel-probability-paper) — Engineering Hydrology, chapter 6