Billing Process

Section 1: Receipt of BOQ and Drawings

1.1 Receipt of BOQ

● The BOQ (Bill of Quantities) is shared by the Business Development (BD), Finance, or Design
team.

● The format is typically an Excel sheet.

● It is shared with the Billing team via email for reference and initial documentation.

1.2 Receipt of Drawings

● The Design team submits AutoCAD drawings through a shared drive/email.

● These drawings are the base documents for quantity surveying and further billing processes.

● The Design team is accountable for the upkeep and version control of all project-related drawings
without exception. Any superseded drawings must be clearly marked, and revised versions should
be issued promptly to avoid discrepancies.
● To enhance coordination and traceability, a project management tool should be adopted to log
revisions, track updates, and highlight major design changes effectively.

Section 2: Variation Preparation Process

Managed by the Planning Department

2.1 Quantity Surveying

● Detailed measurements are extracted from CAD drawings.

● A Measurement Book (MB) is prepared with complete item-wise quantity take-off.

2.2 Time Estimation for Quantity Take-off

 ● Once drawings are reviewed and deemed final:

○ The Civil & Interior (C&I) team takes 3 working days.

○ The Mechanical, Electrical, and Plumbing (MEP) team takes 3 working days.

● Both teams work simultaneously to complete the task within the same timeframe.

2.3 Variation Extraction

● Any difference between BOQ quantities and actual measured quantities is recorded as variation.

● Variations are tagged as additions or deletions.

● These are documented and supported by MB and drawing snapshots for client discussion.

2.4 Updating the BOQ

● Actual site quantities are inserted against each BOQ item.

● The revised BOQ reflects the impact of variations, used for re-billing and scope adjustments.

Section 3: Bill of Material (BOM) Preparation

● Identify the raw materials for every line item.
● Set the multiplier/ coefficients for every raw material based on design, wastage etc.
● Extract the order quantities & share with procurement.

Section 4: Ordering Process

4.1 Indent Generation by Site Team

● The site execution team raises a material indent using a pre-defined template.
 ● The indent includes:

○ BOQ reference item

○ Required quantity

○ Justification or site remarks

4.2 Quantity Verification by QS Team

● QS (Quantity Surveying) team verifies the indent for accuracy.

● Suggestions or corrections (if any) are added to maintain consistency with MB.

● Approved indent is submitted to Procurement.

4.3 Procurement Process

● The procurement team places orders based on approved quantities.

● Purchase Order (PO) is generated and shared with vendors.

● PO is cross-verified against the indent to avoid mismatch.

4.4 Material Receipt at Site

● Site acknowledges receipt of material with GRN (Goods Receipt Note).

● Material is checked for quantity and quality upon delivery.

Section 5: Billing Process – Project Type Based

5.1 Lump Sum Projects

5.1.1 Characteristics

● The total billing value is pre-defined in the Work Order or Agreement.

● Payments are linked to pre-approved milestones.

5.1.2 Invoicing Steps

● Project Manager (PM) monitors milestone completion.

● PM raises Performa Invoice (PI) upon achieving a milestone.

● Client approves the PI, post which:

○ PM coordinates with Accounts Receivable (AR) team to generate Tax Invoice.

○ Tax Invoice is submitted to the client via email, portal or hard copy.

5.1.3 Additional Work or Variation

● Any deviation from the freezed layout & 3D at the time of commercial closure, will be
considered as additional work.
● Any excess work or quantity is evaluated and documented as a variation.
● The billing team adds cost implications to the original value.
● Rate analysis of such items shall be prepared along with at least three vendor quotations for
client approval.
● Procurement & execution of such items will only be incorporated once approved from the client.

5.2 Item Rate Contract Projects

5.2.1 Characteristics

● Billing is done as per actual executed quantity at site.

● Payments are made based on certified measurements.

5.2.2 Measurement & Billing Cycle

● Billing personnel visit the site on a scheduled frequency (weekly/bi-weekly).

● Measurements are recorded in the Measurement Book and signed off by PMC/Client.

● Bill is prepared based on measured quantities and applicable item rates.

5.2.3 Invoicing Steps

● The prepared bill is reviewed and approved by the internal senior authority.

● Once approved, Tax Invoice is raised and submitted to the client.

 ● The billing person follows up with the client for timely payment.

Section 6: Additional Addendum / Non Tendered Items / Extra Work Items

● Additional Addendum

A formal document issued post-tender to modify, clarify, or add to the original scope, specifications, or
contract terms.

● Non-Tendered Items

Items or works not originally included in the BOQ or tender documents but required during execution.

● Extra Work Items

Tasks or materials that arise during execution due to site conditions or client instructions, beyond the
agreed scope and requiring separate approval and costing.

6.1 Identification & Documentation

● Non-BOQ/Extra items (NT Items) are identified by PM or Billing personnel.

● Shared with Billing team with:

○ Description

○ Measured quantity

○ Rate analysis along with technical specs

6.2 Rate Analysis Process

● Billing team coordinates with Procurement team to obtain vendor quotations.

● Billing team prepares Rate Analysis Sheet.

● Rate is submitted to Client/PMC for approval.

● Check profit margin as per tender/ contract (i.e 15% or 20% etc)
6.3 Procurement Initiation

● Upon client approval of rate, PM/site team raises an indent.

● The procurement process follows as per standard procedure.

Section 7: Billing Reconciliation

7.1 Purpose & Scope

● Reconciliation ensures alignment between:

○ BOQ quantities v/s Measured quantities v/s Procured quantities

7.2 Process

● Conducted by the Billing/Planning team in parallel with project execution.

● Every line item is compared and verified.

● Variations in procurement vs. measured quantity are flagged if deviation is found.

7.3 Outcomes

● Identifies wastage, pilferage, and excess consumption.

● Financial implications such as loss/profit are reported.

● Final reconciliation submitted during project closure.

Section 8: Vendor Billing Process (Common to All Projects)

8.1 Bill Submission

● Vendors submit invoices through email or physical copy.

 ● Format must include:

○ PO reference

○ Item description as per PO

○ Quantity supplied/ installed or executed against each line item of PO

○ Tax breakup

8.2 Vendor bills categories:

1. Running Account (RA) Bill

● Raised during the project’s execution phase.

● Reflects ongoing work progress.

● The Project Manager or Billing Manager is responsible for verifying progress and validating
the RA Bill.

● Once verified, the vendor collects the signed copy from the Billing Manager.

● The signed RA bill is then submitted by the vendor to the Head Office for further processing.

2. Final Bill

● Raised post project virtual handover.

● Represents the final billing for the entire scope of work completed.

● Verified and approved by the Billing Manager.

● Vendor collects the signed final bill from the Billing Manager.

● The final bill is submitted to the Head Office by the vendor for final closure.

7.3 Verification

● Billing team checks bill against:

○ Purchase Order

○ Delivery notes/GRN
 ○ Site confirmation

7.4 Approval and Processing

● Bills are approved internally.

● GM – Quality and Planning are kept in the loop for material verification and certification.

● Verified bills are sent to the Accounts Department for payment release subjected to clearance
from the client on quality parameters.

Section 8: Contract and Payment Governance

8.1 Contract and Payment Terms

● Clear contracts define scope, milestones, and payment terms (progress/final).

8.2 Progress Billing

● Payments tied to deliverables or completed work %.

8.3 Change Orders and Variations

● Scope changes documented via Change Orders.

● Impact on cost/timeline recorded.

8.4 Invoices

● Detailed, covering labor, materials, additional charges.

8.5 Payment Certification

● 3rd party/Consultant/PMC may certify progress for payments.

8.6 Final Account

● Prepared post-completion.
● Adjusts outstanding dues and variations.

8.7 Cost Control & Monitoring

● Ongoing tracking to control budget.

8.8 Dispute Resolution

● Standard mechanism in place for resolving billing disputes.

8.9 Invoice Management

 ● Efficient tracking, approval, and processing.

Section 9: Common Billing Methodologies

● Lump Sum Billing: Fixed contract value, paid by milestone.
● Time and Material: Billed based on actual labor hours and material cost.
● Cost Plus Percentage: Reimbursement of cost + agreed profit %.
● Guaranteed Maximum Price: Contractor guarantees not to exceed agreed price.
● Unit Price: Payment per defined units (e.g., sq.ft.).
● Retainer Billing: Initial retainer + periodic billing for ongoing work.

Roles & Responsibilities Overview

Role Key Responsibilities

Project Manager Raise invoice upon milestone completion; Share anti-items; Follow up for
(PM) payments.

Billing Team Prepare bills, rate analysis, reconciliation, invoice generation, client
submission.

QS Team Verify quantity from drawings/indents, validate MB, update BOQ.

Procurement Team Procure approved material, provide quotations, raise PO.

Design Team Share CAD drawings, resolve drawing-related queries.

Accounts Team Generate Tax Invoice, process vendor/client payments.