This presentation describes you about the life cycle of how to start a construction industry as a contractor. There is a case study of a sample civil furnishing work (BLOCK WORK) and explained everything starting from the tender work, to billing to payment process.

1. E- Faculty development program
Estimation and Billing process in Construction Industry
By
Suguru Anusha

2. CONTENTS
 Initial steps required for starting construction business as a contractor
 A Case Study on civil finishing work.
 Billing process
 Payment process

3. Over view of the construction company
Stage
1
Registration of
the company
Applying for GST
number
Estimation of
tender work
Stage 2 Quoting rate Work Order
Tender
Documents
Stage 3 Requirement of
Materials
Requirement of
Manpower
Requirement of
Equipments
Requirement of
Initial amount
Stage 4 Negotiation with
material supplier
Negotiation with
labour supplier
Negotiation with
equipment
supplier
Stage 5 Preparing project
planning
Hiring the skilled
employees

4.  The building consists of 63 floors
 No. of flats per floor = 32 flats.
 Scope of work: Block work for 32 flats.
 No. of floors to do work = 4floors.
Case Study

5. Case study
Block work
Casting Beam

6. Stage 1
 Estimation of tender work:
 Client will provide drawings and BOQ.
 Calculating quantity of work.
 Comparing rates i.e., client/ contractor.

7. Stage 2
 Work Order:
Agreement between the client and the contractor stating that they have
permission to start the work in the assigned area.
 Scope of work
 Contract value
 Retention money
 Variation in quantity
 Quality Assurance/ Quality control/ Tests Performed
 Payment terms
 Safety codes
 Termination of contract
 Labour hutment

8. Stage 3
 Requirement of material tender work:
 Listing out types of materials required i.e., AAC Blocks, Adhesive Chemical,
Shuttering, Steel, Cement, Coarse aggregate, Water.
 Calculating the quantity required for each material.
 Requirement of Man power:
 Calculating how many labour and mason (skilled labour) required to do work.
 Requirement of equipments:
 Listing out the equipments required i.e., Excavator, Concrete mixer, Adhesive mixer
etc.

9. Stage 4 - Negotiation with the material suppliers
 Check the quality before giving order
 Follow the terms and conditions given by the client
 Always maintain 20% margin in the purchase order.
 No payments in advance
 F.O.R = Freight on Road
(The term FREIGHT is used for the goods that are transported
in bulk from one place to another place)

10. Stage 4 - Negotiation with the labour contractors
 Always keep 30% to 40% margin
 Number of labours that contractor can provide?
 Rates of the contractor i. e., Labour, mason, per sft and lift charge.
 The base rate for block work per sft – Rs. 18/-
 The base rate for lift charge for ground floor is 18/- and adding 3% for every floor.
 Discuss mode of payments : It is of two types – Weekly payment and Monthly
payment
 Weekly payment – Rs. 1000/ labour/ week
 Monthly payment – Submitted bill

11. Platforms

12. Stage 4 - Negotiation with the equipment supplier
 Chemical mixer – MRP 2000 - 5000

13. Stage 4 – Initial amount required
 Materials:
 Material suppliers will supply materials by accepting 45days PD Cheque.
 In very rare cases, keep 25% of amount aside from estimated material expenses.
 Labour:
 Weekly wages Rs.1000/labour/ week.
 Equipments:
 Buying adhesive chemical mixer

14. Project planning
 Calculate quantity of materials required before starting the project.
 List out the steps & procedure of your assigned work. i.e., blocks below/ after beam,
beam casting.
 Prepare work break down structure before starting the project
 Equipment requirements
 Man power requirements
 Material requirements
 No delay in providing equipments or requirements from our side.
 Maintain material in-site in advance i.e., 10days
 Prepare a timetable to the labour contractors.

15. Tracking the work done
 Keep weekly update records through email and maintaining file.
 Always be ready for one stop solution.
 Visit to the site at every three days.

16. Organization structure

Contractor
Billing Engineer Site Manager Site Engineer

17. Responsibilities
 Contractor
 Ability to tackle different mindsets.
 Able to prepare project planning.
 Should have knowledge to check client/ sub - contractor Bills, BOQ, Tender documents.
 Always maintain enough bank balance.
 Should not postpone sub – contractors bills.

18. Responsibilities
 Billing Engineer
 Estimating amount of work to be done and calculating quantities of material required.
 Quoting rates according to the tender work to the client.
 Register vendor listing in the client office.
 Preparing & Submitting RA (Running Account) bills to the client.
 Checking and Verifying sub- contractors submitted bills.
 Maintaining taxation files.
 Maintaining up – to - date financial records

19. Responsibilities
 Site Manager
 Ability to take on spot decisions/ solutions. i.e., site accidents.
 Maintaining good relationships with client officer’s.
 Should be punctual.
 Preparing daily/ weekly plans or target.
 Maintaining site financial records/ material records.
 Maintaining terms and conditions of client in quality of work.
 To get certified and verified of work submitted in monthly bill by Engineer – in – charge.

20. Responsibilities
 Site Engineer
 Shifting material from office store to place of work
 Taking adequate steps for safety of labours
 Ensuring quality of work
 Ensuring work has been done in systematic manner and by step by step process.
 Fulfilling needs and requirements of labours.

21. Billing process
 Sub - Contractor to Contractor:
Preparing
Measurement book
Preparing cost
abstract

22. Billing process
 Contractor to Client:
Preparing
Measurement book
Preparing cost
abstract

23. Payment process
 Client to Contractor:
 Prepare RA (Running account) between 28th – 30th of every month
 Submit on 1st of every month along with the measurement sheets
 Client billing department will check the submitted bill
 Client certifies with “ Certificate of Payment.”
 After approval by the client, payment will be done according to the payment terms and
conditions

24. Payment process
 Contractor to Sub - Contractors:
 All the Sub - Contractors submit their RA (Running account) bills between 28th – 30th of
every month along with the measurement sheets
 Submitted bill should be checked & verified by Billing engineer.
 After being approved by the contractor, payment will be done according to the payment
terms and conditions

25. Tips
 Try to maintain same employees from project starting to ending.
 Pay taxes in time, else GST number will be blocked, no material supplier will supply
goods for you.
 Always maintain good relationship with clients.
 Always maintain quality.
 Conduct weekly meetings with the site employees (motivate them).

26. Thanks