Construction Payment Terms and Running Bills Explained

By Vystra · 8 September 2026

Cash flow, not profit, is what sinks most contracting businesses. Clear payment terms and disciplined running bills keep the money moving.

Stage payments

Tie payments to visible milestones — advance, foundation, slab, brickwork, plaster, finishing. Each milestone triggers a payment, so you're never funding the whole build yourself.

Running account (RA) bills

For longer projects, raise periodic bills for measured work done to date. This keeps cash coming in through the build rather than in one lump at the end.

Retention

Clients often hold ~5% retention, released after completion or the defect-liability period. Budget for it — it's your money, just delayed.

Keep billing clean

• Measure work honestly and document it.
• Show GST clearly.
• Number and date every bill.

Bill professionally, get paid faster

Messy or delayed bills slow payment. Vystra's quotation and invoice builder produces clear, GST-ready bills with PDF export — so your running bills look professional and get approved faster, keeping cash flow healthy.

Frequently asked questions

What is a running bill in construction?

A running account (RA) bill is a periodic bill raised for work completed so far during a project, allowing the contractor to be paid in stages rather than only at the end.

What are typical construction payment terms?

Payments are often tied to stages — advance, foundation, slab, brickwork, finishing — or raised as periodic running bills based on measured work done.

What is retention in construction?

Retention is a small percentage (often 5%) held back from each payment and released after completion or the defect-liability period, as security for quality.