A mobilisation advance helps a contractor meet start-up costs: site office, labour camp, equipment, initial material and staff. It is paid near the start of the contract, before much work is billed. Without it, a contractor may have to fund weeks of set-up costs from its own pocket before the first bill is certified.
Whether it is offered at all, how much, whether interest is charged, what security is needed (often a bank guarantee), and how it is recovered are all set in the contract. Recovery is usually in instalments deducted from RA bills until the full amount is back.
Main contractors sometimes give a similar advance to subcontractors under a work order. Track the balance outstanding against each bill, because unrecovered advances are easy to forget when a subcontractor leaves the job. Show the recovered and balance amounts on every bill.
Example
Illustrative: ₹10 lakh advance to be recovered in 5 equal instalments of ₹2 lakh from RA bills 2 to 6.
Subcontractor management in CivilPilot
Work orders, progress, RA bills, retention and advances for every subcontractor, with a portal they can use.
