How to Track Payments to Labour Contractors (Thekedar) Site by Site

If you are a builder running three or four sites at the same time, contractor payments are one of the biggest sources of confusion. One thekedar took an advance in Diwali week. Another got a part payment when the slab was cast. A third says you paid less than what was agreed. By the time the project ends, nobody remembers the full picture, and the settlement becomes a long argument.

This article explains a simple system to track payments to labour contractors, site by site. You can run it on paper, in Excel, or in an app. The system is the same in all three cases.

Why thekedar payments get messy

Contractor payments are not like buying cement. A material purchase is one challan and one payment. A contractor payment stretches over months and has many small parts. The mess usually comes from four things:

• Advances. You give the thekedar Rs 50,000 in advance for mobilisation or for a festival. It is noted in a diary, or in a WhatsApp message, and sometimes nowhere at all. Six months later, both sides remember a different number.
• Partial payments. You do not pay the full running bill. You pay some amount in cash, some by bank transfer, some as a cheque that got replaced. Each part payment must reduce the balance, or your records go wrong.
• Work is measured later. For item-rate contracts, the payment depends on measurement. The payment may be given before the final measurement is done, based on an estimate. When the measurement book is updated later, the earlier payments must be adjusted.
• Multiple sites. The same thekedar may work on two of your sites. If you do not tag every payment to a site, you cannot tell which project owes him money.

Every one of these problems is a record-keeping problem. Fix the records and the arguments reduce a lot.

The four records to keep

For each contractor, on each site, you need only four records. Keep these and settlement becomes arithmetic, not negotiation.

1. Work order or rate agreement

Before the thekedar starts, write down what he will do and at what rate. Item rate (Rs per sq ft of plaster, Rs per cum of concrete) or lump sum or labour-only contract. Include the scope, the rate, and any terms such as who arranges scaffolding or curing. Even a one-page signed note is far better than a verbal agreement. Take a photo of it and keep it with the project file.

2. Measurement or attendance

For item-rate work, keep a measurement book entry for each job, dated and signed. For labour-only or daily-basis work, keep the hajiri. The attendance record and the measurement record are the base on which the thekedar’s bill is calculated. If both sides keep the same records, disputes are rare.

3. Payment register with advances

This is the record most builders are missing. Every payment, whether advance, running payment or final payment, should sit in one register with the date, amount, mode (cash, UPI, bank transfer, cheque), and the site it belongs to. Advances must be shown separately from payments against work done, because an advance is recovered later.

4. Settlement statement

When the contract ends, prepare one statement: total work value as per measurement or attendance, plus any approved extras, minus advances, minus payments already made, minus retention if you hold any. The balance is the final payment. Both sides sign it. This one sheet closes the contract cleanly and protects you if a dispute comes later.

A worked example with sample numbers

The numbers below are sample numbers only, to show the method. Assume a thekedar, Ramesh bhai, does plaster on your Bhandup project at an item rate of Rs 18 per sq ft (sample rate).

Payments made during the work (sample):

Settlement: total work value Rs 63,000 minus total paid Rs 47,000 leaves a balance of Rs 16,000 payable on final settlement, after checking the measurement book entries. If you had mixed the advance and running payments into one vague “paid something” note, this simple sum would be impossible. If you want to check labour cost before giving a rate, you can also use a labour cost calculator.

Register format columns

Whether you keep this in a notebook or Excel, use these columns for the payment register:

• Date
• Contractor name
• Site or project name
• Work order reference
• Payment type: advance, running, or final
• Amount
• Mode: cash, UPI, bank transfer, cheque
• Voucher or reference number
• Running balance (total value minus total paid)
• Remarks

If you prefer Excel to start with, we have ready formats you can copy: a site expense register format, a labour attendance sheet format in Excel, and a material stock register format. There is also a full set of construction Excel templates for site records.

How Trackovo records contractor payments and settlement

Trackovo is an app for Android, iPhone and web built for Indian construction and interior sites. For contractor payments, the relevant parts are these.

Labour attendance is recorded with photo and site location, so the hajiri for each thekedar’s gang is on record for every day. Labour wages and contractor settlement are handled in the app, so you can see, per contractor and per site, what work was done and what has been paid. Site-wise payments and expenses are tracked, so every payment is tagged to the right project. The measurement book module holds your measurements, which supports item-rate settlements. The tasks and daily progress module gives you a day-by-day record of what the contractor actually did.

Because everything is site-tagged, you can open one project and see the full payment position for every thekedar on it: work done, advances given, payments made, and balance. The team also helps import your existing data from Excel if you want to move your registers into the app, and exports your data on request, so you are not locked in.

Some honest limits. Trackovo does not work offline, so you need network on site or at the office to record entries. It does not have biometric hardware or face recognition; attendance uses photo and location instead. There is no live Tally integration; it has a Tally export instead. GST and TDS handling are supported. It also does not do design or 3D work, and it is not a CRM, so do not expect lead management in it.

To see the app before deciding, you can take a 14-day free trial with no card needed, or book a WhatsApp demo. If you are comparing options, read our comparison of construction management software in India or our review of the best labour attendance apps. You may also want to read our pages comparing Trackovo with Powerplay and with Onsite, both of which are construction management apps used by Indian contractors. For their prices and current features, check their own websites or ask for a written quote.

Mistakes to avoid

• Paying without a site tag. If a payment is not linked to a site, the cost of that site is wrong and settlement is guesswork.
• Not recording advances as advances. An advance shown as a normal payment inflates the work paid for. Always mark it, and recover it at settlement.
• Settling before measuring. Final payment before the measurement book is checked is the most common way builders overpay.
• Paying on WhatsApp memory. A verbal “yes, I paid him 20k that week” is not a record. Every payment needs a date, amount and mode in one place.
• One register for all sites. Use one register per site, or an app that tags every entry to a site automatically.
• No signed settlement. Always close the contract with a signed settlement statement, even with a thekedar you trust. It protects both of you.

Common questions

How do I recover an advance given to a thekedar?

Record the advance in the payment register against that site and contractor, marked as “advance”. When you make running payments, deduct the advance in parts or hold it fully until final settlement, as per your agreement. At settlement, subtract the advance from the total work value along with all other payments. The key is that the advance is written down on day one; recovery then becomes simple arithmetic.

Should I pay contractors per attendance or per measurement?

It depends on the contract type. For labour-only or daily-basis work, attendance (hajiri) is the base, so a clean attendance record is essential. For item-rate work, payment follows the measurement book. Many builders use both: attendance to check that the gang was present, and measurement to calculate the bill. Keep both records whichever way you pay.

Can I run this system in Excel instead of an app?

Yes. The four records described above work fine in Excel if you are disciplined about entering every payment the same day. Excel falls short mainly when multiple people record payments, or when you want to see live balances across sites. Many builders start with our Excel templates and move to an app like Trackovo when projects multiply. Trackovo also helps import your Excel data, so the switch is not painful.

How does Trackovo price its plans?

Trackovo has three plans on launch offer till 31 March 2027: Starter at Rs 1,799 per month or Rs 17,999 per year for 3 core users and 5 active projects, Growth at Rs 2,999 per month or Rs 29,999 per year for 6 core users and 12 projects, and Scale at Rs 5,399 per month or Rs 53,999 per year for 12 core users and 30 projects. Labour, contractors and staff log in free and unlimited on every plan; only office and site roles count as users. Every module is in every plan, 18% GST is extra, and there is a 14-day free trial with no card needed. Full details are on the plans page.