The secret to making Financial Reporting to the QBCC a breeze

from Aussie Painting Contractor February 2020

THE NEXT STEP

Have you been burning the midnight oil in your office to finalise bookkeeping tasks or work on your business financial administration recently just so you could meet the QBCC reporting requirements?

It’s certainly one way to get yourself out of trouble but it doesn’t have to be like this. In this article I’ll give you some tips on how to take back time you might have wanted to spend in a different way.

Deadline to submit your financial information for the 2019 financial year to the QBCC has just passed. All QBCC licence holders were required to submit their financial information by 31 December 2019. Incredibly, approx. 40,000 builders and contractors have not complied.

However, some licensees who have not submitted their reports to the QBCC by this date can now breathe a sigh of relief. The QBCC has agreed to extend a further 12 months to SC1 and SC2 and Category 1 to 3 builders and subbies to strengthen their financial health in line with new laws and the Minimum Financial Requirements (MFRs). If you’re in any of these categories, be aware that the QBCC nonetheless expects you to submit your financial information as soon as possible.

Unfortunately, for Category 4 to 7 licensees the situation is different. If you haven’t submitted your financial information you can expect a follow up call from the QBCC in the next few weeks. Unless you act then, your license may be at risk of being suspended or cancelled.

Challenges of QBCC Financial Reporting

Many builders and tradies have asked me what to do to make QBCC reporting easier for them and not have it turn into a nightmare. My stock-standard answer usually is: systemise and streamline your business’ financial administration. When you have to provide your financial information to the QBCC at set intervals, or even on an ad hoc request, you need to have financial systems in place that allow you to tap into real-time data and produce reports easily.

For example, you need to provide the QBCC with a figure for both your Maximum Revenue and your Net Tangible Assets. They are set at the following levels:

• For self-certifying category 1 (SC1) licensees, the minimum NTA is set at $12,000 for a fixed maximum revenue of $200,000.

• For self-certifying category 2 (SC2) licensees, the minimum NTA is set at $46,000 for a fixed maximum revenue of $800,000.

If you have your figures handy you can go straight to the QBCC website and use the online Calculator to work out your Maximum Revenue and Net Tangible Asset.

There are three key things you need to do to get your preparation up to scratch for QBCC reporting purposes.

1. Review your accounting system and ensure that you have expense chart of accounts set up the right way. It is important that you have assets posted with the right account code in your system. There are also various report types that you can set up in accounting systems that will allow you to easily access the data.

2. Make sure you enter your financial data every week and reconcile the ledger at least once a fortnight or monthly against your bank account.

3. Review your financial position on a quarterly basis. In particular, look at the two critical areas of assets and liabilities.

Once you’ve set up your system properly and utilise the processes, it’s easy to produce the reports and meet your QBCC reporting requirements at the click of a button. It is important though that you are consistent in your practices. Don’t let your data entry lag behind, as that’s what can trip you up to produce accurate reports.

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Most builders/tradies love making good money, but when it comes to managing the money for the business, there’s usually less passion for it. While it’s often regarded as a necessary evil and red tape, it is what it is and businesses will always need to have rigorous financial administration and budgeting processes to be successful and get the edge over their competitors.

Having your accounting system set up properly to equip you with better reporting capability is definitely true to the adage ‘Prevention is better than the cure’. I’ve recently been involved in helping a business owner fix a non-compliance issue they had with the QBCC MFRs.

Interested to find out more about how to make meeting your QBCC reporting requirements a breeze? Call my office on (07) 3399 8844, or you can just visit our website at www.straighttalkat.com.au