The last part of the reforms the QBCC brought in with the Minimum Financial Requirements (MFR) will take effect on 1 January 2020. This will affect all self-certification categories (SC) 1-2 and category 1-3 licensees by requiring them to undertake Annual Financial Reporting.
In our recent blog article How to Make Sure You Don’t Lose Your QBCC Licence – Part 1 we’ve given you an overview how lack of financial reporting capability can have an impact on your licence.
What this means for Builders & Tradies
All QBCC license holders are required to submit an annual financial report under the MFR in future. You’ll need to have your financial data current and up-to-date to submit your Annual Financial Report to the QBCC. While this Report is required by 31 December 2019 for the 2019 financial year, it is important to get in early and be prepared. In fact, due to the congestion of processing certifications around this time of the year, it is recommended that you are ready to report by the end of October.
This is what’s expected of you:
- Self-certification category 1-2 licensees (maximum revenue to $800,000) will need to declare revenue, expenses and include a declaration of tangible assets.
- Category 1-3 licensees (maximum revenue from $800,001 – $30 million) will need to submit revenue, expenses and a copy of management accounts, including profit and loss statement, balance sheet, debtors and creditors report and statement of cashflow.
- If you are a Category 1 – 3 Licensee, you may have to engage an accepted independent accountant to assist you in calculating your current ratio as part of your Annual Financial Report.
If you miss the reporting deadline, you risk licence suspension and having to pay a fine.
Why robust financial business systems are the answer
Financial reporting to QBCC is fast becoming a specialist service niche. However, the basic ingredients for successful financial compliance reporting is having your business financial systems set up so that you can access the information you require at the time you need it.
Clearly, the goal of the QBCC is to provide better oversight of the construction industry players. While different level license holders have different financial reporting requirements, we have found that many licensees are either not aware of, or overlook the licensing regulations that require them to produce and review quarterly management reports.
No matter what category of QBCC licence you have, I know one thing with 100% certainty: When you have your business financials in order by running good systems, when you have a financial plan and stay on top of your bookkeeping, no amount of QBCC licence conditions will cause you any sleepless nights. You will always be able to plug your business numbers into their reporting regime without a problem.
If you are in any way concerned whether your business financial systems can handle any QBCC reporting requirements, contact us for a FREE QBCC Compliance Check.
Please Note: Many of the comments in this article are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstances.