How Your Business Plan Can Help You With QBCC Reporting

Taking stock of how your business performed in the previous year is part and parcel of running a successful business. Updating your business and financial plans for the year ahead is the next critical part of the process. When you build a house, you need building plans. When you build a business, you need a business plan.

Looking at your business’ financial performance over the last twelve months is a good starting point to raise the bar or tweak your profitability strategies, such as profit margins and tax savings. That includes reviewing and updating your budget and expenditure plan as well as your tax plan for the year.

If you don’t know how healthy your business currently is, you can download the Business Profits Health Check from our Tradies Advantage website to help you understand your position.

What to include in your Business Plan update

To review and update your business plan, you’ll want to cover the following items:

1. Business Profile – includes a specific description of the business you’re in, your mission statement, legal structure, SWOT analysis and business objectives.
2. Product/Service and Market Analysis – this should include description of your product/service including its position in the market, any major trends affecting the industry in the past and future, your target market(s) and expected growth rates over the next 2-3 years, and your ideal customer profile.
3. Competitive Analysis – this is where you determine your business’ competitive advantage, but also where it lacks competitive advantage.
4. Marketing Plan – here you’ll set out your objectives, develop a sales forecast, as well as determine pricing and promotional strategies.
5. Operational Plan – set out your objective, review plant and equipment requirements (including maintenance and replacements), how you implement quality control measures, and what staff and training requirements you’ll have.
6. Financial Plan – set out your overall objectives, identify the cost for establishment or expansion of your business, create a Profit Budget Schedule and Cash Flow Projection.

The last item of the business plan neatly dovetails with the regular QBCC reporting requirements which you’ll need to keep up-to-date to stay in business. However, it doesn’t exist in isolation and the context is clearly outlined in items 1 to 5 above.

Further, if you wanted to apply for a business loan, the above items are a must to get your head around to be able to produce supporting documents for your loan application.

Updating your Business Plan helps to ensure QBCC compliance

You need to have your business and financial plan information at hand to be able to satisfy the Minimum Financial Requirements (MFRs) of the QBCC. In particular, you’ll need to be able to calculate your Net Tangible Assets (NTA).

The QBCC limits the maximum revenue (MR) a licensee can earn for the forthcoming year based on the value of their NTA (their working capital).

There are important dates coming up that are critical for tradies and builders holding a QBCC licence. Self-certification categories (SC) 1 and 2 and Category 1 to 7 licensees must provide the Queensland Building and Construction Commission (QBCC) with financial information by the following dates.

You need to lodge your financial information by the required reporting day.

The dates for lodgement of annual reporting to the QBCC each year are:

For SC1 and SC2:

• lodge from—1 November
• due by—31 March

For Categories 1-7:

• lodge from—1 August
• due by—31 December.

You will receive written notice from the QBCC of your annual reporting day confirming the due date.

Depending on your business turnover, you’ll need to submit different levels of financial information to the QBCC. As a Category 1 to 3 licensee, you’ll definitely need your financial systems in good order to satisfy the Minimum Financial Requirements.

Here are a couple of points to remember when submitting your Self-certification documents:

1. The reporting requirements for financial category SC1 and SC2 licensees are different to Category 1 to 7 licensees.
2. SC 1 licensees are required to have Net Tangible Assets (NTA) to the value of $12,000, and for SC2 licensees it is $46,000.
3. The information doesn’t need to be prepared by an accountant; although if you already use an accountant, it will be easier to submit the latest information provided by them for your end of financial year tax reporting.
4. The quickest and easiest way to submit annual financial reporting is online via the myQBCC portal.
5. A deed of assurance is not available to sole traders to meet their NTA requirements.

For more detailed information visit the QBCC website.

Interested to find out more about how to update your Business Plan or set up your accounting system to help you meet your QBCC requirements? Then call my office on (07) 3399 8844, or just visit our website at www.straighttalkat.com.au and complete your details on our Home page to request an appointment.

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.

Copyright © 2019 Robert Bauman.

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.