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Safeguard your QBCC Licence with Regular Bookkeeping

Keeping your books up-to-date has become even more important now for tradies and anyone working in the construction industry who is required by law to hold a QBCC licence to operate their business. Last year, the Queensland Building & Construction Commission (QBCC) has introduced new Minimum Financial Requirements (MFR) which came into play early this year.

Starting from 1 January 2019 QBCC licensees need to provide financial information to the QBCC each year (as was the case prior to 2014). In addition, depending on their licence category, businesses will also be required to provide more detailed financial information in the form of a 'balanced scorecard'.

What bookkeeping has to do with your QBCC Licence

Since the beginning of 2019, the QBCC has suspended many businesses for non-compliance with the MFR. It seems that the biggest stumbling block for business owners is the accurate reporting of maximum revenue and asset ratios.

While it’s easy to complete a form and send it to the QBCC, it takes a well run financial system to be able to confidently project maximum revenue and report on asset values, because that’s what you are certifying to the QBCC.

As a bookkeeper I can only imagine the heart ache and sleepless nights a cancelled or suspended license would be causing Queensland tradies and business owners. I can also tell you that the only way to avoid this is to keep your book work up-to-date and regularly reviewed (quarterly at the minimum). If you have not yet implemented cloud-based bookkeeping with a package like XERO for example, now is a good time.

With the real-time reporting features of a powerful online bookkeeping system you could literally save your QBCC licence. The changes to the QBCC financial reporting means that you need to be able to provide financial data on turnover and asset ratios at the drop of a hat. For example, an event outside the normal reporting period can require you to update your financial information with QBCC. The event could be expiration of your Professional Indemnity Insurance Policy or a variation by 30% or more in Net Tangible Assets.

Financial Reporting for Licensees

Depending on your licence category you will need to complete and lodge the appropriate Self Certifying form stating that you will NOT exceed your nominated maximum revenue and what your Net Tangible Assets are.

The QBCC is very particular that the forms be completed diligently and might even reject forms that have small hand-written alterations, other than the completion of the spaces provided on the form.

What are the Reporting Challenges?

If your business is experiencing a growth phase it’s especially important to keep an eye on your revenue. When you get a business growth spurt that tips you over the threshold of your current asset and liability ratios, you need to know about it, because you’ll need to report it to the QBCC.

The other critical part is that you need to know exactly what kind of assets to include or the asset and liability ratio could be wrong and may trigger a cancellation of your licence.

We are bookkeepers who understand the QBCC requirements, but also the challenges tradies and contractors are facing to meet them. Our regular reviews and quarterly QBCC compliance check can help tradies have peace of mind, and save a little before getting their accountant involved.

Contact Sandra Price on 0468 944 130 to arrange a FREE QBCC Compliance Check to find out if you are on track.

Article supplied by Tradie Bookkeeping Solutions - tradiebookkeepingsolutions.com.au.

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