As a tradie, we know that one of your most valuable assets is your QBCC Licence and that not having it would be a disaster. There are a couple of ways that you may risk losing it and we want to address one of those in this BLOG.
We will discuss the most straightforward thing that you can do. This one simple action will help to ensure that you never face the threat of the loss of this precious commodity.
- Not completing your QBCC Annual Reporting, is a guaranteed risk of your licence. We have already recognised that to a builder or tradie your licence is everything! So, don’t do this!
The QBCC are now in their fourth year of the MFR or document regime. These means that their systems and resources are much more refined. They are getting better at recognising and chasing up licensees who don’t lodge.
It has been found that if you don’t submit your financials, you’ll receive a letter asking why not. The chances are now that not lodging will trigger regulatory action from the QBCC.”
- On the other hand submitting your QBCC Annual Financial Report alone isn’t enough! If you don’t follow the requirements as laid out, you will find yourself in trouble too. There is a really good chance that you’ll open yourself up for a QBCC audit, and that is never a good thing.
To avoid issues with QBCC Annual Financial Reporting, licensees need to consider the following tips:
QBCC Annual Reporting Lodgements Dates To Mark in Your Diary!
Make sure that you know exactly when the correct QBCC Annual Report Lodgement dates are. An excuse that “I got the date wrong” will not fly!
Category 1 – 7: 31st December 2022
SC1 and SC2: 31st March 2023
NOTE That There Have Been Changes to MFR Reporting
On the 1st of July 2022, there was an announcement of a change that has slipped under the radar for some and had an impact that is huge.
Licensees needing to submit an MFR Report must now supply General Purpose Financial Statements (GPFS). This is a method of reporting that is much more complex than Special Purpose Financial Statements. These have been the standard until this point. and this change is major.
It is true that an MFR report is not always required as part of QBCC Annual Financial Reporting. However, licensees need to submit an MFR Report if they have exceeded their Maximum Allowable Turnover (MAT) by more than 10%. That 10% threshold sets off a licence uplift and the change to reporting kicks in.
Our experience is that many builders have been fortunate enough to enjoy a rise in revenue over the last 12 months. At Tradies Advantage, we are confident that a number of licensees will not initially be aware that they have gone over their MAT until they lodge their QBCC Annual Financial Report.
- Our advice is that QBCC licensees discuss these changes with their accountant ASAP. This conversation should happen well before lodgement of their QBCC Annual Financial Report is due. This one conversation could help to avoid extra expense and delays. If you don’t already have one, now is the time to find an accountant who can work through the requirements with you.
- Don’t ignore any correspondence from the QBCC!
Okay, so we have established that your licence is your livelihood. Without it you know that all work must stop, and your business will be at risk of falling over altogether.
As a business owner we know that you will be juggling many moving parts in your business. We cannot say this strongly enough though… your QBCC licence MUST be a priority.
Do you know that in December 2021 the QBCC suspended 2,640 licences? They were happy to flex their muscles and to demonstrate that the regulator will continue to crack down on compliance, stay out of their crosshairs and avoid any risk!
It really doesn’t matter what our thoughts are about the way QBCC regulations work. If we work in this arena we must comply with their rules and regulations. In short, putting a letter from QBCC in a drawer and hoping it will go away will not do your or your tradie business any favours at all. Please, treat all QBCC correspondence extremely seriously.
- The sooner you deal with any Issues the better!
As soon as you receive a notice from the QBCC about any issue that has something to do with your financial reporting the clock starts to tick.
You will usually have 28 days to respond to them. At that point you must submit all the required financial information they are asking for. That includes a Minimum Financial Requirements report – an MFR Report if it is requested.
If you don’t do what you need to then the next step is simple and without hesitation. You will be subjected to QBCC’s penalties. These often come together with serious consequences for you and your business. These can include license suspensions. And those suspensions could result in cancellation of your licence.
- Get advice from a specialist QBCC accountant
The QBCC have very specific accounting rules. That means that we suggest avoiding using a run of the mill accountant. To ensure your fulfill compliance you will be advised to seek the help of an accountant who understands QBCC financial regulations. QBCC take this very seriously. They have taken the step of actually excluding accountants who haven’t complied with their regulations.
As with any profession, accountants usually specialise in a particular industry. There is a real chance that an accountant that does your annual tax returns or regular BAS and Bookkeeping will not have experience with QBCC Licensing.
Be aware that if you don’t use an accountant who understands QBCC licensing and the building and construction industry, you run the risk of getting into trouble. Of course, an additional risk is that because the process will be less smooth it may cost you more in the long run.
- Run a test prior to lodgement
The most important recommendation of all is this:
Make sure your accountant tests your financial position will pass QBCC Minimum Financial Requirements. They should do this BEFORE lodging your returns. Failure to do this or lodging a return that you have an idea will not pass MFR is a mistake. You will put your licence at risk and make the whole process even more painful than it needs to be.
A final word about keeping ahead of the game…
Keep your finger on the pulse of your business
There are three main areas that you need to focus on to get your preparation up to scratch for your QBCC reporting purposes.
- Review your accounting system. Make sure that you have your expense chart of accounts set up correctly. 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 access all the data that you need.
- Make sure you enter your financial data every week and reconcile the ledger at least once a fortnight or monthly against your bank account.
- Do a full review of your financial position on a quarterly basis. Look at the two critical areas of assets and liabilities.
Need help?
Call our dedicated team at Tradies Advantage on (07) 3333 2415. Alternatively, you can email Robert and the team at info@tradiesadvantage.com.au