Are you ready to submit?
At the start of the year, QBCC announced their Minimum Financial Requirements (MFR) Regulation, operating alongside the existing MFR policy introduced in October 2014. The Regulation, designed to support the security of payments initiatives in the building & construction industry, requires QBCC licensees who hold a contractor grade licence to meet annual financial reporting obligations.
Why are we talking about this now, you ask? Well, for those licensees within financial categories self-certifying 1 (SC1) to Category 3, the time for submission of your financial information is fast approaching. Participants under $30 million in annual revenue are required to submit FY19 reports by 31 December 2019. The penalty for not demonstrating compliance with the MFR could result in the company losing their building licence, fines of more than $2,600 for individuals and more than $13,000 for companies, so if this applies to you, read on!
QBCC have already begun implementing the Regulation with larger firms, in categories 4 to 7, who were required to submit detailed financial information to the QBCC before April 2019, allowing QBCC to determine if those firms are experiencing financial distress. The results so far are enlightening – as of April 2019, at least 18 companies in the higher turnover bracket were found to not meet the minimum financial requirements to operate in Queensland. A further 103 licence holders were issued with warnings for not providing their financials.
Question is, how many under the $30m threshold will be ready by 31st December?
Action Items by 31st December 2019.
QBCC have demonstrated how they intend to assert their authority in the industry by starting from the top down, to promote financially viable businesses and fostering professional business practices. If you fall into this category, it’s vital to work with an accountant who understands the building and construction industry inside out.
The following information is required to be lodged with the QBCC by 31st December 2019;
- a profit and loss statement;
- a balance sheet;
- a debtors and creditors report;
- a statement of cash flow;
- notes to the financial statements containing notes required by the Australian Accounting Standards*;
- a written declaration verifying the information contained in the documents mentioned above*; and
- a description of the measurement, within the meaning of the Australian Accounting Standards, on which the financial statements mentioned above, are based and the accounting policies or reports relevant to those financial statements*.
* (QBCC Financial Category 4 – 7 only)
Alternatively, if you are required to prepare annual reports for ASIC or ASX, a copy of these reports may be lodged to the Commission to satisfy this annual reporting requirement.
The information provided to QBCC must demonstrate that your net tangible assets are sufficient to support your forecasted revenue next year, so it’s paramount that QBCC licensees have a robust financial plan in place and have embedded annual reporting going forward. If any deficiencies exist, it’s imperative that you work with your financial advisor to consider the options available to give you the best chance of maintaining your license.
Our expert team are on hand to help. Don’t leave it to the last minute as December is right around the corner! Contact Tradies Accountant today on 1300 77 50 48 to get the ball rolling on your MFR obligations.