Being a Queensland owned and based business, we understand the constant pressure of staying compliant with the Queensland Building & Construction Commission (QBCC) financial requirements. The regulations exist to ensure businesses are financially sustainable and are no small part in why Queensland construction can be proud of being at a higher quality than many other states.
With only 4 months left in the financial year, and recent this blog post will focus on the best practices you can implement now to meet the financial requirements effectively, with a reminder of what those key requirements are, and recent changes to QBCC policies.
QBCC Financial Requirements
The basic components of the requirements are:
- Allowable Annual Turnover: The maximum revenue a business can generate based on its Net Tangible Assets (below). This is split across 9 categories with different reporting obligations across each category.
- Net Tangible Assets: The value of a business’s assets minus its liabilities. These are adjusted for exempt or reduced assets.
- Current Ratio: A measure of a business’s ability to pay short-term obligations, how much $ in easily convertible cash it holds versus the creditors it needs to pay quickly.
Recent Changes to QBCC Policies and Regulations
There are big moves in February 2025 from the QBCC, making life a bit easier:
- Trust Account Requirements have been pushed back. Initially slated to change to contracts worth over $3m in March, the government have deferred (but not scrapped) the scale up of trust accounts.
- Reporting for Small Builders has reduced by scrapping the Minimum Financial Requirements (MFR) reporting for SC1 & SC2 businesses (turnover under $800,000) to remove the need to provide annual financial reports.
- Announced Passive Fire Protection and Licensing to receive additional time (up to May 2030) to meet new occupational licensing requirements for passive fire protection work and provide free occupational licences for QBCC contracted plumbers to do certain fire protection work.
Best Practices for Managing Minimum Financial Requirements
Beyond compliance, adopting good financial management practices can help your business thrive. Here are some recommendations:
- Maintain Accurate Financial Records:
Sure. We’re going to keep saying it though. If you know exactly where your business is at, you can make the right decisions moving forward. Our most successful clients (and us) have their financial records up to date daily.
- Regular Financial Reviews:
It’s now February and you should be looking at your up-to-date financial accounts to see your current compliance with maximum revenue, net tangible assets, and the current ratio.
If you need to increase your licence, timing this with the end of year can decrease costs by using the same set of reporting twice.
- Budgeting and Cash Flow Management:
Once you know where your business currently is, it’s time to consider what’s left in the next 4 months.
- Which projects are coming in and what tenders are going out?
- What’s the timing of your completion stages coming up, is it worth pushing invoicing out (defer tax) or bringing invoicing forward (increase net tangible assets)?
- Can the business afford to upgrade equipment or to finance that new vehicle? If we need it before our reporting date, what contracts must pay out first?
If you’re in a great position and all requirements are met, consider paying yourself out extra capital to reduce the financial risk in the business.
If you haven’t already, check out Josh’s recent article on bucket companies for detail on managing financial risk in companies.
- Taking Profits:
These items correspond with best business practices for a reason – they are the building blocks of financial stability and future success. With 4 months left in the year, we’ve been reviewing our QBCC clients to set the foundation for reporting in June and will be sure to leverage this information with tax planning season right around the corner…
If you have any questions or need assistance with your financial management, our team is here to help.
