Regarding enterprises connected with building and construction in Queensland, the revised regulation on managing project finances is being implemented now. This is set to include a more streamlined approach to the requirement of its account. This framework applies to all eligible contracts for entities that are part of the state government, hospital, health services, local government, or private sector. The framework requires that head contractors hold the money paid to the project principal in a separate trust account. This is for the benefit and convenience of subcontractors.
A trust account is an arrangement with a third party, a bank, for example, holds the fund for other parties. Its two types are the retention trust account and the project trust account.
The Queensland Building and Construction Commission is responsible for overseeing the operation of project trust accounts and has the authority to conduct special investigations. They are responsible for the maintenance and compliance of trust accounts. They also have the power to order a head contractor not to allow account withdrawals.
The trust accounts aren’t new anymore, but its framework has recently been revised so that business owners can easily apply them and protect the interests of their subcontractors.
The framework allows for a project trust account to be opened when one of the following events takes place: Contracting parties (i.e. the ones who request the work – developer or owner, principal) pay the contracted party (normally, the head contractor) a specified amount in the agreement. In addition, subcontractors are paid by the contracting party for the work they do under the contract.
Aside from abiding by this revised framework, businesses are expected to follow trust account requirements. They must keep a trust ledger, a record for deposits and withdrawals, and a trial balance. A statement bank reconciliation and other reports are also required. All of these can be challenging to keep and manage, which is why many company owners consider using document management software. This is to lessen what they need to address.
Aside from this, anyone in the building and construction industry can also utilize commercial construction estimating software to achieve a faster and more accurate quote.
To know more about this, you can see this infographic from Bizprac.
