Some builders assume that QBCC involvement only becomes relevant after an owner complains, defective work is identified or a dispute arises. In practice, Queensland building businesses need compliance systems that operate throughout the entire project.

Construction-stage inspections, building contracts, variations, payment records, Minimum Financial Requirements and financial reporting can all form part of a builder’s broader compliance responsibilities.

Queensland building work may involve inspections, certifications and supporting records at different stages. Depending on the type of project, this may include requirements relating to excavation, footings, foundations, slabs or final stages.

Builders should therefore avoid waiting until the end of a project to organise their records. Inspection documents, certificates, photographs, subcontractor records and correspondence should be maintained throughout the construction process.

Many building disputes begin with an undocumented conversation. For example:

• The owner believes certain work was included in the original contract
• The builder considers the work to be an additional variation
• A subcontractor changes the scope directly with the owner
• Materials or designs are changed without confirming the price
• Work is completed but the payment claim lacks supporting records

When an agreement is only verbal, it can become difficult to establish the scope, price, authority and timing of the additional work.

If the scope, materials, design, price or completion date changes, the builder should prepare written variation records addressing:

• The work being changed
• The reason for the change
• The increase or decrease in price
• The effect on the construction schedule
• Who requested the variation
• Whether the owner approved it
• Relevant dates and supporting evidence

Builders should not rely solely on telephone calls, site conversations or messages passed on by subcontractors. Where time is limited, an email or project management platform can still be used to create a written record.

If an owner requests a change to materials, design, scope or sequencing, the instruction should be confirmed in writing. The record should also explain any likely price or timing consequences.

Where an instruction is given verbally, the builder can send a follow-up email confirming their understanding and requesting written approval.

Subcontractors may communicate with owners on site, but the builder must retain control over the contractual scope and approval process.

Internal procedures may require that:

• Subcontractors do not approve owner-requested changes
• All proposed changes are referred back to the builder or project manager
• Additional work does not begin without written approval
• Verbal site instructions are promptly recorded
• Subcontractor invoices match the approved scope

Builders should retain clear records including:

• Building contracts and schedules
• Written variations
• Progress claims and payment applications
• Invoices, receipts and bank records
• Material orders and supplier documents
• Site photographs and inspection records
• Correspondence with owners, project managers and subcontractors
• Delay, weather and site issue records

Good documentation is not only useful during a dispute. It can also improve job costing, project profitability analysis and cash-flow forecasting.

Many builders have strong construction experience, but their accounting and compliance systems may not develop at the same pace as their turnover, project size and workforce.

Building businesses may need to monitor:

• QBCC Minimum Financial Requirements
• Maximum Revenue limits
• Net Tangible Assets and financial ratios
• Annual financial reporting obligations
• Project cash flow and progress payments
• Accounts receivable and supplier commitments
• Transactions between companies, trusts and related entities
• Tax, GST, PAYG withholding and superannuation obligations

A building company may report an accounting profit while still experiencing significant cash-flow pressure. Progress payments may be delayed, material prices may increase, subcontractors may need to be paid and several projects may enter high-cost stages at the same time.

Builders should regularly review:

• Budgeted and actual costs for each project
• Expected cash requirements for the coming months
• Outstanding progress claims
• Supplier and subcontractor liabilities
• GST, PAYG, superannuation and income tax obligations
• QBCC financial ratios and turnover changes

• Document and approve every variation in writing
• Retain owner instructions, payment claims, invoices and construction evidence
• Prevent subcontractors from changing the scope without approval
• Regularly review cash flow, Maximum Revenue, MFR and the business structure

FABC Accounting assists builders, renovators and subcontractors with:

• QBCC annual financial reporting
• Minimum Financial Requirements reviews
• Maximum Revenue applications and adjustments
• Accountant declarations and financial statements
• BAS, GST, payroll and superannuation compliance
• Project cash-flow and management reporting
• Company, trust and asset structuring
• Tax planning and business growth support

Many building businesses do not fail because they lack construction skills. Problems often arise when documentation, financial reporting, cash flow and compliance systems do not keep pace with the growth of the business.

This article provides general information only and does not constitute legal, building contract or personal financial advice. Different projects may be subject to different contractual, inspection and regulatory requirements. Appropriate legal or specialist advice should be obtained for contract disputes, payment disputes and building law matters.