Yep, we get it. QBCC Minimum Financial Requirements (MFR) can be confusing! One of the regular sources of confusion is how the timing of annual financial reporting works. Specifically how important it is that your EOFY accounts are in shape, ready to comply with QBCC’s financial reporting requirements later in the financial year: for Cat 1 and above this is December 31, for SC1 and SC2 licences this is March 31.
Here we delve into why your June 30 accounts are important in relation to your QBCC licence requirements and how they shape your lodgement of QBCC’s required annual report and potential MFR (Minimum Financial Requirements) Report*.
Your EOFY financials will be a snapshot of your business’s financial health for the 23/24 financial year.
These accounts are the basis of the annual report that every QBCC licence holder must submit to the QBCC.
Your EOFY financials will be used by the QBCC to test whether you have met your MFR obligations for the year and will likely be the figures used for an MFR report, should the Commission require you to lodge one.
It’s crucial to understand that, while QBCC Annual report lodgement happens in December or March depending on your licence category, it’s your June 30 financials that undergo assessment.
If they fall short of the required standards, corrective actions may be necessary, potentially leading to increased expenses and stress.
Rather than having to deal with the fallout of not passing MFR the best approach is to deal with your financial position before June 30 – because, once you pass this date your numbers are locked in and you have fewer options at your disposal if you don’t pass MFR.
This area of accounting is highly specialised so it’s important you work with an accountant who understands the QBCC’s requirements
If you’re concerned about your June 30 numbers stacking up, get in touch so we can do a free MFR health check.
Each year the QBCC requires you to lodge your up-to-date financial information, providing them with key information about your business’s finances.
The annual report relies on information from the most recent financial year, therefore drawing information from your June 30 financials.
Depending on your licence category, the annual report may consist of your internal management accounts (for example your balance sheet, profit & loss statement, aged debtors and creditors listings, and a statement of cashflow) or a completed three-page annual reporting form provided by the QBCC.
You don’t need an accountant to help you prepare the annual report itself, however using a specialist accountant familiar with QBCC requirements is advised as you prepare your EOFY information. This way, we can spot any potential issues well in advance of the QBCC’s annual reporting deadlines and help you to rectify or manage them.
QBCC does not require licence holders to submit a MFR report annually.
You’ll only need to provide an MFR report in specific situations, such as when applying for a new licence or if there are significant changes in your financial circumstances.
It’s important to note that a request for an MFR report may be triggered by your annual report if it shows certain changes in your financial circumstances.
Unlike annual reporting, MFR reports must adhere to certain accounting standards, must be accompanied by signed financial statements and will require signatures from both you and an accountant.
To use your June 30 financials in an MFR report they would need to be signed off by your accountant no later than 31 October in order to comply with QBCC’s 4-month rule.
If they were signed off outside of that, then your 30 June financials can still be used for annual reporting, but you would need to provide additional, more recent, financial information as well to be used in the MFR report.
Since an MFR report can take some time to prepare it’s important to consult us as soon as possible to determine if you will need to submit one so we can prepare and lodge the report before QBCC’s deadline.
As June 30 approaches it’s important to start preparing to meet your minimum financial requirements now to ensure a positive result when you submit your annual reports.
Understanding QBCC financial reporting requirements may seem daunting, but it’s crucial for maintaining compliance and ensuring your business remains in good standing with the QBCC and your stakeholders.
Now is the time to reach out so we can start the process of understanding your business’s financial position and getting your business’s accounts ready for EOFY.
We offer a free QBCC MFR Consultation with one of our specialist QBCC accountants and encourage you to book in to discuss any concerns you may have about your EOFY accounts as soon as possible.
*Financial statements relied on in the preparation of MFR Reports must be no older than 4 months from the date of signing of the MFR Report.
