What is a Project Trust Account?
Project Trust Accounts are statutory trusts designed to protect subcontractor payments.
Each eligible project needs its own dedicated bank account to support this trust.
The project owner deposits funds and progress payments into this account, from which the head contractor disburses payments to project subcontractors.
Only after all subcontractors are paid can the head contractor remunerate themselves.
Three Tips for Successfully Navigating Project Trust Accounts:
1. Prepare Early
Companies will often need to manage many PTAs simultaneously, which can be complicated for the administration side of the business.
Early preparation is critical to ensure compliance with trust laws and avoid penalties, so make sure trust accounts are set up with a Queensland Building and Construction Commission (QBCC) approved financial institution.
Notify QBCC when opening new trust accounts and meet all required notifications and training obligations.
2. Get Professional Help
Seek expert advice to establish if your projects require trust accounts or use the QBCC Project Trust Account tool.
Consider seeking professional legal advice and assistance for contract revisions to align with new payment requirements.
Recognise the vital role of accountants in managing project funds effectively.
3. Consider Software Capabilities
Assess the abilities of your current financial and accounting software to track payments for each project and automate transactions across multiple trust accounts.
Highlight the importance of choosing the right software to ensure compliance and efficient financial management to company leaders and management.
What’s next for Project Trust Accounts?
On March 1, 2021, the Queensland Government initiated the phased rollout of PTAs.
PTAs are currently mandated for Queensland state government, and hospital and health service projects valued at $1 million or more, and state authority, local government and private sector contracts of $10 million or more.
From 1 March 2025, the scope will expand to contracts of $3 million or more for state authorities, local governments, and private entities and individuals. And from 1 October 2025, the trust account framework will be fully implemented and apply to all eligible contracts of $1 million or more.
Currently, a retention trust account (an account where cash retention amounts are withheld until they are due to be paid) must also be established by head contractors and private sector principals where a project trust account is required for the head contract. Retention trusts will extend to any contracting party down the contractual chain for a project trust project where they hold cash retentions, from 1 October 2025.
Simplify Project Trust Account Compliance with Access Coins
Access Coins offers the right tools to simplify the complex compliance requirements for construction businesses striving to meet PTA framework compliance, including:
- Managing an organisation’s multiple financial and project ledgers seamlessly
- Identifying and mitigating compliance risks
- Streamlining reporting across various accounts and contracts
At Access Coins, we have the experience and solutions to help you navigate the complexities of trust account compliance effectively.
Contact us for more information on managing PTAs >
