Overview:

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To better protect Subcontractors' retention funds the legislation in New Zealand and Australia (Western Australia and Queensland so far) requires these funds to be kept in Retention Fund Trust Accounts.

Managing these trust accounts can be time-consuming and complicated, leading to potential non-compliance and financial risks for head contractors.

To comply with these regulations, head contractors are required to:

1. Establish and maintain a trust account for all subcontractors' retentions. This can either be a Bank Account (New Zealand & Australia) or a Financial instrument, which are normally provided by an insurance company (New Zealand only).

2. Report to subcontractors regularly (monthly in Australia and at least once every 3 months in NZ) with the details of the historic Payment Certificates and Retetion balance on all their subcontracts with details of what is being held and where.

3. Provide subcontractors with the details of each Trust Account on the Claim Payment Certificate and Payment Schedules.

 Benefit for our Workbench Clients:

• Reduce manual work, and time.

• Compliance with legislation.

• Improved relationship and trust with Subcontractors. Transparency.

• The impact of non-compliance can be extremely costly for the company, and also penalties for Directors.

How to manage Retention Trust Accounts in Workbench:

1. Retention Trust Accounts
   A maintenance screen is available to create and maintain a list of Trust Accounts or Financial Instruments that can be assigned to each Subcontract.
   

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   1. Maintenance list for subcontract Trust Accounts.

   2. Pre-installed types Subcontract Retention Trust Account and Subcontract Retention Financila Instrument. New ones may be configured in Lookups with type = SubcontractRetentionTrustAccountTypes

   3. Trust can be marked as inactive to prevent it from being selected in Subcontracts.

   4. Editing of Trust Account details is disabled once it has been used in a Subconract Claim. If any details change, a new one can be created with the updated details, and assigned to the Subcontract. Each approved subcontract claim

   5. Specific GL Account for each Retention Trust account if required. This will be used when batching the Subcontract Claims.
      

2. Subcontracts
   

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   1. New optional field for Retention Trust Account.

   2. Edit is controlled with 'Edit Retention Trust Account details on Subcontract' permission.

   3. Permission is included by default in Administrator and Finance roles.

   4. Edits audited to EventLog.

   5. Retention Trust Accounts on a Subcontract can also be set from the Retention Management screen, to reduce time and for better visibility on what Subcontracts require to be updated.
      

3. Subcontract Claims
   

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   1. New optional field for Retention Trust Account inherited from Subcontract.

   2. This RTA field will reflect the current Subcontract RTA until it is locked at approval.

   3. Unapproving a subcontract claim will refresh and get the latest RTA from the subcontract.
      

4. Reports

• Subcontract Retention Statement under Subcontract Reports. It can be executed by Subcontract or Subcontractor including all payment details for each subcontract.

  • Only includes Subcontracts with Retention balance different to $0.

  • If the Subcontract Claim has not been certified yet, this will be noted next to the claim reference.

• Subcontractor Payment Certificate (wbSubcontractClaim003 )with all the Trust Account details. Print report from each Subontract Claim. Trust account details will only display if the Subcontract has a Retention Trust Account.
  

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• Subcontractor All in One Report (wbSubcontractClaim005) with all the Trust Account details. Print report from each Subontract Claim. Trust account details will only display if the Subcontract has a Retention Trust Account.
  

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• Databases with NZD currency will display the following additional text:
  ”This is a report on retention money withheld from you as party B under subpart 2A of the Construction Contracts Act 2002. You may inspect the accounts and records that section 18FC of that Act requires us to keep in relation to retention money withheld from you.”

5. Retention Balance reporting to multiple Subcontractors:
   The legislation requires that Subcontractors be reported of their Retentions periodically. Workbench will enable Head Contractors to send these Retention Balance reports with all the details of the Retention Trust Accounts in bulk.
   

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   1. A new tab will be added to the Subcontracts Retention Management screen, where a list of Subcontractors with a Retention Balance can be selected to send the Balance report. This report is the same format as the Retention Balance Statement, and it only contains information about the particular subcontractor to which the report is being sent.

   2. The Commercial contact on each subcontractor company will be used as the contact to send the Retention statement.

   3. For bulk emailing, if using Office 365, it is safer to turn Control Parameter 'Office 365 Bulk Email' on, to force the emails to be sent using Sendgrid, our SMTP server, rather than Office 365, as this does not support sending emails in bulk very well.

Screen Guide:

• Template allows you to choose which datasheet Template to use. Only templates with the type of "Subcontract" will be visible. This also serves as the link to the datasheet document.

• Date is the date that you want this datasheet to be lodged.

• Sub

Next Steps:

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