Overview:

Workbench enables head contractors to efficiently manage Project Trust Accounts (PTA) and Retention Trust Accounts (RTA) and simplifies the compliance process.
Project Trust Accounts aim to better protect Subcontractors' funds, and improve the relationship between Head Contractors and Subcontractors, and foster transparency within the industry.

Some construction projects must hold project funds on trust accounts dedicated to that project (especially those projects in Queensland that need to comply with Queensland Building and Construction Commission regulations - QBCC). These trusts are called Project Trust Accounts (PTA), and you can use Workbench to simplify the management and reporting of these.

To comply with regulations, head contractors are required to:

1. Establish and maintain a trust account for each Project.

2. Establish and maintain a trust account for all subcontractors' retentions.

3. 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 Retention balance on all their subcontracts with details of what is being held and where.

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

5. Inform a Subcontractor when Retention money has been moved from the Project Trust Account to the Retention Trust Account (AUS only).

6. Inform a Subcontractor when a payment has been made from the Project Trust Account (AUS only).

7. Provide a Trust Account Ledger report.

 Benefit for our Workbench Clients:

• Reduce manual work, and time.

• Compliance with legislation.

• Improved relationship and trust with Subcontractors. Transparency.

• Simplified compliance.

Parties involved:

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How to configure Project Trust Accounts in Workbench:

Configuration Check list

1. Create Project Trust Account: GL Code for Cash Account, Bank details. Assign it to the Contract. User must have permission included in its role Edit Project Trust Account details on Contract.

2. Use Workbench Documents Register to notify stakeholders about the creation of the PTA. Alternatively, this can be done outside of Workbench.

3. Create a Retention Trust Account (or use an existing one), and assign to the Subcontract. User must have permission included in its role Edit Retention Trust Account details on Subcontract.

4. Ensure your all Subcontractor companies have a Commercial contact set up. All automated communications will go to the Commercial Contact:

   1. Bulk reporting of Retention Balances.

   2. Notice of Subcontract Claim Retentions transfer from PTA to RTA.

   3. Notice of Subcontractor Certified Claim Payments.

5. Set a List of Eligible Costs to identify AP Invoices that are eligible costs to pay from PTA. Create new activities if necessary.

6. Update ‘Report AR Invoice Project Trust Acc Footer’ setting.

7. Verify and update standard Scheduled Utilities:

   • Notice of Subcontract Claim Retentions transfer from PTA to RTA.

   • Notice of Subcontractor Certified Claim Payments

   • Enabled them with the prefered schedule.

   • Edit email subject and email body if needed.

8. Enable Trust Accounts tab in Contracts if not available:

   • Setting: Contract Tabs

Configuration Detailed steps

1. Setup Project Trust Accounts

   1. Enable with Control Parameter: BETA FEATURE - Contract Project Trust Account = Yes

   2. A Contract can have a PTA assigned to it. A new PTA can be created from the same place where Subcontract Retention Trust Accounts are created: Trust Accounts menu.

   3. A PTA will have

      1. a Code to identify it internally,

      2. a name or short description,

      3. Trust Account Details including and in this exact format:
         Financial institution - Bank account name - BSB number - Account number

      4. GL Trust Cash Account for the corresponding GL Account for the Cash Account in the financial system. This is a memorandum only and will be used to reconcile the Receipts and payments coming from the Financial system.
         Receipts and Payment will be highlighted in red on the Trust Ledger if their respective cash account GL account does not match the GL Trust Cash Account on the PTA of the Contract (AP invoices/Subcontract Claims payments, Job Receipts) orthe GL Trust Cash Account on the RTA of the subcontract (retention payments). This is to validate that funds go into and come out the right Bank accounts.
         GL Code can be manually entered, or selected from the list of GL Accounts if it exists.
         

         

   4. Once the PTA has been created for a specific Job, it can be assigned to the Contract, from the Contract Tab:

      

2. PTA on Contract Claims
   The Contract Claim will display the PTA assigned to the Contract on the Job in the Details section of the Contract Claim. This will be locked once the Contract Claim is approved. For backwards compatibility, any past Claims created before a PTA was added to the Job, will not display a PTA, as it did not have a PTA when the Claim was approved.

   

3. Contract Claim reports
   Footer setting: Report AR Invoice Project Trust Acc Footer
   The PTA on a Claim will be reflected on the footer of a Contract Claim report and also on one of the Job Invoice reports (for a Finalised Claim) for your clients’s reference:

   1. Reports supported:
      Detailed Payment Claim Certificate by Line Status (wbContractClaim015)
      Detailed Payment Claim Certificate (Schedule) (wbContractClaim017)
      Payment Claim Certificate (wbContractClaim003)
      Payment Claim Invoice (wbARInvoice006)
      Payment Claim Invoice (Schedule) (wbARInvoice009)

      If a PTA is populated in the Contract, the settings used for the Contract Claim footer and Job Sales Invoice footer (these settings usually show a generic business bank account) will be ignored, and instead the new setting ‘Report AR Invoice Project Trust Acc Footer’ will be used. A token can be used to reference the PTA Trust Account Details on the PTA for the specific Job the Claim or Invoice is being printed.
      Token: $InvoicePTA
      Example on how to set the footer for PTA Contract Claims. A setting value is installed by default:

      

4. You can find Jobs that have a PTA set with the filter on Jobs lits: Has Project Trust Account:

   

5. Eligible Costs
   To assist Accounts Payable teams in identifying which costs can be paid from a PTA, there is a report that will display a list of Subcontract Claims and AP Invoices that are eligible to be paid with Project Trust Account funds. Report name: Project Trust Account Eligible Costs
   
   QBCC has a detailed definition of what is Protected Work and what must be paid from a PTA. This report will include unpaid subcontract Claims (by definition all subcontract claims are eligible costs) and also any AP Invoices that have at least one cost line with an eligible cost activity. Also, by definition, if at least one of the lines in the AP Invoice is Protected Work, the entire AP Invoice can be paid from the PTA account.
   The list of eligible activity codes can be set by opening the PTA Eligible Cost Activities link on the Trust Accounts screen. This will open an Activity group created by the system and used for the sole purpose of identifying activities that are valid for PTA Costs. This Activity Group PTACOSTS is not used for any other purpose:
   

   

   
   
   

6. Subcontractor Payments notice - Scheduled Utility
   On Contracts with a PTA, a utility can be scheduled to automatically send email notifications to Subcontractors to notify them that a Payment has been made from a Trust Account. An email is sent to the Subcontractor’s Commercial Contact. And it will only look for Payments done in the past 30 days. Any Payments older than this will not be notified.
   
   The schedule is created and disabled by default. You can make changes to the schedule, the subject, and the email body and enable it.
   

PTA Ledger and RTA Ledger

Once everything is configured in Workbench, all the related PTA and RTA events will be displayed in the Trust Accounts tab in the Jobs Contract section. In a typical scenario, the process would be as follows:

PTA & RTA Ledgers’ sections

The Ledger will highlight in red those records related to Payments or deposits that have been done from the incorrect account:

• Principal deposit into incorrect PTA account: When the Principal deposits funds in into the incorrect bank account, which is not the PTA account. This is validated by comparing the GL Trust Cash Account on the PTA to the GL Account on the Receipt. The Receipt is imported from the financial system and it includes the GL Account Code for the bank account where the funds were paid into (Contract/Receipts/To Account).

• Beneficiary not paid from PTA: When the beneficiary (Subcontractor or Supplier) is not paid with funds from the PTA but from another account. This is validated by comparing the GL Trust Cash Account on the PTA to the GL Account on the Payment. The Payment is imported from the financial system and it includes the GL Account for the Cash account from where the Subcontract Claim or AP Invoice was paid (Subcontract/ Payments/ From Account).
  Eligible AP Invoices have the same validation.

• Beneficiary Retention releases not paid from RTA: When the beneficiary’s (Subcontractor) Retention releases are paid but not with funds from the RTA, from another account. This is validated by comparing the GL Trust Cash Account on the RTA on the Subcontract to the GL Account on the Payment. The Payment is imported from the financial system and it includes the GL Account for the Cash account from where the Subcontract’s Retention Release was paid (Subcontract/ Payments/ From Account).

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  The warning can be removed by editing the record by clicking on the icon:

  • Adding a comment will turn it into a Blue info icon, meaning there is still something pending to solve on this, maybe waiting for Accounts Payable to confirm the funds have been transferred.

  • By marking the comments completed the icon will turn a green tick, leaving a reminder that an action was taken on the record, and it is all sorted now.

Claims certified for a different value than claimed

When a Claim is not certified %100, this is displayed in the PTA Ledger as two records:

• Payment Claim - the original claimed value from the Subcontractor. Date is the Claim Date.

• Payment Schedule - the difference between Original Claimed value and the Certified(Scheduled) value. The Date on the Ledger will be Payment Due date if it has not been approved yet, otherwise Approved date once it is approved.

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Blocked Retention Releases from Subcontract Claims When There Is a PTA in the Project

When a Project has a Project Trust Account (PTA), a subcontract claim cannot include both the retention release and the claim itself. Specifically:

• Payments for a subcontract claim must be paid with funds from the PTA.

• Payments for a retention release must be paid with funds from the RTA.

• The Payment of a document cannot be split into the release portion and the certified portion.

• Payments are key components of the respective Trust Ledgers and must be linked to separate documents: one document for certification and payment from the PTA, and another document for the subcontract retention release and its payment from the RTA.

The system will enforce this by:

• Blocking manual editing of the retention value if there is a claimed/certified value.

• Preventing a claim/certification if a retention release is included in the document.

Reporting by Subcontractor/Supplier

Use the Subcontractor/Supplier filter to isolate PTA/RTA data for a specific supplier/Subcontractor. As the records on the Ledger grow it is too hard to find the associated transactions on all sections of the Ledger for a specific Subcontractor.

There is also a requirement for reporting purposes, to be able to show records for a specific Subcontractor (as per QBCC).

When the subcontractor filter is used the data will be filtered as follows:

Next Steps:

Check how to configure and manage Subcontract Retention Trust Accounts.