Project Trust Accounts (PTA) Management

Owned by Maria Harreguy
Last updated: May 08, 2024
6 min read

Overview:

Workbench enables head contractors to efficiently manage Project Trust Accounts (PTA) and Retention Trust Accounts (RTA) and simplifies the compliance process.
This aims 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 funds 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:

image-20240415-043912.png
Source: Trustee Guide: Project Trusts QBCC
PTA entities.png
Source: Trustee Guide: Project Trusts QBCC

 

 

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:

 

 

 

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. Set ‘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.

    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
    New 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)
      Payment Claim Certificate (wbContractClaim003)
      Payment Claim Invoice (wbARInvoice006)

      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:

       

  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

    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.
    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 schedduled to automaticaly 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 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 email body and enable it.



 

 

 

 

 

 

 

 

 

Next Steps:

Check how to configure and manage Subcontract Retention Trust Accounts.



FAQs:

 

Process Flow: