Construction ERP Consultant, Australia

Security of payment, claims and payment schedules

Each Australian state and territory has its own security of payment legislation. The details differ, but the pattern is consistent: a contractor serves a payment claim, the respondent replies with a payment schedule if it intends to pay less, and there is a route to adjudication if the two do not agree. Timeframes matter, and so does the content of each document.

Head contractor agreements are often based on Australian Standard general conditions, heavily amended, while residential builders work under state-specific domestic building contracts. Either way, the commercial team needs to know at any moment which claims are outstanding, which schedules are due and what was claimed against what was scheduled.

That is why I design the ERP contract record to hold the claim dates, the reference date pattern, the amounts claimed, scheduled and paid, and the status of every variation. Claims to clients and schedules issued to your own subcontractors are both covered, because a head contractor sits on both sides of the process. The legal interpretation stays with your lawyer; the system must simply make the dates and amounts impossible to lose.

Retention, GST, BAS and taxable payments reporting

Retention is a constant source of leakage in Australian construction. Money held on you by clients is forgotten after practical completion, and retention you hold on subcontractors can carry obligations, as some states require certain retention money to be held in trust or in a separate account. I make retention a tracked record with release triggers and, where your state requires it, a clear link to the trust account balance. Check which rules apply to your contracts with your advisor.

On tax, GST codes on claims, purchases and retention releases feed the BAS. If those codes are applied inconsistently, BAS preparation becomes a reconstruction exercise. Businesses in building and construction that pay contractors also need to report those payments in the taxable payments annual report, so the supplier record and payment data must support it. I specify these as core requirements and test them with real transactions, while your accountant confirms the treatment.

When retention and tax are designed in from the start, month-end becomes a review rather than a clean-up, and the construction job cost reports finally line up with the ledger.

Awards, payroll and the people on site

Labor cost in Australian construction is shaped by industrial instruments. On-site workers are typically covered by the relevant modern award or an enterprise agreement, with allowances, overtime rules, inclement weather provisions and other conditions that change the true cost of an hour. Superannuation, workers' compensation premiums and, in construction, state-based portable long service leave schemes add further on-costs. Payroll events are reported through Single Touch Payroll.

Many businesses run payroll in a specialist Australian payroll system or in Xero or MYOB payroll, which is often sensible. The gap is usually the link back to job cost: hours are paid correctly but posted as a lump sum, so the job never sees its real labor cost. I map how timesheets are captured on site, coded to job and cost code, costed with on-costs and posted back to each job.

Subcontractors and labor hire add another route, through purchase invoices or agency timesheets. Each needs the same job and cost code discipline so the cost-to-complete review reflects every dollar spent.

Moving off MYOB or Xero, and why independent advice helps

Most Australian builders I speak with started on MYOB or Xero, adding job tracking apps, spreadsheets for claims and variations, and sometimes a separate estimating tool. That stack works until there are several crews, larger head contracts or multiple entities. The decision then is whether to extend the stack with a construction add-on or move to an ERP that owns jobs, commitments and claims.

I compare both routes on the same scenarios, because I do not sell software or implementation hours. Typical deliverables are a process map, a scored shortlist through ERP evaluation, a solution design review and a migration plan that brings open jobs across with contract value, approved variations, claimed to date, paid to date and retention reconciled. Specialist electrical, plumbing and mechanical firms should also read ERP for MEP. For broader Australian topics such as GST, BAS and time zones, see my ERP consultant page for Australia and the Australia hub.