Three searches here, one underlying question: where do STCs live in an installer’s accounts? There is no single right answer, because it depends on the business, its accounting basis and what its accountant is comfortable with. This page sets out the common patterns. It is general information, not accounting or tax advice.
What you are actually holding
At different points on a job you can hold three different things:
- A right to create STCs, which the customer assigned to you.
- Certificates, once the CER registers them and they sit in the registry.
- A debt owed by the trader, once you sold them or lodged them for settlement.
Where it sits in your accounts depends on which one you are describing.
The common treatments
As a current asset or receivable
Most small installers do not trade certificates themselves. They lodge claims with a trader, and the amount the trader will pay is, in effect, a receivable. When a claim is lodged and the price is locked, many set up the amount due as “STC receivable” or “STCs awaiting settlement”.
As inventory
An installer that holds certificates in its registry account, waiting to sell, can treat them as inventory held for sale. This is more common where the business self-registers and sells on its own timing. See whether it is worth self-registering.
As revenue
Revenue from STCs is generally recognised when the sale occurs or when the entitlement to payment is established, depending on your accounting basis. The customer’s discount is part of the system sale. The certificate sale to the trader is a separate line.
A simple structure that works
| Account | Purpose |
|---|---|
| STC sales (income) | Revenue from certificate sales to traders |
| STC receivable (current asset) | Claims lodged and priced but not yet paid |
| STC clearing (current asset) | Holding account while claims are in validation |
| GST collected | GST shown on RCTIs |
Reconciling the clearing account to your trader’s statements every month will show you stuck claims before they become old debts.
The end of the financial year
At 30 June the questions are: what is lodged but unpaid, what is registered but unsold and what has been rejected or recalled. Rejected claims may need to be written down. Our guide on clawback shows how recalled certificates affect your position.
What this means for installers
Treat STCs as a distinct revenue stream, not a footnote on the job. That helps cash-flow forecasting, since the timing of settlement can differ from the timing of the install by days or weeks. See STC payment terms and how installers manage cash flow.
For entering transactions in practice, read how to record STCs in Xero or MYOB, and see the tax side in do STCs count as income. The pricing page shows how rates and settlement are set up, and how it works shows the claim flow.