You’ve taken the classes, skimmed DCAA’s "Information for Contractors," read DCAA's "ICE Manual," and utilized the official ICE Model to build your submission, but you are still wondering if you can draft an acceptable proposal. Worse yet, you wonder if the ICE submission could trigger an audit. The good news is that you can deploy a few processes to ensure that your first submission is your only submission. If you already know the...

Revenue recognition has been a hot topic since the introduction of ASC 606 in 2014 - an accounting standard that changed the criteria for recognizing revenue for all companies and introduced a nuance unique to government contractors. Many small companies struggle to understand and apply the concept of recognizing revenue when it is earned versus when cash is received. As part of GAAP compliance, our role is to ensure that revenue and costs are...

Cash basis accounting is easily understood and usually adopted by most start-up companies. Cash basis reports only consider the flow of cash in or out of the business without regard for the often complicated rules of accrual basis accounting. Accrual basis accounting requires matching of revenue and expenses and recognition of revenue when earned and expenses when incurred - all regardless of when the cash was received or spent. Accrual basis...

Developing indirect rates is only one piece of the puzzle for government contractors. Managing indirect rates leads to financial and contract success. We find that many contractors only calculate indirect rates at the end of the year and do little to manage rates throughout the year. Several factors affect indirect rates including unplanned expenses, budget errors or oversights, and won or lost contracts. Monitoring and managing indirect rates...

Service Contract Act (SCA) contracts introduce a new layer of complexity and reporting to government contracts. Contractors must consider adjustments to the indirect rate structure such as a separate fringe pool or onsite and offsite overhead pools. Wage determinations instruct contractors on the minimum wages and fringe benefits required including the option for wages in lieu of benefits - a cash payment that is often miscalculated and posted...

Government contractors often struggle with customer invoice creation because of the varying requirements from customer-to-customer and contract-to-contract. QuickBooks Online and Desktop provide opportunities for efficient creation of customer invoices from time and expense data. The keys to success lie in proper setup of Items for labor category and expenses, and the automated synchronization of time and expense data. We find many clients spe...

Labor distribution converts hours into dollars and distributes those dollars throughout the GL and across jobs. Payroll journal entries record the employer's portion of employment taxes and offset salaries payable created by the labor distribution process. Both are necessary for the accurate calculation of indirect rates for government contracts. Errors often include failure to segregate labor accounts and properly account for employee deducti...

Proposal pricing is key to winning government contracts and executing them with maximum profitability. This webinar focuses on the completeness of direct costs and the accuracy of indirect rates. We'll discuss three types of budgets, their relationship to indirect rates, and how they affect each other. We'll share our three-step process for preparing budgets and explain when budgets and indirect rates must be updated as part of the proposal pr...

The annual incurred cost proposal (ICP) is no small task for government contractors. With 23+ tabs in an Excel file and many supporting documents, the ICP is often a weeks long project. We find that a significant portion of time required to complete the ICP is the gathering of documents, researching variances, and answering questions. Think of the ICP like a tax return for your government contracts. Your tax preparer sends you a list of necess...

Audits in the world of government contracting are a matter of when, not if. Accounting system surveys, pre-award and post-award audits and incurred cost audits, are just a few among many that government contractors will face. The key to successfully passing an audit is understanding compliance, knowing the basics of the audit process, written policies and procedures, adequate internal controls, and regular testing. This course will focus on th...