How a government contractor qualifies their accounting systems with Defense Contract Audit Service

Accounting systems

A government contract can be a welcome source of income for your company, but it also comes with a few stringent regulations and auditing requirements that need to be adhered to. The biggest of these is DCAA Compliance–and you may need the assistance of a reputable accounting company for this. Being able to successfully complete a DCAA audit helps to ensure not only the legality of your business but also that you get additional government contracts in the future. 

What is a DCAA compliant accounting system?

Being DCAA compliant means that your company has the systems and procedures in place to comply with the DCAA audit process. You won’t get any formal certifications for this, instead, the DCAA audits will check if your company meets the Cost Accounting Standards, Federal Acquisition Regulations, and various other government policies and rules. There are no specific accounting systems that are formally approved by the DCAA, so saying that an accounting system is DCAA compliant simply means that they meet the requirements of various audits.

Here are 3 things every government contractor needs to know about DCAA compliance.

  1. The whole company needs to follow the same standards whether they are working on a government contract or not. This compliance pertains to every single employee and includes daily time entries, accurate project-level time allocations and a clear record of both unpaid and paid time. 
  2. Accurate time and labour tracking are key,  so software tools that can record and classify information precisely can help in this regard. Nearly 75% of DCAA compliance requirements are related to time tracking.
  3.  In the past, DCAA compliance was graded, and government contractors could fall short in a few areas but still be deemed compliant as long as they addressed the issues where they fell short. These days, however, it’s either a PASS or a FAIL. You will not be given time to address any issues and you simply won’t make the cut if your systems are not up to scratch.

DCAA compliance is not always easy to acquire and maintain but using the right accounting software coupled with frequent employee training will help qualify your accounting process with the DCAA’s stringent standards.

For further assistance with accounting services and queries to get your organization’s accounting systems DCAA compliant, get in touch with us via our website. Here at Georgen Scarborough Associates, we are always happy to share our expertise. 

Guide to non-profit accounting

non-profit accounting

When you started your non-profit organization your zeal for ‘the cause’ may have outweighed the headaches associated with administrative and bookkeeping tasks that are crucial for your organization to function optimally. Many executive directors and board members are not trained accountants and may not know where to begin with sorting out their finances and budgets. Non-profit accounting is also very different from for-profit accounting, but if you set the following 6 basic structures in place, it will be a great start to running your non-profit accounting system successfully.

6 basics for non-profit accounting

  • Find a good non-profit accounting/bookkeeping solution
  • Get an accounting solution that can do fund accounting 
  • Find a method to create and analyze financial statements
  • You will need a way to record in-kind donations 
  • Open a separate bank account for your non-profit
  • Start with bank reconciliation and set up some budgets

Bookkeeping for non-profits

You will need to appoint a treasurer or financial officer to keep track of your organization’s financial records. Your treasurer will need a good bookkeeping system and invest in some non-profit friendly accounting software. Here at Georgen Scarborough we use Quickbooks Non-Profit Edition. This will make your treasurers’ life that much easier in keeping track of your organization’s finances.

Budgets

A budget is vital to make sure that your non-profit is on the right track financially. Budgets usually cover one fiscal year and have 2 main categories: Expected income and expected expenses. Creating a budget is easy if you keep in mind the following 4 steps:

  • Set goals – assess what you want your non-profit to achieve in the year ahead
  • Develop doable estimates for how much money it will cost to realistically achieve these goals
  • Estimate your income sources for the year
  • Alter budget to align expectations with reality

Your non-profit friendly accounting software should ultimately allow you to track how your income and spending for the year align with your annual budget goals.

Whether you are a new non-profit organization or not, let Georgen Scarborough Associates take the headache out of administrative tasks. For more information on accounting services for your non-profit get in touch with accounting company George Scarborough Associates today.