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.
- 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.
- 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.
- 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.