You have come to the point that you believe your company can take on a government contract.  You know that you can produce a product or service at a better price and more efficiently than any of your competitors.  In addition, you have a great staff that is not only knowledgeable in many areas, but they are ready and willing to make the journey into government contracting with you.  The stars seemed aligned in your favor, but there is one little problem – you are not sure how to best prepare for the Defense Contract Auditing Agency’s (DCAA) Accounting System Review.  Perhaps, the best thing to do is to get a DCCA consultant on your team.

A DCAA consultant will be able to provide you with the skills and knowledge necessary to be successful during the DCAA Accounting System Review.  There is no overstating the importance of passing every hurdle the DCAA may throw at you.  You only have one chance to show that your company can perform up to standard – there are no rehearsals when they are in the room.  You must be prepared and considering all scenarios before the DCAA ever knocks on the door to perform the DCAA Accounting System Review.  A consultant will be able to lead the way and provide for you the proper preparedness to shine before, during, and after the Accounting System Review.

The benefits of a consult are many when you are just starting out as government consultant.  The consultant that specializes in DCAA affairs will make the transition from a private company to a government contractor a smooth one.  The DCAA consultant can make sure that the software you have chosen to be DCAA compliant is properly programmed to meet standard demands or recommend a program best suited for you needs.  The DCAA consultant can also prepare you in the areas you have yet to consider and the little ins-and-outs that are rarely considered.  Regardless, of how many times you have read the DCAA contractor documents you will not be as prepared as you could be. As a new contractor an experienced DCAA consultant will help you succeed during the DCAA process and Accounting System Review without needing a second act to pass the DCAA tests.

Keeping timesheets is imperative for successfully dealing with the Defense Contract Auditing Agency (DCAA) and fulfill your contract in a proper manner.  Meeting the requirements and demands of the DCAA can be time consuming and tedious; follow these five tips to ease the pain:

¬    Use DCAA compliant software.  These software packages will keep everything at hand and make sure that all needed reports are developed.

¬    Hire a consultant to guide you through the DCAA Accounting System Review.  This will prove beneficial from day one of your contract to the completion.

¬    Make sure your employees are trained and knowledgeable of not only the procedures and process of dealing with timesheets but also what is expected by the DCAA.  Make sure employee leave is authorized and well tracked.

¬    Track all types of expenses meticulously and keep all direct and indirect cost and allowable and unallowable expenses completely separate.

¬    Make sure each report reconciles with other reports.  Check for errors and fraud and waste – the DCAA will.

Remember, being prepared is an important aspect when dealing with the DCAA and successful fulfilling and winning another contract.  Do not underestimate the importance of the timesheet; the DCAA expects the timesheet to be thorough, complete, and free of error.

The Defense Contract Auditing Agency (DCAA) requires a lot of reporting!  For example, DCAA reporting requires that employee work hours be segregated from other areas of the business.  If there are any changes to timesheets reports must show proper authorization and that the payroll department or personal cannot change or control employee hours.

The DCAA also wants procedures and processes that can be checked and verified to ensure there have not been any violations to the timesheets or fraud and waste.  Additionally, reports on timekeeping that thoroughly outline allowable and unallowable costs and direct and indirect cost that are identifiable as well as traceable.

As you can imagine the DCAA wants to know everything and wants to know that you have a system in place to cope with their demands and expectations.  The above is just a taste of the reports that are demanded.  However, do not worry there are steps you can take to best prepare your company to meet the DCAA reporting demands.

First, make sure your accounting software is DCAA compliant and properly meet the demands of the DCAA.  There are several programs available, but choose one that is able to handle more than one contract at a time and offers a DCAA policy and procedural manual built in.  Second, hire a DCAA consultant that can prepare and lead you through all the reporting measures.  These consultants can help you navigate through the sea of expectation that the government has set forth for those seeking to be one of their contractors.  Additionally, DCAA contractors and both help you choose an excellent DCAA compliant software program, they can program the software according to DCAA demands.

Using DCAA software and hiring a DCAA compliant will stop you from pulling your hair out when dealing with government demands.  Moreover, such actions will leave you and your managers doing more productive and focused work that will allow you to perform your contract to the highest possible standards.

If you are wondering what a Defense Contract Auditing Agency (DCAA) contract is you are not the only one.  There is often confusion about what the DCAA does.  The DCAA does not create contracts; the DCAA Audits government contracts to ensure that contractors are able to meet the government accounting requirements.

The DCAA ensures that the contractor’s accounting system is able to separate accounting functions like timekeeping, accounts payable, payroll and others.  They also ensure that policies and procedures concerning separate accounting functions are in place.  Additionally, the DCAA makes sure budget controls have been established along with interim and final contract costs are prepared.  It is items such as this the DCAA address, not the creation of contracts.  You will certainly become aware of the goals and procedures of the DCAA if your company is considered for a bid.  Under these circumstances, the DCAA will look into your accounting system during a DCAA Accounting System Review where they do many more checks than the aforementioned items.

To get through this process consider the following two actions: hire a DCAA consultant that can get you prepared in every area to become a government contractor and using a DCAA compliant accounting system.  A good DCAA consultant will be able to suggest a good DCAA compliant software program that will get you through the DCAA Accounting System Review and have program it to the proper necessities.

So, you have decided to hire a consultant to get you through all the hoops the Defense Contract Auditing Agency (DCAA) has setup. These hoops usually involve rules, regulations, policy, and procedures that can seem and often are overwhelming. You know a DCAA consulting may be costly, but you also know a DCAA consultant will make your life easier when dealing with your contract. You still have one major question, “what do you look for in a DCAA consultant?” This too may seem overwhelming, but the following tips should help.

⎫ Make sure the DCAA consultant is equally good as a researcher as they are in there specialty area. Research is a major component in dealing with contracts, so make sure your DCAA consultant has researching abilities.

⎫ Make sure they have adequate experience. If you are not comfortable with the amount of experience your DCAA consultant has you will feel shaky throughout the life of the contract. You do not want to continuously question if you made the right choice in hiring a consultant or if that consultant is providing proper and correct information.

⎫ Question what areas the DCAA consultant feels come natural to them. Do they do best with procurement advice? Are the great at negotiation? Are they especially good at re-pricing and settlement? Whatever you need, see that they comfortably perform that function.

⎫ Question how well the consultant knows the DCAA Accountant System Review and the process. This will come into hand when the DCAA comes to ensure your company is able to meet the demands of DCAA regulation, policy, standards, and expectations.

⎫ One area of major importance is whether the consultant is not only aware of what is DCAA accounting but if they are thoroughly knowledgeable with the DCAA compliant software you have chosen. If you have not chosen software yet, and this is why you have opted for a consultant, question how knowledgeable they are about all the different options from which there is to choose.
⎫ Choose a DCAA consultant that can talk to you from the head. That is, can speak without queue cards or notes; what they know is ingrained and answers are as correct as they are spontaneous.

⎫ Ask a potential DCAA consultant what function they believe consultants play. It is important that there is an agreeance between what they believe and what you need. Write a list that address your expectations and discuss the matters with the potential consultant.

It’s good to know that QuickBooks can now be compliant to the Defense Contract Auditing Agency. Within a phone call or two, you can have the QuickBooks system up and running. You will need to contact a third-party to align your QuickBooks to be DCAA Compliant, but it is well worth it – anything that eases the pressures of DCAA compliance helps.

Once you determine your contract type, fixed-priced, “costs,” or initial contract, you will be able to let your QuickBooks consultant know what you need done. If you don’t know exactly what needs to be done to become QuickBooks DCAA Compliant, don’t worry, these individuals know what needs to be done according to contract type.

QuickBooks can easily become DCAA compliant. All you need is third-party to program the software to meet the standards set forth by the Defense Contract Auditing Agency. Having your QuickBooks DCAA compliant will prove helpful through the contract journey and the internal manual will help guide you through your endeavors as a government contractor.

A third-party programmer can prepare your system to standardize and adequately document actions on daily, monthly, or annual bases. Regardless of the type of contract, your company must be able to tackle the needs of that contract type. If you are providing fixed-price contract than you will need to ensure that your QuickBooks can determine progress payments; for “costs” contracts your Quicken will need to accumulate costs, and for companies that use QuickBooks for newly approved contracts will need to be designed to estimate future costs.

Once you decide to bid on a contract and know whether it is fixed-price, “costs” contracts, or if you are a new contractor you will be able to determine what criteria your QuickBooks will need to meet. If you are diligent and put in the necessary effort, you may find that your QuickBooks can be adapted for all contract types.

Neither the DCAA nor any other federal agency endorses software products. However, smaller companies can pass that nail-biting DCAA Accounting System Review. QuickBooks are able to get you through your first few contracts with the help of a third-party developer to adjust the QuickBooks into proper compliance.

The process is not difficult. You need to contact those who can set the system up in such a way as to ensure that the system tracks direct and indirect costs by job, that it properly allocates labor costs as direct or indirect. The system will also have to adapt to specific timekeeping requirements, such as managerial approval of timesheets, timekeeping procedures, direct and indirect labor cost and labor tracking hours. Additionally, the system will have to segregate data as necessary by the DCAA standards and requirements, track interim, final contract costs, and create detailed reports prepared as designated by the DCAA.

This may seem overwhelming, but there are many organizations that provide the necessary services you will need to adapt the QuickBooks software and to avoid major headaches later.

Although the Defense Contract Auditing Agency (DCAA) does not profess, endorse, or back any software products, there are products available to make sure that your dealings with the DCAA are pleasant ones. QuickBooks is a great option for DCAA accounting. For start-up companies the purchasing of software can get pricey, but when dealing with government contracts, the monies can be recouped. Now, do not worry, the costs are not completely unaffordable economically, but being without a DCAA compliant software program can get real expensive and overwhelming.

How do you know if QuickBooks for DCAA accounting is a viable option? Answer these questions. Does you current system track direct and indirect costs by job, does it properly place labor costs as direct or indirect? Does it deal with specific timekeeping requirements, such as managerial approval of timesheets and timekeeping procedures, or track hours worked and if they are direct or indirect labor? Does your system segregate data as necessary by the DCAA standards and requirements? Does it track interim and final contract costs? Does it create detailed reports prepared as designated by the DCAA?

If your answer is anywhere close to, “No, my system does not do all of the above” or” Yes, but it takes a real long time and man hours;” then QuickBooks for DCAA accounting is a viable option. Nevertheless, do not get too excited just yet, you need a third-party to make QuickBooks software compliant. For your first contract, your use of QuickBooks will cut the mustard during the DCAA Accounting System review; this is especially true if the program has been optimized. However, as your company grows and you start collected more contracts you will have to adjust into a more powerful software program like Microsoft Dynamics NAV.

If you are planning to become a government contractor, you should also plan for a DCAA Accounting System Review. The Accounting System Review is done for several reasons, one of them being to ensure that your accounting system is standardized and adequate to properly document all actions during the life of your contract. Your system, depending on type of contract, must be able to do address the needs according to the contract type. The types and review goals of contracts are ensuring that systems for fixed-price contracts can determine progress payments; that systems for “costs” contracts can accumulate costs, and that systems on recently approved contracts can estimate future costs.

Unfortunately, the above items are not the only things an auditor will be looking for. They also want to see that you have proper policy and procedure manuals that align with company practices and consistency. Additionally, the auditor is ensuring that you have proper segregation and allocation of costs and line items, along with internal controls. Human resource issues will be evaluated for compliance of timesheets, timecards, proper authoritative signatures, and work distribution. Moreover, and perhaps the most important aspect of the DCAA Accounting System Review, is the checks for tracking all types of costs. This would include, direct and indirect costs, allowable and unallowable costs, interim costs, budget and reconciliation controls reports.

Now the above is a good start when preparing for an audit and DCAA Accounting System Review. Yes, it may make you cringe, but it will be fine. Take the time to read up on the DCAA Accounting System Review policy and procedure and learn what will be expected of you and what will be taking place during the review. If this is your first DCAA Accounting System Review, don’t hold your breath and read over everything that addresses the DCAA Accounting System Review twice to make sure you have everything in place and ready. If you have already gone through the DCAA Accounting System Review read over everything that addresses the DCAA Accounting System Review three times to avoid getting too comfortable with contract expectation which can easily lead to a DCAA Accounting System Review foul-up.