GovCon Wednesdays
Estimated Read Time: 5 minutes
Year-end closing doesn’t start with numbers it starts with your accounting system.
For government contractors, knowing how your ERP or accounting software handles closing steps is critical. Whether you use Unanet, Deltek, QuickBooks, or another system, each one has its own year-end process to ensure your financial data is accurate, complete, and DCAA-ready.
A clean close begins with organization. When your system is set up and your team knows what to review, every other part of your year-end from reconciliations to audits becomes smoother and faster.
Why It Matters
Your accounting system is the backbone of your compliance.
Before your accountant or tax professional can finalize your 2025 books, your system must:
- Reflect all posted transactions (no open items or unapproved timesheets).
- Have accurate indirect rate applications and allocations.
- Produce reliable reports like the general ledger, trial balance, and contract revenue summary.
Skipping or rushing your system’s year-end checklist can lead to unbalanced accounts, missed accruals, or incorrect indirect rates issues that delay your audit and tax filings.
Step 1: Follow Your ERP’s Year-End Checklist
Each accounting platform includes built-in steps or recommendations for closing the year:
- Unanet: Run project-level revenue reports, review indirect rate allocations, and lock posting periods.
- Deltek Costpoint: Reconcile subsidiary ledgers to the general ledger, post labor distributions, and verify pool calculations.
- QuickBooks Online: Review undeposited funds, reconcile all bank accounts, and run balance sheet and P&L reports by class or customer.
If your software provider offers a year-end guide or checklist, follow it carefully. This ensures every transaction, payroll run, and vendor bill is recorded in the correct period avoiding messy adjustments later.
Step 2: Confirm System Settings and Access
A successful year-end close also depends on user roles and permissions. Confirm that only authorized personnel can post adjusting entries and that approvals are completed before locking down 2025.
Recommended checks:
- Confirm all timesheets and expense reports are submitted and approved.
- Ensure system access is updated remove users who have left the company.
- Review approval workflows for accuracy (especially if you added new contracts or departments this year).
This extra step prevents data changes after closing and protects audit integrity.
Step 3: Run Key Reports Before You Close
Once your data is reviewed, run and save all critical year-end reports:
- General Ledger and Trial Balance (for tax and audit use)
- Accounts Receivable and Accounts Payable Aging
- Unbilled Revenue and Contract Status Reports
- Indirect Rate Calculation Summaries
Save these reports securely your auditor, DCAA representative, or tax preparer will need them. Consistent reporting ensures you can quickly answer questions and demonstrate compliance.
Step 4: Document Your Year-End Close
Finally, keep a brief internal Year-End Close Log. Note the date, steps completed, and any manual adjustments made. This record becomes your reference point during future audits or reconciliations.
Documentation shows your team followed a structured, repeatable process something auditors love to see.
Setting the Stage for a Smooth Year-End
Your accounting system is more than software it’s your foundation for compliance.
When it’s accurate, organized, and closed properly, you’ll spend less time fixing errors and more time planning for 2026.
At VSINGH CPA, we help GovCons use their accounting systems effectively to meet FAR, DCAA, and audit requirements from system setup to year-end reconciliation.
👉 Check out our YouTube Shorts for quick GovCon year-end tips: https://youtube.com/shorts/13LKywO-MH4
Need help reviewing your accounting system or preparing for close? Contact VSINGH CPA today.
Coming Up in the GovCon Year-End Closing Series
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✅Tip #1: Know Your Accounting System & Year-End Checklist
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2️⃣Tip #2: Communicate Early with Tax Professionals & Auditors
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3️⃣Tip #3: Reconcile and Analyze Accounts
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4️⃣Tip #4: Validate Revenue & Lease Entries (ASC 606 & ASC 842)
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5️⃣Tip #5: Prepare 1099s & Charitable Contributions
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6️⃣Tip #6: Review Contract Status Reports & Submit Data to Tax/Audit Teams
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7️⃣Tip #7: Final Wrap-Up — Year-End Complete, What’s Next?