Estimated read time: 6 minutes Key Takeaways Point 1: The Immediate Fix. Stop treating audit prep as an annual fire drill. True compliance means embedding an automated, contract-level cost ledger structure into your monthly close routine—ensuring every direct transaction satisfies FAR 31.201-2 standards before an invoice is generated. Point 2: The Compliance Risk. Operating an un-reconciled or reactive accounting system invites immediate administrative disasters. Under DFARS 252.242-7005, significant deficiencies in your cost accounting internal controls allow… Read More
SF 1408
GovCon Chart of Accounts: Setup Guide | GovCon Wednesday
Estimated read time: 6 minutes Takeaways Point 1: The Immediate Fix. Do not make your general ledger accounts do all the tracking work. Keep your Chart of Accounts (COA) lean by using accounts strictly for cost type (e.g., Direct Labor) and mapping where it belongs using your software’s project, job, or cost center modules. Point 2: The Compliance Risk. Mixing unallowable expenses like business entertainment or penalties into standard operating accounts contaminates your indirect cost pools…. Read More
How to Set Up a DCAA-Compliant Accounting System | GovCon Wednesday
Estimated Read Time: 6 mins Takeaways Point 1: The Immediate Fix. No software platform is “DCAA-approved” right out of the box. True compliance requires intentionally structuring your general ledger around distinct cost objectives and logical allocation bases under DFARS 252.242-7006. Point 2: The Compliance Risk. Failing to isolate unallowable costs or failing to reconcile your job-cost ledger with your general ledger creates structural audit risk. Under DFARS 252.242-7005, an unoptimized system with material weaknesses can trigger… Read More
GovCon Accounting System Setup: DCAA Basics | GovCon Wednesday
Estimated Read Time: 6 mins Key Takeaways Point 1: The immediate fix. Commercial off-the-shelf accounting software configurations are not compliant out of the box. You must immediately restructure your general ledger into explicit segments: direct costs, indirect pools, and FAR-defined unallowable accounts. Point 2: The compliance risk. Failing a Defense Contract Audit Agency (DCAA) pre-award survey—governed by the Standard Form (SF) 1408 checklist—will instantly disqualify your firm from winning cost-reimbursable, labor-hour, or… Read More
Labor Distribution Controls: The Backbone of DCAA-Compliant Accounting
GovCon Wednesdays Estimated Read Time: 5 minutes Labor is typically the largest cost element on government contracts and the most scrutinized during audits. Even contractors with strong accounting systems can fail reviews if labor distribution controls are weak, undocumented, or inconsistently applied. In GovCon, labor distribution isn’t just about tracking hours. It’s about proving that labor costs are accurate, allocable, approved, and traceable from time entry all the way to billing. This article… Read More
GovCon Accounting Systems & Controls Series #1: What Makes an Accounting System DCAA-Compliant?
GovCon Wednesdays Estimated Read Time: 5 minutes Winning (and keeping) government contracts requires more than competitive pricing and technical expertise. Your accounting system plays a critical role in whether you can bid on cost-type work, bill the government accurately, and withstand audit scrutiny. One of the most common misconceptions we see is this: “DCAA-approved accounting system” isn’t a formal certification. Instead, the Defense Contract Audit Agency evaluates whether your system meets specific criteria designed… Read More