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
Unallowable Costs
Direct vs. Indirect Costs: GovCon System Setup | GovCon Wednesday
Estimated read time: 6 minutes Key Takeaways Point 1: The Immediate Fix. Consistency is an absolute legal mandate under FAR Part 31. You cannot classify an expense as a direct cost on one contract and an indirect cost on another when the underlying circumstances are identical. Point 2: The Compliance Risk. Treating direct vs. indirect classifications as a casual data-entry task creates immediate exposure. Under DFARS 252.242-7005, system deficiencies in cost structural accounting can… Read More
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
Common DCAA Findings (and How to Avoid Them): A Practical Guide for GovCons
GovCon Wednesdays Estimated Read Time: 5 minutes Most DCAA “findings” aren’t about bad intent they’re about weak controls, inconsistent documentation, or preventable process gaps. The good news: the most common issues repeat across contractors, which means you can address them before an auditor does. This post covers the most frequent DCAA audit findings Government contractors run into and a straightforward way to prevent each one. What DCAA means by a “finding”… Read More
GovCon Chart of Accounts
Using a Single Overhead Rate?Simplify Your Chart of Accounts: For easier tracking and reporting, consider structuring your general ledger accounts as follows: direct costs starting with 5, fringe with 6, overhead with 7, G&A with 8, and unallowable costs with 9. While you’re free to customize the numbering to suit your preferences, this sequence provides a clean, intuitive framework that keeps things simple and consistent.