An accounting system for government contractors is composed of a general ledger, unallowable costs, job costing, labor collection, indirect cost allocation, and billing. An accounting system does not equate to accounting software; it is the process, including written policies and procedures.
Government contractors have to understand the fundamentals of strategic costing and strategic pricing in order to make correct decisions that determine their overall profitability on a job.
Learn more about these five types of government contracts presented in detail - including what they entail, their risks, and the pros and cons of each.
Government contractors should perform an internal assessment of their compliance before an audit is performed and participate in the audit process to ensure a favorable result.
The pandemic and the resulting changes in employee work routines and locations have created a potential cost-allowability issue that many government contractors have not previously encountered – potential idle facilities and/or idle capacity.
Learn about unallowable costs and what determines a costs' allowablility. We also provide a listing of FAR and DFARS clauses that are considered to contain expressly unallowable costs subject to penalties.
Every few years, we reach out relative to the importance of a government contractors’ response to audits performed by the Defense Contract Audit Agency (DCAA), the Defense Contract Management Agency (DCMA), the Department of Labor (DOL) or, for that matter, any other government audit function.
Government regulation requires costs to be classified as either a direct cost or an indirect cost. As we know, indirect costs, in the aggregate, represent the largest class of expense incurred on government contracts. Direct costs, by definition, are identifiable with a specific “final cost objective” while indirect costs are associated with common or joint cost objectives.
Labor recording is the basis for the valuing and allocating the efforts of you and your employees and a critical process for government contractors who depend on it for their product and services costing (read billing/cash flow) and pricing.
While a contractor’s forward pricing rates may sometimes get confused with their provisional billing rates, by the contractor and even the government, they are completely different rates developed for completely different purposes.
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