Government contractors
have to be extra careful about maintaining accounting record accuracy,
particularly when they’re going to work on specific types of contracts. For
most contractors, however, it can be quite a challenge to put up with the
ever-evolving rules and regulations. One of the processes that’ll inevitably
take place is a survey involving the accounting system you use. This process is
the SF
1408 you probably heard about but aren’t entirely aware of.
Fortunately, you’ll find some info on it in this write-up.
The measures of controls
In the Standard Form, you
should display the control measures you have in place that rule out the direct
charging of indirect costs and vice versa. You should consider creating a
flowchart to outline the expense transactions stemming from purchase
requisitions. This flowchart should give a clear picture of the buying orders
correlating with those transactions, as well as the documents received against
the same. If you receive an invoice from the vendor, you should add it too.
The ledger displaying job costing
The DCAA expects you to
have an accounting system that can identify the direct costs associated with
the contract accurately. It includes upfront expenses, as well as the ones that
keep accumulating during the entire lifetime of the contract. When it comes to
meeting this particular requirement, you should consider maintaining a job cost
ledger to track expenses by project or task orders.
The groupings
For the submission of
incurred costs, you must accumulate your indirect expenses in logical cost
groupings. To that end, having a system in place will prove to be extremely
beneficial as it will allow you to present in-depth information regarding
indirect costs, especially when grouped in pools. You’ll also have to show a
current general ledger trial balance that has to match the chart of accounts.
An accounting platform can help you in these tasks, but you should check the DCAA
Accounting System Requirement list first.
Timekeeping
Finally, your timekeeping
system has to be able to pinpoint employees and keep up with the amount of time
they spend doing their jobs. It also has to connect those hours to the correct
cost objectives.
