It can be rewarding to work with government entities. However, maintaining compliance can be challenging. To satisfy the audit requirements of DCAA, contractors need expertise in related skills, knowledge of regulations to set up multiple systems, and information on the audit process.
Bringing all these talents together is imperative for optimal business decision-making, which can be challenging for small contractors. This is why many companies turn to CPAs to ensure DCAA compliance.
Top Benefits Of Working With A DCAA Compliant CPA
Without adequate resources and a technical expert to train your internal staff, ensuring that everything is implemented according to regulations, can be challenging. Naturally, this can also be difficult for smaller companies without dedicated means for regulatory compliance.
DCAA compliance has an integral role in business management apart from allowing you to win more contracts. Therefore, there are various benefits to hiring a reputed and dependable DCAA-compliant CPA.
Learn more about why hiring a DCAA compliant CPA might be a good idea for you.
1. A Deeper Understanding Of Rules And Policies
DCAA-compliant CPA professionals have experience, expertise, and knowledge of the applicable rules to government contracting. Mainly, these come from Federal Acquisitions Regulations (FAR), Cost Accounting Standards (CAS), and Generally Accepted Accounting Principles (GAAP), which tend to be complex and technical to comprehend.
Experienced and DCAA-compliant CPAs can explain the identification of costs as either indirect, unallowable, or direct in plain language. They can help you understand how to monitor direct costs by agreement and allocate indirect expenses into pools.
Moreover, they can also direct you on how to compute indirect rates and ensure that unallowable charges aren’t billed.
Also, they are well-versed in fulfilling the comprehensive requirements for timekeeping, including how your system is arranged, who completes and approves timesheets, and policy documentation and authorizations. In addition, DCAA-compliant CPAs can also help you with specifications around the billing system, labor distribution process, and how to review and monitor procedures.
2. Comprehensive Audit Compliance
Outsourcing your compliance work and connecting with a competent DCAA-compliant CPA can also take the guesswork out of your DCAA audits.
Whether it’s a Pre-Award Survey or an Incurred Cost Audit, a DCAA-compliant CPA can precisely point out focal areas. This guides the auditors to areas they can focus on, including which calculations, reconciliations, and reports they need to provide and the audit trail they can review.
Accounting professionals know common mistakes that workers often make, and they can provide guidance and tips on how to prevent them. Also, they can perform a simulated audit beforehand. Having a solid understanding of the key areas of scrutiny means that you can recognize and fix problems in advance, increasing your possibility of audit success.
3. Efficient QuickBooks Services
Multiple small government contractors utilize QuickBooks, an accounting software, as it offers flexibility and affordability. But QuickBooks isn’t designed to meet Federal Acquisitions Regulations requirements right out of the box.
With professional help, you can understand the add-on elements needed to prepare your Chart of Accounts and achieve compliance to demonstrate appropriate cost segregation via account sequencing and proper utilization of the job and class functions.
Moreover, you can get input on how to map payroll items or services, software configuration techniques on labor distribution, timekeeping, and the ability to monitor contract funding and payroll.
In addition, DCAA-compliant CPA professionals can also elucidate how the transactions flow via your accounting system, how allocations and calculations are done, analyze your system for inaccuracies, as well as demonstrate to you the multiple available reports in QuickBooks.
They help you extract information for auditors quickly and efficiently along the same lines. This knowledge and data can empower you with in-depth financial and operational insights for informed business decisions.
4. Improved Business Outcomes
Expert guidance and direction concerning audit compliance can potentially allow you to enhance and improve your business’s financial viability. For instance, contractors often feel they need to “play it safe” if they are uncertain how a specific cost should be apportioned. They treat all costs falling into a gray area, like public relations and advertising, as unallowable.
But, there are cases when these costs are permissible. And if you don’t claim them, you might erroneously underestimate your indirect charges and fail to recover them from the government. This can negatively impact your company’s bottom line.
When To Consider Hiring A DCAA Compliant CPA
Organizations often struggle and find it challenging to establish a team with sufficient expertise and time to cover all these important areas. As a business owner, you may prefer to concentrate on the company instead of checking for accounting inaccuracies while encouraging your teams to do the same.
However, when you leave processes and systems unchecked, especially in a highly-regulated setting, errors involving indirect rates, cost allocation, billing, or timekeeping can happen. This may result in poor business decisions and performance, losing out on upcoming contracts, failed audits, and delayed fines and payments.
If you have any reservations about ensuring your practices and systems are compliant, a CPA’s advisory and consulting services can help you conduct a professional assessment to discover any potential issues and suggest how you can fix them.