Completing and renewing government contracts provides growth opportunities for businesses with the right compliance workflows. While growth is desirable, the Defense Contract Audit Agency (DCAA) reviews government contracting businesses to ensure they follow financial, timekeeping, and labor compliance practices established by numerous government regulations, including the Federal Acquisition Regulations (FAR).
When organizing their business to scale operations for new contracts, many owners confront timekeeping challenges that if left unaddressed could lead to DCAA compliance charges. Non-compliant contractors risk losing their contracts or facing federal fines and debarment if they fail to address their deficiencies before the next audit.
To avoid the consequences of failing a DCAA audit, consider these guidelines a road map to scaling your business while maintaining compliant DCAA timekeeping practices. Regardless of your industry, an experienced CPA can help you deploy timekeeping workflows that keep your financial records compliant with all relevant rules and regulations.
Address the Common Challenges of DCAA Timekeeping Compliance
The DCAA outlines its definition of functional timekeeping systems based on FAR guidelines. By understanding this policy, your business can identify and address the challenges many contractors face as they attempt to expand.
Most often, the primary roadblocks to timekeeping compliance include talent shortages, skill gaps, and remote worker management. These shortcomings are often discovered by DCAA auditors when interviewing team members about compliant timekeeping regulations, also known as a floor check.
Top-performing contractors understand that by deploying employee compliance education and training workflows, they can correct knowledge gaps before they impact the compliance status of the business.
Implement DCAA-Compliant Timekeeping Software
Contractors using manual timekeeping processes often struggle to maintain compliance while scaling due to outdated legal and financial workflows. Since a contractor’s employees must track working hours, log overtime, and label unpaid and time off hours accordingly; any record-keeping inconsistencies or delays in managerial approval can impact compliance.
With modern timekeeping software, contractors can maintain DCAA timekeeping compliance by syncing multi-system data into an organized dashboard.
Managers can still keep manual timesheets, but with the aid of software-based schedule management, they can add, approve, and label time from anywhere with device access. Although the DCAA does not provide or endorse software programs, many programs are designed to accommodate DCAA regulations.
Real-Time Timesheet Management
Timesheet management factors heavily into DCAA-compliant timekeeping practices. Employees must track their assigned work hours, and managers must approve and sign off on them. For government contractors, timesheets are legal documents that can cause a compliance conflict if they are not properly recorded and approved by two supervisors.
One of the advantages of timekeeping software is the ability to send automatic reminders or manual messages to managers to remind them to sign off on worker timesheets by certain deadlines. Streamlining the notification process helps contractors keep real-time visibility on their timesheets while saving their administrators valuable hours.
With everything organized in one system, businesses will have a detailed audit trail for the DCAA auditors to follow. They will be able to view time logs of the changes, including the supervisors who signed off on the hours and any alterations that were made to timesheets due to extenuating circumstances.
Keep Compliant Records
As your business grows and your workflow expands to accommodate larger contracts, your record-keeping practices will be scrutinized by the DCAA. Government contracting businesses are required to keep timesheets for two years, which is far easier with digital software-based document repositories.
Using manual document storage systems, contractors leave themselves vulnerable to theft, fire, or record loss, potentially impacting compliance if DCAA auditors want to view records that no longer exist. To avoid losing timesheets, cloud-based software deployed by CPAs experienced with DCAA compliance helps businesses maintain the requisite audit trail and protect their sensitive company data.
Managing a Multi-Generational Workforce
For many businesses, managing a multi-generational workforce remains a primary concern for maintaining compliance while scaling timekeeping practices.
Gen X and Gen Z workers typically have more experience with technology as well as differing workplace expectations compared to their counterparts from other generations.
Government contractors often integrate multiple generations of workers into one workflow, raising questions about how to train and develop an environment of continuous learning that supports compliance as the business grows.
Recruiting CPAs experienced with compliance learning and development for multigenerational workforces can help businesses organize their recordkeeping and timekeeping practices under one workflow.
A centralized software system that provides communication, document retrieval, and training tools allows managers to organize required legal documents, record work hours, and train employees without unnecessary costs.
Contact Diener & Associates Today to Maintain Compliance While Scaling Your DCAA Timekeeping Practices
Diener & Associates is a team of experienced CPAs focused on helping government contractors overcome common challenges with federal compliance. Solutions include reviewing contractors’ accounting, timekeeping, and legal processes, conducting mock internal audits to detect compliance gaps, and assisting supervisors in their understanding of relevant federal standards, such as the GAAP.
Schedule a consultation today to learn how the expert CPAs at Diener & Associates can help you overcome common compliance challenges, even in your first government audit.