A greater amount of power requires equally matched responsibility. In government contracting, this couldn’t be more true. This sector has some of the most lucrative business opportunities a company can partake in, with the federal government spending billions of dollars each year on goods and services.
But this overwhelming amount and the inherent nature of it — involving taxpayers’ money — means a lot of strings are attached. The government has a vested interest in ensuring accountability and transparency in the use of public funds.
As a result, government contractors are held to high standards regarding compliance, and even more so in accounting. Government contract accounting services ensure that these standards are successfully achieved, helping contractors remain in business with the government while reaping the full financial benefits of such partnerships.
Accounting for Government Contracts
The fact that accounting for government contracts is fundamentally different from conventional accounting is surprising to most new government contractors. But how do they differ? Government contract accounting is subject to augmented regulations and standards, such as the Federal Acquisition Regulations (FAR) and Cost Accounting Standards (CAS).
Unlike standard accounting practices, the focus is on ensuring that all costs charged to the government are reasonable, allocable, and allowable. This is usually demanding, often drawing contractors’ time, resources, and focus away from their core business activities.
However, contractors can leverage government contract accounting services to alleviate this burden while ensuring compliance and optimizing profitability.
9 Reasons to Consider Government Contract Accounting Services
With professional government contract accounting services, contractors stand to benefit extensively in many ways. These include:
Compliance
Government contract accounting has supplementary regulations. These statutes are complex, demanding expertise in interpretation and application. Government contract accountants are specialists in these legal frameworks.
Bid Proposal Support
In the procuring process, the government evaluates bidder pricing structures. Bidders are required to submit certified cost and pricing data to be used as a pre-award reference. Government contract accountants can help prepare the required data with optimum accuracy, providing a competitive advantage in the bidding process.
Improved Efficiency
In business, time is one of the most valuable commodities. The success of government contracts rests on the efficient use of time as much as costs and quality. Experienced government contract accountants are versatile and require a minimal learning curve to adjust to unique contract demands.
Resource Optimization
Contractors can choose to maintain an in-house accounting department to strictly manage government projects. However, many find this can be cumbersome and counterproductive, particularly for small and medium-sized contractors.
It’s expensive and involves bureaucratic hurdles, which are a distraction from the primary job. Outsourcing enhances cost-effectiveness byreducing overhead costs and freeing up time.
Financial Optimization
Government contract accounting services ensure maximum reimbursement by uncovering all possible cost recovery opportunities. This translates to a healthier bottom line without compromising compliance.
Flexibility
Contractors can effortlessly adjust the extent of accounting services they receive in response to changing workloads. This primarily benefits contractors with fluctuating business volumes.
Enhanced Reporting and Transparency
Transparency and accountability are non-negotiable requirements in government contracting. The government demands periodic reports on the utilization of public funds. With government contract accounting services, contractors can easily generate timely and accurate financial reports, building trust with the government.
Risk Mitigation
Government contract compliance is usually a murky and complicated territory. It involves a lot of moving parts, which must all work harmoniously to ensure that the contractor remains in good standing with the government.
As a result, risk exposures are abundant and can result in severe penalties if not adequately managed. Government contract accounting services provide an effective buffer against these risks.
Audit Preparation
The government keeps contractors in check throughout the contract period. This is usually achieved through compliance audits, which are dreadful, time-consuming, and disruptive to business operations.
Many audits are triggered by perceived compliance issues, which are primarily a result of inadequate accounting practices. Government contract accountants will ensure that your bookkeeping is compliant to prevent audits or smoothly navigate them if they occur.
Reap Maximum Benefits of Government Contracts
The whole point of engaging in government contracting is to reap the financial benefits and ensure business growth. Why jeopardize this goal or move in the opposite direction with heavy fines and reputational damage?
Government contract accounting services guarantee optimal financial benefits and business growth. But of most importance is the quality of the services provided.
Turn to Diener & Associates for Government Contract Accounting Services
The seasoned government contracting accountants at Diener & Associates have expertise in the intricacies of government contract accounting and provide tailored services to fit unique contractor requirements.
We have a proven track record of helping government contractors with bid proposals, compliance, financial reporting, audit preparations, and cost recovery. Contact Diener & Associates today to help secure your next government contract.