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What to Look for in Accounting Software
In addition to meeting all general accounting principles, a fully integrated software package must include the following key features in order to meet the specific needs of government contractors:
- Track Costs by Cost Objective - Allow accumulation and reporting of costs by multiple cost objectives.
- Timekeeping - Provide an audit trail and maintain DCAA required controls. These should include: Prevent changes once the timesheet is submitted; allow only employees to make changes; maintain a detailed log of all time record changes and provide multiple approval levels; provide security features and flexibility regarding who can access time records; allow electronic time recording from multiple locations; allow electronic time entry by subcontractors; allow subcontractors to make charges as direct employees or ODCs without processing their time through payroll; assure that only approved cost objectives are charged; and provide for time-in/time-out recording at various time intervals.
- Labor Charging Controls - Provide timekeeping data that is consistent with labor distribution reports and that are reconcilable to job cost, general ledger, and financial statement reports.
- Expense and Travel Reporting - Provide tight controls over expense and travel reporting, meet IRS requirements, and make visible allowable and unallowable expenses.
- Indirect Cost Pools and Indirect Rates - Allow indirect labor and non-labor to be assigned to departments, cost centers, central service, service centers, distinct projects, and relevant indirect cost pools. Allow users to set up an unlimited number of primary and intermediate cost pools and bases, using general ledger balances for calculating indirect expense rates. Automatically generate indirect cost data and computation of indirect rates. For each cost pool, provide a supporting schedule for use in Incurred Cost Proposal submittals.
- Cost of Money - Automatically calculate the FCCOM at any cost center level in which the assets belong.
- Actual and Provisional Rates - Monitor indirect rates throughout the year by providing a standard worksheet that allows for automatic substitution of budget data with month-ending actual data. Enable users to assign provisional rates to project charges as a percentage, per unit, or fixed amount. Make it easy to change the provisional rates during the life of the contract.
- Billing - Accommodate a variety of contract types, including Cost Type, Time and Material and Labor Dollar, Fixed Price, Fixed Unit Price, and Other Transactions.
- Screening unallowable costs - Help users identify unallowable costs at the time an expense is entered, assign it to the correct GL account, and then exclude it from billings, incurred cost submittals, forward pricing rates, etc. Enable users to set up unallowable accounts to aggregate unallowable costs from timekeeping and expense forms. Enable users to maintain accounts that include both allowable and unallowable costs.
- Incurred Cost Submissions - Automate incurred cost proposals, such that users can "push a button" to generate required submittals.
Check list written by Bill Lennett, CPA, founder and CEO of Government Contract Associates (GCA), a national consulting firm that advises government contractors on cost and pricing. re-published with permission by LisaDeMaio of Virtual Contract Manager and Wind2 Software, Inc..
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