Government Contract Accounting Services for Contractors

At a minimum: a chart of accounts that separates direct, indirect and unallowable costs, timekeeping that ties every labor hour to a charge code, and job cost records that roll up to each contract. On top of that we build indirect pools (fringe, overhead, G&A), provisional billing rates, monthly reporting by contract, and the written policies DCAA expects to see. How far we go depends on your contract mix. A firm with only firm fixed price work needs less than one carrying cost plus or T&M awards.

DCAA doesn't approve software. It looks at whether your system and your people can identify, accumulate, allocate and bill costs properly, usually through a preaward accounting system review (the SF-1408 checklist is the common reference point). That means daily timekeeping with supervisor approval, unallowable costs kept out of billings, a consistent allocation method, and records that trace from a timesheet to an invoice. Costpoint, Unanet and a well configured QuickBooks Online can all get there if they're set up correctly.

Your indirect rates decide how fringe, overhead and G&A get spread across contracts, so they drive your proposal pricing, your provisional billing on cost type work, and ultimately what you can recover. Rates that are set too low leave money on the table. Rates that can't be supported invite questioned costs. We build pools and bases from your actual ledger, track actual versus provisional rates every month, and flag drift before it becomes a year end surprise.

Yes. Before an accounting system review, a floor check or an incurred cost audit, we walk through your system the way an auditor would: policies, timekeeping, labor distribution, allocations, unallowables, billing. We fix what we can ahead of time, organize the support, and help your team answer questions clearly. We can't promise an outcome, but walking in prepared makes a real difference in how the review goes.

If you have, or plan to bid on, any cost reimbursable or T&M contract, you need a system that can stand up to a preaward review. That doesn't have to mean an expensive ERP on day one. Many small contractors start on QuickBooks Online with proper class and job tracking plus a compliant timekeeping tool, then move to Unanet or Costpoint as headcount and contract volume grow. Setting it up right early saves a painful cleanup later.

FAR is the overall rulebook for federal buying. For accounting, FAR Part 31 cost principles matter most, since they define what's allowable. CAS is narrower and stricter: it governs how costs are measured, assigned and allocated consistently, and it only applies to certain contracts above set thresholds unless an exemption covers you. DFARS adds Defense specific rules, including the business system requirements DoD contractors run into. We help you sort out which ones actually apply to your awards.

An incurred cost submission (ICE) is the annual proposal of final indirect rates that contractors with flexibly priced contracts owe DCAA, generally due six months after fiscal year end. It's built from your general ledger and reconciled to your billings, and the schedules have to tie. We prepare the ICE package, reconcile claimed costs, and help clear up backlog years if earlier submissions were missed.

Yes, and some clients come to us for both. Contractors run into tax trouble like anyone else: a payroll tax balance on Form 941 during a cash crunch, unfiled returns after a hard year, an IRS notice that lands during an audit. Our founder is an IRS Enrolled Agent and handles IRS resolution directly. We also provide fractional CFO support for contractors who need cash flow forecasting, pricing strategy and board level reporting without a full time hire.