Perfect DCAA Accounting Systems By Veterans Of The Field

All government contracts are critically examined by the hawk agency, the DCAA to ensure that the charges the contractors are placing are well-justified and that the government exchequer and the public tax money are not spent in vain. The system thus calls for furnishing appropriate accounts systems that will support all the costs that have been submitted to procure the contract. If the contract happens to be a fixed price negotiated one, the need for an elaborate accounts system is not necessary. The accounts should appropriately support the costs projected.

 

The particular subparts

 

The need for an accurate dcaa accounting system is imperative in cases of cost reimbursable contracts. The accounting system has to be in compliance with all the stipulations of the FAR Subpart 16.3 that is very different from the normal accounting systems though there are some common features. In most cases, companies that are successful in obtaining the government contracts take the help of professionals that have several years of working for the DCAA and now work as private accounts consultants. This will ensure that the account system is just what the DCAA experts are looking for as the consultant has been on the other side of the table.

 

The special requirements

 

The major government contracts will require the company to pass through twelve essential fields that are a requisite of the dcaa accounting system. Apart from the different sections of costs and their details, the other major mark is an adequate time keeping system that the organization must have. It is not necessary to have only a digitalized system, a manual system will also suffice provided it is properly documented and signed by the adequate authority. The labor and the distribution of their jobs with the appropriate timekeeping methods is another vital area among the twelve crucial areas.

 

Separating the costs

 

Among the areas where most companies fail to meet the DCAA compliance, is separation of the direct and indirect costs. These are parts of the general ledger that have to be maintained by defining the norms of how such ledger is being maintained. The segregation of the direct and the indirect costs into separate pools have to be defined clearly for the reasons for which they are incurred and how they affect the overall cost system in the general ledger.

 

Playing it safe

The failure to comply with the DCAA standards calls for severe fines, that can have crippling effect on small companies. At times, the fines may extend to imprisonment that can be reduced in case there is direct cost submission by the contractor. To avoid all such difficulties it is best to consult those that have expertise in the requisite field as the common accountants are not aware of a lot of the fine areas that this specific accounting systems demands.