As a government contractor, our client needed to have an accounting system that met the requirements for compliance as established by the Defense Contract Audit Agency (DCAA). They learned that this would be essential, in order to be awarded contracts such as Seaport or Cost Plus. They were using QuickBooks Pro accounting program. They asked themselves questions like:
Can QuickBooks be set up to be DCAA compliant?
Is it a robust enough program to handle multiple contracts and multi-million dollar revenues?
Or do I need to upgrade to a more powerful program, like Deltek?
If so, is it even set up properly to handle all of the various transactions?
Just about every government contractor who uses QuickBooks has asked themselves these questions. The fact is that QuickBooks can be set up to be compliant, and it can handle multiple contracts and multi-million-dollar revenues. However, it must be set up correctly. And in our experience, in most cases it has not been. Unless the infrastructure of the program is customized to address these issues, a government contractor will not be able to pass an audit by the DCAA to have their accounting system approved.
Solution:
Initially, we conducted a review of their current QuickBooks file to see how much work needed to be done. Once this was determined, we took the following steps:
Re-categorized the Chart of Accounts and established a correct Project Cost Structure for current projects
Provided Standard Operating Procedures based on DCAA compliance using QuickBooks
Discussed procedural changes necessary to achieve/maintain DCAA accounting compliance
As a result of our services, our client successfully passed an audit by the DCAA. Their accounting system was found to be adequate and was officially DCAA approved. Having a DCAA-approved accounting system has allowed them to confidently bid and be awarded various contracts, thus increasing the company’s overall revenue.
