Governments, at the state and federal level in the USA and abroad don’t mess around when it comes to compliance with all rules and regulations, calling on the need for regular government contracting accounting. Obtaining a government contract can significantly scale your business, giving you the extra push needed to improve your profit margin. Nearly any business has the ability to secure a government contract, but only if specific rules are followed, introducing a new set of problems that you might not have the expertise or time to properly handle.
Why Do I Need Government Contracting Accounting?
The Government requires approval of your accounting system before a contract can be secured, giving assurance that your system is consistent with government regulated accounting procedures. Common systems in compliance include FAR, DFARS, CFR, DCAA, and GAAP. Simply put, if your company has won a cost type or reimbursable government contract you will have to remain compliant with the Defense Contract Audit Agency (DCAA).
The opportunities are not limited to major corporations, nor only local firms. Many international, small and midsize companies also regularly contract with governmental agencies. To successfully market to government agencies, especially in multiple countries, you need a strong partner. JS Morlu can help you remain compliant with regulations of the US Government, Canada, United Kingdom, the European Union, and select international governments such as those in Africa, the Caribbean, and Southeast Asia.
What is the Risk of Not Having Proper Accounting in Place?
DCAA, a government auditor, such as GAO, Inspector General, and EU Court of Audits, or a multilateral institution auditor, like World Bank, African Development Bank, Inter-American Development, Asian Development Bank, and UN, is likely to come knocking at your door requesting a full accounting of the bills you sent to the government. If you do not, you face the following risks:
- Mischarging could result in criminal penalties
- Costs being disallowed and your business losing a lot of money
- Being prevented (debarred/suspended) from bidding for future government contracts
- Reputation damage by being charged with fraudulent billings to the government
The government saves billions of dollars each year because of audit findings by DCAA. Avoid the mistakes and pitfalls by turning to experienced experts. JS Morlu’s Government Contractors Outsourcing Group has the experience and power to help companies just like yours address the challenges in today’s competitive government contracting market. Whether you are a prime contractor or subcontractor, a small start-up, an established government contractor, a company experiencing the pain of downsizing, or even just temporarily short-staffed, JS Morlu can help support your accounting group with skilled professional consultants who know their way around your business.
How Can JS Morlu Help?
We offer a unique solution. For companies who aren’t ready to adopt the cost or work associated with instituting an accounting system, we bring you the opportunity to enjoy all the benefits of a compliant system without the investment. Our experts will help you reconfigure your accounting software (QuickBooks Desktop/Online, Sage 50, Deltek-GCS, Cost Point, or Acumatica) to make it compliant. We will also help you process transactions using your inception-to-date data and, when you are ready to bring the functions in-house, your data is clean and ready.
Create the infrastructure and support services you need to become a successful government contractor with our software and experience on your side. If you’re already an established government contractor, we can help you take your business to the next level. The infrastructure and professional expertise necessary to deliver world-class service to the federal government can sometimes be a daunting requirement. We believe that you will find that JS Morlu’s services can bolster your business throughout the life cycle of your relationships with the government, providing you with the critical resources to respond with agility and confidence.
Unlike other firms, we have experienced accountants, auditors, compliance professionals, and accounting system professionals to give your firm a holistic approach. We take a bird’s eye view of your operations to ensure you remain compliant in all aspects, making JS Morlu your one-stop-shop for all things government contracting accounting.
What Services Does JS Morlu Offer?
Outsourcing your complete government contracting accounting and compliance reporting to JS Morlu ensures you can deliver rigorous results without the necessity of hiring and training new accountants unfamiliar with government accounting standards. Our outsourcing fee structure allows first-time and existing contractors a cost-effective solution to satisfy all DCAA/multilateral institutions and foreign government accounting requirements associated with your contracts. We provide various different levels of service including:
- Chart of Accounts Architecture
- Accounting Policies and Procedures Manual
- Accounts Payable Processing Time sheets
- Payroll Preparation
- Financial Reporting, including:
- Balance Sheets
- Income Statements
- Job Summary Reports
- Labor Utilization
- Labor Distribution Reports
- Detail Incurred Cost Submissions
- Billings including 1034 and 1035
- Perform contract close-outs
The Incurred Cost Submission is the most important deliverable under a flexibly priced contract as it is the end result. Often small government contractors get behind on these submissions causing significant challenges. We provide contractors with a solution that meets compliance expectations and maximizes cost recovery under the circumstances.
Does Business Size Affect the Government Accounting I Need?
Governments have different requirements based on your business size, meaning we parallel the requirements with our fee structure and service scope. No company size is too big or small for JS Morlu as we work with clients of varying sizes and industry focus. Let’s take a look at the services offered by each business size.
We provide the following accounting system solutions for government contractors with less than US$10 Million in annual revenues:
- Sage 50
If you are currently using QuickBooks to handle your accounting functions, our accounting experts can help you with your preparation for migration to a more complex accounting system when you are ready to take the next step.
We provide the following accounting system solutions for government contractors with between US$10 to US$100 Million in annual revenues:
- Deltek GCS Premier
- Dynamics (formerly Solomon)
- Sage Intact
- Oracle Netsuite
We provide the following accounting system solutions for government contractors with over US$100 Million in annual revenues:
- Deltek Cost Point
What if I Need an Audit for Government Contracts?
Government contracting accounting audits are not uncommon, with most government contractors going through the tedious process at some point. Internal auditing procedures can prepare your business in the event of a government audit. JS Morlu’s specialists provide thorough internal control reviews to streamline reporting, identify areas of risk and eliminate exposure. Internal auditing is even more important for contractors who have operations in foreign countries, as internal auditing will lead to increased confidence in your operations. We assist contractors with DCAA audits to provide advice regarding DCAA audits of all types. We can provide the following services:
- Perform Audit Readiness Assessment
- Serve as Audit Liaison, allowing management to focus on service delivery
This is all a matter of practicality and client preference. The bottom line is that we want you to pass DCAA and other audits. We provide clients with a road map to avoid the pitfalls of the DCAA and their audits. Success with DCAA or any government-requested audit is an important factor for government contractors. By following our advice, you will ensure that you have the system and controls in place and working to pass your DCAA audits.
How Can I Keep My Government Contracting Accounting in Compliance?
Our government contracting specialists can help you navigate the complexities of compliance issues. Our extensive experience with DCAA allows us to help you become compliant with:
- Relevant Provisions of the Federal Acquisitions Regulations (FAR)
- Relevant Provisions of the Code of Federal Regulations (CFR)
- DCAA Audit Manual
- Specific Agency Regulations such as AIDAR, DFARS
- Generally Accepted Accounting Principles (GAAP)
- Relevant OMB Circulars
- Contractual Provisions
Indirect Rates and Incurred Cost Submissions (ICE)
Indirect costing is the greatest challenge for government contractors. It is both complex and always a hot button for DCAA and contractors alike. Based on our experience, we offer contractors solutions to developing sound indirect cost pools, indirect rates, and incurred cost submissions that meet compliance expectations and maximize cost recovery.
DCAA Compliant Systems
We know what it takes to implement DCAA compliant systems and processes. A compliant system is more than the software. DCAA auditors are not just looking to see if a contractor’s accounting system meets a checklist. The DCAA auditor takes into consideration the Generally Accepted Accounting Principles, or GAAP, and will perform various tests to make sure that the accounting system is in accordance. The system also must be customized to meet the unique needs of the client. We have solutions for both small and medium-size businesses. This is not just software but the whole package. Our package will pass any DCAA audit with minimal cost, time, effort and it will be tailored to meet your needs given your size and contract mix.
Whether you are looking for your first government contract or have multiple under your belt, JS Morlu is your go-to guide on all things government contracting accounting. Our experienced staff has knowledge on all aspects of government compliance, from DCAA audits to government accounting system setups. Reach out today to see how we can help you take your government business to the next level.