Setting Up Your DCAA Accounting System
Depending on your circumstances, the process of setting up your accounting system will either involve a conversion of your existing accounting system, or an installation of a new, (typically QuickBooks-based) DCAA compliant accounting system.
The steps involved for each of the different scenarios, as well as the costs and expected turnaround time, can vary slightly depending on a number of factors:
- Are you backdating to January 1st of the current year, going back even further, or starting on a specific date?
- What is the current condition of your accounting system? Are there unresolved issues?
- What gaps exist in your accounting system, and how long will it take to address each?
Once our experts have a better sense of your "road map to DCAA compliance," we can provide your small business with a quote and expected lead time for bringing your system into compliance, or installing your new system. As we've discussed, the steps involved can differ depending on your specific circumstances, but the following is a rough order of tasks in order to get a system up and running:
- Install a general ledger program (ReliAscent® normally recommends a desktop version of QuickBooks®), or bring your current general ledger system into compliance by...
- Formatting a company template within the general ledger program to:
- Structure a Chart of Accounts (or restructure your COA)
- Segregate the direct and indirect expenses
- Isolate unallowable expenses
- Set up a job cost environment where the direct expenses may be charged to a single final cost objective
- Set up the labor distribution system
- Insure GAAP compliant accounting
- Establish a DCAA compliant timekeeping system (either manual or automated) - we recommend SpringAhead, GHG/ClockWise or TSheets
- Establish a payroll system compliant with government requirements
- Establish a method to perform:
- Indirect Rate calculations on a regular basis (typically, the government likes these monthly)
- Provide for Subsidiary Job Cost Reports in a fashion that the government likes to see
- Establish your policies and procedures
- Training your employees (timekeeping software, daily JE's, etc.)
For more information on the individual requirements/components of a DCAA compliant accounting system, download our popular white paper: "A Quick Guide to the DCAA Compliant Accounting System - Understanding the SF 1408."