How Does ReliAscent Set Up My DCAA Accounting System If...

1) I have not used a "standard," off-the-shelf accounting software previously?

In this case, a small business needs help immediately (but the good news is that you are starting fresh, so the time and costs associated with setting up your system are minimized). The following is a rough order of tasks needed to get a system up and running:

• Install a general ledger program (ReliAscent normally recommends QuickBooks®)
• Format a company template within the general ledger program to:
• Establish a DCAA compliant timekeeping system (either manual or automated)
• Establish a payroll system compliant with government requirements
• Establish a way to do:
• Indirect Rate calculations on a regular basis (normally the government likes monthly)
• Provide for Subsidiary Job Cost Reports in a fashion that the government likes to see
• Establish a system of policies and procedures
• Training to employees 

2) I have an existing QuickBooks® system but I don't think it's compliant?

ReliAscent will take a look at your current QuickBooks® system and in a cursory review, identify gaps in DCAA compliance that need to be fixed.  These gaps typically fall under the major areas identified in the governments Form 1408.  The next step is for ReliAscent to provide a quote to the company on how to fix this.  This normally involves a one time up-front expense for the conversion of the QuickBooks® file and then a monthly charge going forward, for ReliAscent to help with compliance issues, invoicing, indirect rate calculations and management, creating subsidiary job cost reports, as well as other accounting functions. 

Once the conversion method is selected, work can begin.  The main tasks encountered in a conversion include:

• Restructuring the Chart of Accounts
• Setting up a job cost accounting system
• Setting up a labor distribution system
• Identifying direct costs to final cost objectives
• Identifying and isolating unallowable expenses
• Modified, memorized reports
• Syncing the general ledger system to the timekeeping system, the payroll system, job cost system, the indirect rates system, etc.

3) I have a different general ledger program but  don't think it is compliant?

Sometimes, a small business has a general ledger program already in use when they decide to start accepting work from the Federal Government. This system may be able to be made compliant (ReliAscent^® has worked with several other general ledger systems in the past, making them compliant).  Several steps should be reviewed prior to proceeding with making the accounting system compliant.  This is a partial list of considerations prior to converting the system:

• Does the existing system have enough controls to do the basic GAAP and job cost accounting required by the government?
• Does the company expect to grow the Federal Government contracting in the future - would it make sense to consider changing to an accounting system that is fully compliant "out of the box"?
• What does the company use for timekeeping today? Can this system be compliant?  If so, does it electronically integrate with the general ledger software program?

Many times it may be determined (in this evaluation), that it may be easier to simply convert the system to a QuickBooks®-based system, since this is an already proven system, it's easier to convert, and easier to operate in a compliant manner, due to the vast experience the ReliAscent team has with this type of system.

4) I have a QuickBooks® system that may have been compliant in the past?

The first step would be to review the QuickBooks® system in a cursory fashion to see if it meets the general guidelines of SF1408.  If not, a conversion can be recommended as described above.  If the cursory review looks good, then a more detailed review may be in order to see if the system is compliant.  This is normally done in the form of a Mock audit.  
 

 Contact us to discuss in detail how this might work for you.  Any assistance you request from ReliAscent^® will be an allowable (recoverable) cost under your contract.