ERPGovCloud: Your Path to DCAA Compliance

So you won your first Government Contract… Congratulations! 

Among the new issues you will need to consider, your accounting systems, both practices and technology, will need to pass muster with Defense Contract Audit Agency (DCAA) auditors. This will require a combination of internal processes and controls. Your accounting system will need to properly delineate direct and indirect costs, must properly pool indirect costs, and must properly handle unallowable costs.

It’s likely that you are currently using Quickbooks, the dominant player in small and medium enterprise (SME) accounting. You may need a new software solution. We have seen estimates that Quickbooks’ Chart of Accounts can be restructured to make DCAA compliance possible in about a week. However, you will also need to add a DCAA compliant Time Sheet system, and will probably need to add a third party reporting system like Qqube or similar, then invest the time to create the detailed reports you want for internal analysis, as well as the invoicing and other forms you will need to submit to the agency for which you are work. If you are successful, you will have created a custom, band-aid type system with multiple vendors, which creates complexity, increasing training costs, and the likelihood of errors. Consistent with the rest of the market, Intuit is making a hard sell of both users and ProAdvisors toward Quickbooks Online – but their own internal training ProAdvisor training resources advise that using QBO for time billing is not a good fit. QBO does not handle inventory well, either, which has spawned multiple inventory add-ons for QBO.

Instead of trying to take Quickbooks Desktop where it was never designed to go, consider a fully integrated accounting, timesheet, contract management, expense management, purchasing, CRM, and Human Resource system. If your company has the I.T. resources including the required database server capacity and licenses, self-hosting may be an option. For a lot of small to medium businesses who can’t or choose not to shoulder those infrastructure expenses, accounting software that runs against a cloud database is the best solution. Ideally, though, look for the option to switch from one deployment model to the other- that kind of agility will benefit your business. ERPGovCloud meets all the functional requirements listed above, including timesheet entry for employees and/or subcontractors, ADP and Paychex export, multiple pay classes per employee, and generation of complete government invoice packages, including forms 1034 and 1035. 

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