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Don’t Close the Door on Your Accounting

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So, you are a small GovCon, living on a wing and a prayer.  You are bidding on a ton of proposals, winning some work, growing, adding employees, and maybe making a small profit.  When you are small, growing is a grind and it’s fun (thinking this keeps us sane!). Sometimes, you might close your eyes and keep your fingers crossed that your back office, especially accounting, is just running itself. It’s like your teenager’s messy room; you just close the door so you don’t have to look at it.

Trust us, we have seen our fair share of companies who have closed the door on their accounting. Here are just a few of the top examples of accounting mistakes we have seen.  (At least the ones that we can write about.)

  • Bank account balance accounting – Are you running your business on your bank account? Are you thinking “Hey, I’ve got enough money in my checking account to make payroll, all is good”. Short answer: It’s not.  On this system you can’t run your company effectively, pay taxes, be compliant or scale your company, simply by checking the bank account balance.
  • Forgetting to record small transactions – You need a good chart of accounts that is GovCon compliant, with explanations as to what gets recorded where. Then follow it.  All transactions need to be recorded. This includes those monogramed golf balls you thought were a great idea, or the wine tasting that was a “team building activity”.  Don’t be lazy and just enter something as a general journal entry.  Be specific, do the work and your books will look a lot better.
  • Make a budget – It takes time, but it’s a must do. You have a budget for your personal life, right?  Well, maybe not if you are also running your personal life on bank account balance accounting.  You need a corporate budget to plan and track.  Assign budgets for each project/contract as well.  Track funding, track burn rates and learn where you are missing or making the mark.  Do this routinely, we suggest quarterly as well as annually.
  • Doing it all – It’s okay not to know much about accounting. Really, we think you are fabulous and have amazing strengths. But, own the fact that you don’t know accounting and outsource it!  Accounting is not an area where you should use shortcuts or be cheap. Outsource your weaknesses and free up mind space for business development that will help you grow your company.  The risk is too high to find out otherwise.

 

We have all closed doors and tried to ignore things that look scary.  Accounting is just not one of these areas where you can afford to do this. Contact BOOST if your accounting is messy and needs a good clean up.  We can help you clean the room so you can keep the door open!accou

Accounting Keeping You Up At Night?

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It’s the middle of the night, and you are wide awake…from a nightmare about the state of your accounting system. It happens all the time. The accounting system struggle is real for government contractors.  Your accounting system is the backbone of your company.  If your accounting system is in pain, the effects are felt in all areas of your company.  And let’s get real…nobody wants to hear from an employee that their paycheck was incorrect (again) or hear from a customer that an invoice has to be resubmitted because the proper format wasn’t followed.  Never mind the impact on cash flow!

Do you have any clue what is really going on inside your accounting system?

  • Are you panicked, wondering if it is DCAA compliant?
  • Do you have an accurate understanding of your indirect rates? Where do things stand from a cash flow perspective?
  • What about did you fudge on a proposal that your system is DCAA compliant and you have no idea if it is?
  • Are your invoices a nightmare to produce? Are you preparing them manually in excel?
  • Is your timekeeping system cumbersome, clunky or not syncing correctly?
  • Are your managers not approving timesheets when they are supposed to?
  • Is payroll a stressful event that everyone dreads?
  • When is the last time your books were closed?
  • Do you have the financial reporting to guide your company?

It can be difficult to see the big picture of your accounting system when you are in the weeds.  Hence the need for an accounting assessment.  Process improvement is best done by an outside party to evaluate what you currently have in place. GovCons should work with companies that have expertise in govcon accounting (not only for an assessment but for all things accounting).

What can you expect from an accounting assessment?
A good accounting assessment will evaluate:

  • current accounting system (chart of accounts, AR/AP, general ledger)
  • systems information and set-up (timekeeping, payroll, bill pay, expense reimbursement)
  • reporting capabilities (balance sheet, profit/loss, cash flow, income statement, job costing)
  • banking, 401K requirements (what reporting is required, what is being submitted)
  • timekeeping system (project codes, approvals, prime/sub timekeeping)
  • invoices (process, how they are generated, accuracy, timeliness)
  • policies and procedures (what is currently being documented)

An assessment final report should provide you with insight into your current system overview, what can be streamlined for greater efficiency and what is needed for DCAA compliance.  The report should include recommendations for resolving any identified issues.

BOOST can help you with an accounting assessment. This assessment will provide insight into your accounting system, a plan forward for fixing any issues and creating a seamless, fully functional, effective accounting department.  This will give you peace of mind and help you sleep better at night.  Or at the very least, you won’t be able to blame your accounting system for your lack of sleep.