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Build Loyalty Within Your Company

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Cultivating a sense of loyalty amongst your employees is one of the most important things to be doing right now. We say right now because there’s a global talent shortage that’s hitting companies everywhere, GovCons not excluded. So retaining your people is more of a priority than ever.

But there are other reasons you want the loyalty of your employees.  People who are emotionally invested in their work tend to do it better. They also go above and beyond when the company needs them to.

Essentially, you want your people to want to come to work each day, or as close as you can get to that.

Below, we’re going to talk about some ways that your government contracting company can work to build loyalty within your organization.

Your Company Culture Is the Foundation of Loyalty

The first step to building loyalty is ensuring that your company culture is one that people want to be a part of.

Your company culture should reflect the values that you hold as an organization. It should also be a place where people feel like they can be themselves, and where they feel supported by their colleagues.

If your company culture is strong, your employees will be more likely to feel a sense of loyalty to the organization.

Make sure that you’re regularly communicating your company’s values to your employees, and that you’re living those values in the way that you operate.

And it’s true that there’s a stigma about government contractors not having much of a culture. Of course we know that’s not the truth of things, but there’s no denying that the perception is there. Be the GovCon to change that perception. Keep things interesting, and keep your people invested.

Give Your People What They Want

True, you might be investing a lot into your employees, but are you really giving them what they want?

Your employees want to be challenged at work, and they want their accomplishments to be acknowledged by their bosses and their peers. They want to feel like they’re learning and growing in their roles. They also want to have a good work/life balance and feel like their job is flexible enough to accommodate the rest of their life.

You’d be surprised how many government contractor companies are throwing benefits and perks at their employees without accomplishing those things. Could be that your company is doing just that and you don’t even know it. For example, maybe you’re buying lunch for everybody twice a month from Joe’s Big Beef Shack while being totally unaware of the fact that a third of your employees are vegetarian.

So the question now is how do you go about finding out what your employees really want? It’s actually very easy. You ask them. Or, more specifically, you work with your HR department to find a way to ask them.

Once you know what it is that your employees really want, you can start working on providing it to them.

Foster Pride in Your Mission

When it comes down to it, government contractors are working for the people of the United States.  That’s a pretty big deal, and it should be something that your employees are proud of.

Make sure that you’re constantly communicating the mission of the company to your employees, and make sure that they understand how their work contributes to that mission.

You can do this by sharing stories about how your company has helped achieve success on a project, or by sharing articles or blog posts about the work that you’re doing.

When your employees feel proud of their work, they’ll be more likely to feel loyalty to the company.

We Can Help You With Recruiting and Retention

At BOOST, we help government contractors by providing an array of back-office services. Whether your company is looking to recruit the best candidates, or you need to keep the people you have, we’re the right team for the job. Contact Us today, and let’s talk about how we can assist.

Mid-Year Accounting for GovCons, What You Need to Know!

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Editor’s Note: This Article Has Been Updated On 7/5/2023

Table of Contents

  1. Introduction
  2. Budgeting and Forecasting
  3. Pipeline
  4. Pricing
  5. Accounts Receivables
  6. Accounts Payables
  7. Vendor Analysis
  8. 1099 Preparation
  9. Indirect Rate Monitoring
  10. Salary, Wages & Bonuses
  11. Policies and Procedures / Handbooks
  12. Tax Strategy
  13. Legal Entity Reevaluation
  14. Key Takeaways
  15. About BOOST’s CEO, Stephanie Alexander

It is mid-year planning time, and our GovCon Accounting Team would love to share with you a few items that should be on your radar. We are here to help you succeed, and we are committed to Quality, Proactiveness, and Communication.

Let’s jump right in!

  1. Budgeting and Forecasting – Budgeting and Forecasting are very important to track projected gains or losses. A few items to think about: Are you forecasting quarterly? If not, you should! Ensuring full visibility on how your projections are going against actuals is extremely important for stability and planning for growth. Additionally, if your 2021 budget is not trending upward as expected, you need to know why, and what is causing the variance. For 2022 budgets, August and September are the perfect months to start planning before the end of the year rolls around and you are scrambling to get one set up.
  2. Pipeline – Planning for growth requires a lot of effort, specifically creating a healthy pipeline. Make sure you keep on top of your projections as well as your winning strategy. Review your pipeline no less than bi-weekly. What changes are needed to ensure success? Do you have the right partnerships/subcontractors? Are there any events occurring that would put you in the game? Are you marketing to the right people? Do you have the right credentials needed to win more work?
  3. Pricing – This is a big one. When was the last time you reviewed your pricing? Are you competitive enough? If you do not feel comfortable with your pricing, now is the time to take action. In the GovCon space, you cannot afford to be asleep on the wheel. Taking a proactive approach to monitoring your pricing and making adjustments is a must.
  4. Accounts Receivables – Cash is KING! How is your AR trending? Do you have a lot of uncollected cash sitting in your 60-90 days of aging? It is imperative that you review your AR monthly, and if in a cash crunch, review it weekly. Keep on top of sending collections reminders and make it very easy for your clients to make payments, whether that be offering ACH options or a 3rd party service like bill.com. Bottom line is to make it extremely easy for them to pay.  Additionally, do you have amazing clients that pay promptly? If so, and if your company can afford it, offer an incentive or discount for prompt payments! Relationship building is key to the success of your business.
  5. Accounts Payables – On the contrary, are you paying your vendors extremely fast? Are you seeing your AP aging is less than 30 days? It is important to know how these quick-pay behaviors impact your cash. It is ideal to keep vendor agreements to 30-45 days, and only priority vendors as less than 30 or pay upon receipt. It is a great time to review your vendor payment terms and renegotiate if needed.
  6. Vendor Analysis – How long has it been since you last negotiated payment terms with your vendors? When was the last time you looked at your priority vendors to ensure a mitigation plan is in place should such vendors cease to exist? When was the last time you rated your vendors’ performance, quality, and services? This is the perfect time to put thought and energy into these pieces!
  7. 1099 Preparation – Do you have W9s for all qualified vendors? 1099 submission deadline is right around the corner (end of the year) and taking a proactive approach to ensure you have all W9s would ensure compliance. If you find you don’t have W9s, reach out to your vendors now and give them plenty of time to reply with one. Create a folder to keep track of them, or make sure to upload them to your GovCon accounting system. Additionally, you should have them marked as 1099 in your system for reporting the total value paid. If you have paid a vendor more than $600, they will need a 1099 from you. Other considerations should be taken into account, however, it’s best practice to ask for one from all your vendors and keep records of such requests. Any vendor not complying, make sure to note that too.
  8. Indirect Rate Monitoring – When was the last time you looked at your actual monthly indirect rates and compared them to your company’s provisional billing rates? How are you trending? Have you had material change and need to submit a revised incurred cost submission? All things to consider before the end of the year.
  9. Salary, Wages & Bonuses – Have you heard of “The Great Resignation”? This is the time to review your employee’s performance bonuses, wages, and payouts. Are you competitive enough for the current job market? If not, this is the time to do a quick check for end-of-the-year bonuses and raises! How is your benefits plan matching up to your employees’ expectations? Do you need to set up a 401K matching program? Reach out to your HR representative to ensure the best benefits package is being offered, and if not, what changes are necessary? Cost-benefit analysis is key here to ensure your return on investment (ROI) is worth it.
  10. Policies and Procedures / Handbooks – Your Accounting Policies and Procedures manual should be up to date, however, if not, this is the perfect time to review and make sure it is. Do you have segregation of duties? Are you in compliance with all GovCon regulations; how about GAAP? Is it documented? What is your capitalization policy? Additionally, do you have a corporate handbook that you need to revise? This is the time to make sure all your ducks are in a row and it’s well documented. Policies for HR, IT, Accounting, et all need to be in place.
  11. Tax Strategy – Have you had mid-year tax planning with your CPA? If not, this is your friendly reminder to reach out to them ASAP! Are you making estimated quarterly payments? Are you trending for a high net income and need to plan for additional expenses before year-end? Do you have any capital expenditures on hold that need to be re-evaluated? Lastly, have you made sure your 2020 tax filings have been processed and submitted due to an extension? Any changes in equity? Mergers and Acquisitions are also a hot topic this time of the year – valuations are well underway.
  12. Legal Entity Re-evaluation – Make sure that the business structure you have is the right one for your legal needs. If you are not sure, reach out to your Tax CPA and ask! Additionally, make sure you know the legal implications of any changes should you decide to make one. Do not forget, that an unfortunate event can occur at any time, and you need to be prepared. Make sure you have a succession plan and or a trust set up if anything should happen to you or a business partner!

While we are positive that we provided you a lot to chew on, BOOST also has the SMEs to back it up. If you’d rather have a conversation to dive deeper into any or all of these pieces, reach out to our accounting for GovCons team at [email protected]. We’re ready to help get your books locked and loaded for your next phase of growth.

  • Key Takeaways

  • Budgeting and Forecasting: Regular forecasting, ideally quarterly, is crucial for tracking projected gains or losses. It’s important to understand any variances in your budget and plan for the next year’s budget in advance.
  • Pipeline: Creating a healthy pipeline is essential for growth. Regularly review your projections and winning strategy, ensuring you have the right partnerships and marketing strategies in place.
  • Pricing: Regularly review your pricing to ensure competitiveness. In the GovCon space, proactive monitoring and adjustments are necessary. If you need assistance, there are pricing services for GovCons readily available.
  • Accounts Receivables: Cash flow is vital. Regularly review your Accounts Receivables, especially any uncollected cash in your 60-90 days of aging. Make it easy for clients to make payments and consider incentives for prompt payments.
  • Accounts Payables: Paying vendors too quickly can impact your cash flow. Aim to keep vendor agreements to 30-45 days and review your vendor payment terms regularly.
  • Vendor Analysis: Regularly negotiate payment terms with your vendors and ensure a mitigation plan is in place for priority vendors. Rate your vendors’ performance, quality, and services.
  • 1099 Preparation: Ensure compliance by having W9s for all qualified vendors. Be proactive in collecting these and keep track of them in your accounting system.
  • Indirect Rate Monitoring: Regularly compare your actual monthly indirect rates to your company’s provisional billing rates. Be aware of any material changes that may require a revised incurred cost submission.
  • Salary, Wages & Bonuses: Stay competitive in the current job market by reviewing your employees’ performance bonuses, wages, and payouts. Consider end-of-the-year bonuses and raises, and ensure your benefits package meets employees’ expectations.
  • Policies and Procedures / Handbooks: Keep your Accounting Policies and Procedures manual up to date. Ensure compliance with all GovCon regulations and GAAP.
  • Tax Strategy: Engage in mid-year tax planning with your CPA. Make estimated quarterly payments and plan for additional expenses if you’re trending for a high net income.
  • Legal Entity Re-evaluation: Ensure your business structure meets your legal needs. Be prepared for any unfortunate events with a succession plan or trust.
  • Remember, accounting for GovCons involves a lot of moving parts, and it’s essential to stay proactive and organized. If you need help, don’t hesitate to reach out to professionals.

About BOOST’s CEO, Stephanie Alexander

Stephanie Alexander has spent more decades than she wants to admit supporting high growth government contractors with an eye towards their bottom line. She is the CEO and founder of BOOST LLC which supports back-office functions for government contractors. She is a co-founder and Partner at govmates, a free teaming platform and technology scouting tool to connect business across the federal landscape.

 

Incurred Cost Submissions: DIY or Do It Well?

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Editor’s Note: This Article Has Been Updated June 14, 2023

Table of Contents:

  1. Introduction
  2. Incurred Cost Submission Must-Knows
  3. The DIY Approach
  4. How To Do It Well
  5. BOOST’s Services
  6. Key Takeaways
  7. About BOOST’s CEO, Stephanie Alexander

While Tax Season may be the bell of the ball for the average American, in the GovCon space the real sweetheart is the Incurred Cost Submission. The question on our client’s minds is: Can you DIY the ICS with some turbo-tax-type setup, or does it need to be carefully placed into the hands of a professional? Keeping that in mind, let’s discuss:  

Incurred Cost Submission Must-Knows 

Filing Deadline: Your incurred cost submission (ICS) must be filed 6 months after the close of your fiscal year. For many, that’s June 30th. Though that may seem far from today, the amount of QA (which we’ll get to shortly) necessary to facilitate and close this filing leaves little wiggle room.  

Schedule H Detail: Providing minimal detail or justification for costs isn’t going to cut it here. We typically say that with the government, ignorance isn’t an excuse, and with your incurred cost submission (ICS) that holds true. You’ll need to provide adequate reasoning for the costs as they pertain to each line item on your submission.  

Running Reports Isn’t Enough: The running of the report is step one in the process. From there you’ll need to match and checkpoint contact, accounting, and contract data (to include task order changes) to ensure that everything matches and balances. This is where the bulk of your time will be spent, and it is also why we harp on having your processes, filing, and organization in place for future needs.  

The DIY Approach 

If you’re planning to DIY (Do-ICS-Yourself) you’ll need to begin gathering your data ASAP. Is it possible to DIY the ICS? Absolutely. Do you have the dedicated time and attention to get it right? That’s up to you. When it comes to the mathematically minded let’s put this to a quick equation:  

Your Time Per Week  

Contract and Client Deliverable Time + ICS Prep Time + BD Time 

If we’re looking at a negative number, or one that robs you of sleep, DIY may not be your best bet. If you’re set on the DIY method here are some of the things you’ll need to remember:  

• Know the DCAA Workbook (ICE) and Requirements well (No, this isn’t an optional filing)
• Match schedules to unlinked data
• Categorize for Schedule H
• Include and complete all mandatory schedules
• Include appropriate wage accounts
• All Policy Documents Readily available (Accounting Policies, Bonus Policy, Labor & Timekeeping, etc.)
• Have direct access to task orders and contracts, and correct figures for all schedules
• Run your report
• Set aside time to double and triple check the data outputs
• Check the DCAA Adequate Checklist

How To Do It Well 

If the DIY method looks too overwhelming, we have a suggestion. This should come as no surprise, but you may want to pass the ball to an outsourced option that can help you to prepare for submitting your report. An outsourced team will have fresh eyes to compile, prepare, and check your submission prior to crunch time. The goal here is to provide your incurred cost submission (ICS) in a way that the DCAA will deem it “adequate” AND low risk to avoid an audit. While most preparation services cannot guarantee these ratings and future audit avoidance, having your DCAA ducks in a row will definitely give you an educated leg up in the pool.  

BOOST can help prepare your Incurred Cost Submissions with a keen eye for detail and reporting. If you’d like to learn more about our GovCon accounting services, schedule a chat here.  

Key Takeaways:

  • Incurred Cost Submission (ICS) Must-Knows: The ICS must be filed 6 months after the close of your fiscal year. It requires detailed justification for costs pertaining to each line item. Simply running reports is not enough; you need to match and checkpoint contact, accounting, and contract data to ensure everything matches and balances.
  • The DIY Approach: It’s possible to handle the ICS yourself, but it requires dedicated time and attention. Key steps include understanding the DCAA Workbook and requirements, matching schedules to unlinked data, categorizing for Schedule H, including and completing all mandatory schedules, having all policy documents readily available, having direct access to task orders and contracts, running your report, and setting aside time to double and triple check the data outputs.
  • How To Do It Well: If the DIY method seems overwhelming, outsourcing may be a better option. An outsourced team can compile, prepare, and check your submission prior to the deadline. While they can’t guarantee a DCAA rating of “adequate” and future audit avoidance, having your DCAA ducks in a row will give you an educated advantage.
  • BOOST’s Services: BOOST can help prepare your Incurred Cost Submissions with a keen eye for detail and reporting. They offer back office services for GovCons that can help you prepare for submitting your report.

About BOOST’s CEO, Stephanie Alexander

Stephanie Alexander has spent more decades than she wants to admit supporting high growth government contractors with an eye towards their bottom line. She is the CEO and founder of BOOST LLC which supports back-office functions for government contractors. She is a co-founder and Partner at govmates, a free teaming platform and technology scouting tool to connect businesses across the federal landscape.

Top Tips for Choosing an Accounting System

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As we discussed previously, accounting implementations are like dentist visits (sorry dental friends), necessary but definitely not fun. Yet, before we get to the implementation part, we have to go through the process of system selection; identifying and choosing the best system for your business.

We’ve compiled what we consider to be the top tips for choosing your new system. With these tips, accounting systems should be easier to decipher, understand, and implement for your business.

  1. Have a team to evaluate your options.
    The minimum number of systems you should be evaluating for implementation is three. We’ll say that again: Evaluate a minimum of three systems (but probably no more than 5) to find the best fit for your company when choosing an accounting system. This means you will need a team of people from your company who understand your business processes and the nuances of your business needs to take part in the evaluation. The key stakeholders in the decision to implement a new system are:

    • Executive Leadership
    • Accountants
    • Project Managers
    • IT Admin (hosting/software)

Including people from all of these stakeholder categories will ensure that (hopefully) all needs are met when choosing a new system.

  1. Choose an End-to-End system.
    Your accounting system, once implemented, should provide you with visibility, clear reporting, and above all more time spent on BD and other tasks instead of transaction processing. The reasons you’re moving away from your previous systems are typically due to the lack of visibility, lack of streamlined processes, failure to be contract compliant, and increased transaction volume. These are not issues you want to bring with you to the new system. We’re looking to ease tensions, reduce integration points, and gain efficiencies through automation of end-to-end transactions. Since efficiency is the name of the game, the question of how to choose an accounting system is made much easier by reducing the pool of candidates. Pick an end-to-end system.
  2. The user experience should be intuitive.
    End users of the system should be able to navigate within the system without intense training. It should be configured with automated controls that reduce the need for redundancies that manual controls create. While each system has its own way of doing things, for the most part users should feel that the processes they’re using fall in line with their current routines versus creating something completely new. The ease of use and ease of transition should be a top concern when choosing an accounting system.
  3. Choose a system you can configure.
    The best system is one that you can take directly off the shelf and implement with minimal configuration. You’re not looking to redesign or customize a system to fit each piece of your business. Rather, you need something that will fit into the slot and fill the needs that were identified within your previous system. The name of the game here is plug-and-play for the most part. If you’re finding that during your discovery phase, the questions you’re asking are how to change, manipulate, or redesign the system or the system provides solutions for less than 80% of your business, that system probably isn’t the one for you. If you’ve got all the stakeholders together in making this decision, choosing an accounting system should be much easier, assuming they’re comfortable enough to voice their concerns and changes they would like to make to prospective systems.

Above all, your accounting system should work with and alongside you. In an ideal world, it will be able to grow with you for a time as well. Choosing a new system should not be taken lightly and if your executive and accounting teams need guidance through this process, we would be happy to assist. We’ve got years of experience in managed GovCon accounting, and the implementation of new systems is something we specialize in.

At BOOST, we thrive in helping clients to identify needs, find solutions, and get more time out of the system and back into the billable day. Find more information regarding this digital event and register here. If you’re ready to find a new system now, contact our Managed Accounting Experts here.

Navigating Complexities | The CARES Act and 3610 Guidance for the Intelligence Community

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Updated 03/10/2023

Guidance for the Intelligence Community is always changing. Yet currently those changes seem to be in hyper-drive. Luckily, we have experts like Amy Hernandez at BOOST LLC and partners like Pete Ragone from the SC&H Group to help us navigate these waters.

In an information-packed hour-long virtual discussion, Amy and Pete walked attendees through the top questions (and answers) they’ve received regarding this spring’s pressing changes as they pertain to the Intelligence Community. Below, you’ll find some of what they discussed. For the full discussion, please visit the webinar replay here.

Where do we stand in regard to PPP/Tax Credits vs. Class Deviation 3610?
Questions and dilemmas abound. Amy & Pete advised clients in the intel space that they may be able to invoice regarding lost time. Many contractors wanted to apply both the PPP Loan and the Class Deviation 3610. Yet, the CARES Act did not fill the gap of March 13th-March 27th (as of May 28th) when many contractors were suddenly not able to work at their assigned location in support of Government programs.  Unfortunately, you are unable to invoice under 3610 and take the PPP loan or tax credit. It’s one or the other. If you take the tax credit or PPP, you won’t get reimbursement under CARES Act 3610. But stay tuned, this could be modified as updated guidance related to the CARES Act is released in the coming weeks. This is a key point to note, as it’s in your best interest to only apply for the one that will give higher returns, whether it be the tax credit and PPP or the CARES Act section 3610.


What key guidance has come out relating to CARES Act 3610?
Key guidance posted on May 18th includes an overarching implementation guidance and checklist (with instructions). The guidance references that contractors can be reimbursed at their bill rates, which include profit. However, companies have to certify costs without profit for reimbursement.  When seeking reimbursement, contractors are effectively having to disclose profit to the government and primes. Those without cost-plus contracts may not have fully-FAR-31-compliant cost accounting systems (which best practice says you should). In the long run, this may change the landscape for the IC in billing and proposals going forward due to the fact that 3610 is only reimbursing costs for 2020. The worry is that in the next option year negotiations may be adversely affected, given that companies invoicing under 3610 have now informed customers/primes what their profit is on individual labor rates.

What are the cost accounting implications of invoicing under CARES Act 3610?
If you’re having to track costs by contract, you need to make sure you have a separate time charge/leave code for COVID Leave or however you’re tracking work changes due to the pandemic. Most banks are sending PPP funds to a separate account, to assist with tracking as everything needs to be specifically tagged in regard to these funds. If you’re able to invoice under 3610, leave recorded as fringe costs do not stay as fringe, they need to be reclassified as direct labor once invoiced. We repeat, once you invoice it is no longer fringe, but a direct cost under that contract. Those costs can only be billed under that contract, by FAR definition it becomes a direct cost. When calculating your indirect cost rates, ensure that COVID costs invoiced under CARES Act 3610 are removed from the fringe pool. (Check out the video for some of the more in-the-weeds, guidance for your chart of accounts.)

What are potential future contracting implications once things return to “normal”?
Depending on the funding of certain programs, there may be more limited additional 3610 availability. They will be funded but increases to contract funding will need to be priced out and supported. Short term, the government will continue with current spending habits as the debt ceiling raises. In the long term, there may be some tightening of funding on the horizon. Be prepared for a higher likelihood of justification for pricing going forward. To prepare, document, document, document. This exercise requires businesses to have elements of a compliant accounting system. In fairness, you should always have a compliant accounting system, but if CARES Act 3610 is what it takes to get you into gear, it’s for the best to make this change anyway.

Action Items:

  • Have a good, clean accounting system.
  • Determine your financial health by contract and your business as a whole when deciding which funding/opportunities to take.

If you find yourself looking for additional guidance on CARES Act 3610, a resource for implementing compliant accounting systems, or other questions regarding the most up-to-date released guidance, let’s connect. Our BOOST experts can get the information you need or connect you with our smart partners, like Pete, who have a breadth of knowledge in these areas.

SF1408, What is it? Why is it important for you?

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Letters, numbers, acronyms, and more. It’s like a GovCon fairytale minus the lions, tigers, and bears. Oh my!
Today we’re discussing SF1408. What is it and why is it something you should be familiar with?

A 1408 assessment is the Pre-Award Accounting System Survey (SF1408).  The Accounting System Survey is sometimes referred to as a “pre-award audit” and it is necessary for the award of any Cost Type contract, meaning you must successfully complete the SF1408 before a government contract is awarded.

A few points to note:

• This comes BEFORE the contract award.
Imagine losing a bid because you didn’t have your act together in your financials! If you can’t get your SF1408 in order before the contract is started, how can they trust your credibility in managed GovCon accounting?

• This is not an audit.
They (DCAA) focus on your accounting system’s ability to be compliant if you were to receive the award.  SF1408 is simply a review to determine if your system is set up and operating in accordance with the criteria on page 2 of Standard Form 1408. This is far more focused on your accounting system itself than the strategic pricing involved in winning the contract.

• This is where policies and procedures rule (Here’s a tip: an accounting system is not just the software being utilized).
To be compliant with SF1408, DCAA is looking for you to document what your system does – think the segregation of indirect vs. direct costs and unallowables (our favorite); how are costs captured and classified?; how and where do you charge your time?

If you plan on priming this year on a Cost Type contract or are awarded a cost-type subcontract (looking at you DOD peeps!), make sure you are prepared for the SF1408 with documented policies and a compliant accounting system.

Note that this SF1408 version is different than an Accounting System Audit!  An audit of your accounting system is much more in-depth and includes tests of internal controls (e.g., segregation of duties, etc.).  Know what you need when you read through the RFP.  If you have a question, ask the COR during the Q&A time – the difference between the SF1408 and an accounting audit is huge!

Do you still have questions or want to discuss this as it pertains to your business specifically? Contact us here.

Introducing BOOST LLC

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BOOST was founded to support GovCons as they get to the next level. After reinventing the wheel many times and banging our heads against numerous walls, we have learned what works and what doesn’t. We love working with executives who want to see their organization grow and who value advice from those who have “been there, done that.” We want our small clients to outgrow us. We want our large clients to use us when they need us and then call us back for the next project. We want you to sell your business for the multiplier you want. We want you to be successful.

www.boostllc.net

Why You Can’t Afford to Close the Door on GovCon Accounting

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Editor’s Note: This site was updated on 12/27/2022

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 GovCon accounting. Here are just a few of the top examples of GovCon 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 monogrammed 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.  GovCon 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