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Don’t Close the Door on Your Accounting

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

5 Pricing Tips for the New Year

As we enter a new calendar year, we begin the madness of sharpening our budgets and pipelines.  Some of the focus ends up being on managing expenses and headcount, as it should, but often some quick and easy planning can help you to optimize your pricing strategy for the next year.

To get you started, here are five pricing tips for the new year:

  1. Contract Labor Bill Rate Review
    Have you had any staff turnover on your firm fixed price or time and materials contracts? If so, you may be able to capture some labor efficiencies by “greening” those positions and/or consolidating functions under higher bill rate positions. BONUS TIP: This is especially helpful if the contract is up for a re-competition and you’re the incumbent.
  2. Cost-Plus Contracts
    If your Cost-Plus contract is coming up for a re-compete, review all of the direct labor rates, and examine them against market rates (such as a survey or government rate data such as Bureau of Labor Statistics).  Bid market rates, NOT current employee rates.
  3. Subcontract Review
    Are there opportunities to bring in new subcontractors of the same quality/scope, but with better rates? This might be dependent on teaming agreements and workshare commitments. If the contract allows it, develop an active strategy around subcontractor selection and rates every year.
  4. Overhead & Infrastructure Review
    Facilities – this is a big one. Are there opportunities to renew different types of leases/facilities?  You may want to explore the trend of shared/co-working spaces. This solution can provide a lot of cost efficiencies if your contract/company policy allows it. Telecom expenses are also a major player. There are a multitude of new options that minimize the telecom costs for entire companies through third-party vendors and resellers, or cost sharing with other companies. Do your homework and save your company money in the long run.
  5. Beef Up Your Back Office Support
    Can you outsource major functions such as accounting, HR, recruiting, contracts? Believe it or not, this is becoming a good option for many mid-tier contractors. Use this opportunity to get lean without sacrificing quality and compliance standards.

The tips above are not a one-and-done type of deal. You should be reviewing internally each year as you plan operations and execution of contracts for the new year.  While much of this is common sense, seldom is it applied to affect pricing strategy/updates.  Use this information to bid sharper and smarter than your competitors and get the edge in pricing!

The Gift of Expertise

Ever feel like you have no clue how to solve a problem or that there has to be an answer out there, you just don’t know it?  Do you google randomly trying to figure it out, only to not be satisfied with the results?  Or (if you are like me), do you just want someone to freaking deal with it and tell you what to do in this circumstance?  Do you feel like you know it’s important, but there are a ton of things that you’d rather be doing or should focus on?

As you plan for 2019, be thinking about what expertise you need in the new year.  What will help move your business forward and, more importantly, grow your profit?  What is worthy of your time and what isn’t?  When do you play it safe with an outside opinion?  (answer:  Anything with a ton of money on the line or employee issues – call the expert!).

Here’s a short list of items that folks waste time on by doing it themselves instead of calling an expert to save a ton of time and in the right circumstances, a ton of money:

  • Affirmative Action Plans
  • Taxes
  • GSA Schedules
  • Employee handbooks
  • Policies and Procedures (to start)
  • CMMI/ISO certification
  • Office Space/Office Moves
  • FAR Compliance
  • Proposal Price/Cost Volume development and Analysis
  • Indirect Rates development and Analysis
  • Strategic Pricing/Price to Win Analysis
  • M&A (when you don’t have a shop of your own)
  • Website development
  • Complex IT Challenges
  • Bookkeeping
  • Graphic Design
  • Payroll

This holiday season, give yourself the gift of getting crap off your plate.  Budget for using an expert in one or more of these areas next year.  Reclaim your time!

If you need a referral or recommendation to anyone providing these services, just give us a shout.