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Top Tips for Choosing an Accounting System

July 27, 2020/in Services /by BOOST

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.

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.

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.
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.
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.

New Accounting System Implementations and Why They Suck

May 26, 2020/in Services /by BOOST

Editor’s Note: This Article Has Been Updated March 03, 2023

At some point, your business will have to implement a new accounting system (if you haven’t already). That’s a good thing because it signifies growth, and growth is one of the goals of any government contracting business. Past the “we need a new system” discussion, things tend to get a bit dicey and there’s no way around it. What do you need to know before you start a new accounting system implementation? We’re glad you asked, read on to learn the points of interest surrounding accounting implementations.

New Accounting System Implementation Questions for GovCons

Implementing an accounting system? The Managed GovCon Accounting Experts at BOOST have compiled our “hit-list” of questions that keep us up at night when it comes to implementing a new accounting system. As usual, we’ll provide you with things to expect and how to better manage those expectations for a semi-smooth transition to a new accounting system implementation.

Should you DIY (do it yourself) when it comes to implementing a new accounting system?
Absolutely not, and here’s why. The main reason for needing a new system is that the company’s leadership is already spending too much time in the weeds outside of their current accounting system. Adding the task list of a transition and implementation on top of an already full plate will only cause stress and mistakes. When it comes to your accounting systems, we are trying to minimize mistakes.
Will you hit your desired deadline for implementation?
Deadlines are nice, but they are really just guidelines, right? In all seriousness, when you realize you need a new accounting system implementation, you’re probably three months behind. Any accounting system implementation team will do their absolute best to implement a new system close to the desired deadline, but discrepancies with current data or gaps within the current process may come to the surface. Additionally, there may be cultural resistance to change (yes this is a thing). Deadlines will be extended; the goal is a system that works for all users with accurate and consistent reporting. To cut down on this time, work to clean the data in your old system before beginning a new accounting system implementation. You want a clean slate, not a system full of errors at the get-go.
Who needs to be involved in a successful new accounting system implementation?
You’re not going to like this, but someone from your team needs to have a finger on the implementation process. We’re talking FTE time in the amount of ¼ – ½ of their hours during implementation. They need to be well-versed in the new system in order to train users, have process knowledge of the business specifically to configure the system appropriately, and to communicate effectively the needs of the business with the implementation leader. The individual needs to be a change champion to help others in your organization embrace the change and learning a new system. Above all else, the team from both sides, needs to be made up of those who are really good listeners and communicators.
Do you need a fully customizable solution for your new accounting system?
Again, this one is a big no. It is much easier to transition a system instead of changing a business’ culture, and how you manage your accounting is a big part of your culture. You want a system that you can take off the shelf and minimally configure (i.e. posting rules, chart of accounts, how key fields are populated and utilized) versus redesigning and customizing from the ground up. If you find that you’re trying to customize each option, report, and configuration, you may want to check out a different solution option (more on this in an upcoming blog).

The very bottom line to all of this is that if you’ve outgrown your current GovCon accounting system, you need a dedicated and integrated team to help manage the new accounting system implementation. Do your homework, ask the experts (us), and begin your transition well ahead of your “must-have” date. While these new accounting system implementations are no walk in the park, the end result should provide you with better visibility, more time back in your day, and the ability to grow as your company grows.

For more information about changing accounting systems, read our GovCon checklist. Need help with your accounting system implementation? Contact us today.

What is SF1408 and Why You Need to be Compliant

March 30, 2020/in GovCon, Services /by BOOST

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.

DCAA Audit Compliance, Part II

February 19, 2020/in Services /by BOOST

Updated 02/10/2023

(As promised, here’s the Part II to “DCAA Trends in 2020“)

We’re preparing to make a bold statement that is practically blasphemy in our industry and especially with what BOOST does.

Care less about DCAA audit compliance and more about financial acumen.

There. We said it. Here’s what we mean and our rationale:

As we learned in the seminar briefing from DCAA earlier, small GovCons between $5-$50M have a 5% chance of being audited on your incurred cost submission. Smaller GovCons (under $5M) have ½ of 1% chance. In general, if you submit the paperwork on time (ICS, forward pricing), you aren’t getting audited. Especially if you are going after prime work that is T&M or FFP (which most people are).

So why do we hit people over the head with “you must be DCAA compliant” time and time again? Why do we scare off non-traditional companies who may consider playing in the federal space? We hit them over the head with FAR compliance and cite it as a reason to drive a ton of changes.

Here is what we think is more important:

Profitability
Are you in the green and have long-term positive net cashflow? This is all your banker cares about. Are you a safe bet to lend money to? If you aren’t making money, why are you in business? (Note to reader: this is our completely biased view that you should run companies to make money. None of this “operate in business for years without a profit to show for it.” Not very Silicon Valley of us, but hey, we’re capitalist!).
Competent Financials
Does your balance sheet balance? No seriously…this is a thing! Does your P&L look reasonable and is it prepared in a logical manner? Are you using accrual basis accounting? Did your 18-year-old nephew/neighbor/spouse do your QuickBooks setup without any understanding of the federal market, almost certainly forgetting to install the add-ons that will make it DCAA audit compliant?
Job Cost Accounting
Do you know your gross margin and profitability by project/customer? Do you know and track your indirect rates?
Pre-award Surveys (i.e. 1408’s)
This is way more important in our mind. Can you pass the audit to win the work? To lose revenue or new opportunities simply because you don’t have your financials in order absolutely blows our mind. Do you know how hard it is to win work as a prime? Good grief, do not lose it on a technicality!

We view the above as the floor in terms of expectations. If you can’t pull it together, you are dead in the water. We’ve seen companies go out of business as they didn’t manage their wrap rates or their profitability. This market is uber competitive and if you can’t win from a cost perspective, you will never grow.

Now that we’ve effectively scared the pants off of you (and if we didn’t it had better be because you are doing all of the above, and more) we can provide you with a solution. You guessed it, BOOST! Our DCAA compliance consulting and accounting experts have years of experience keeping all of the ducks in a row. If you’re worried about DCAA audit compliance, or are wondering if it’s time for DCAA compliance consulting, visit us at www.BOOSTLLC.net/consultation/ and let’s get the important things in order.