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DCAA Timekeeping Requirements

October 7, 2022/in Advice, GovCon /by admin

The key to a successful DCAA floor check audit is an accurate and up-to-date timekeeping system. This includes the DCAA Pre-Award survey, which must be completed before you can be awarded a cost reimbursement contract. The survey assesses whether your accounting system can accurately track costs in accordance with contract terms. If you fail the survey, you will not be able to receive the contract.

Maintaining Job Code and labor category segregation compliance is crucial to passing any DCAA Pre-Award survey, and your timekeeping records are how you show that. In other words, proper timekeeping is essential to stay compliant with government regulations, avoid financial penalties, and improve your project’s bottom line. Below, we’ll present the regulations that will keep you in compliance.

Basic DCAA Timekeeping Requirements for GovCons

There are some basic rules and requirements for timekeeping as set by the DCAA. The rules themselves aren’t all that complicated or convoluted, but there are a number of them and it can be easy to lose track of whether or not you’re following them.

Here’s the basic list:

You must charge every hour worked exactly to the corresponding charge code.
Every day, every employee is responsible for logging their own time within the system. A manager cannot record an employee’s time unless the employee is unable to do so themselves (for example, if they are out sick or traveling for work).
Employees can’t log their time before the job or task is actually performed.
Each employee is only given one timecard or timesheet per work period. Most timekeeping is electronic, not paper.
All time changes must be made in ink or in digital format and include the following: description of change, reason for change, initial time of change, and date/time of corrected change.
Employees and their supervisors must each sign off on all timesheets in order to ensure their accuracy.
For labor distribution reasons, timesheet records must include the employee’s name and both hours and minutes worked. Monthly labor distribution should be reconciled, making it critical to establish job codes in the tracking system.

It’s a good idea to keep a checklist of these basic rules and to regularly go through it and ensure that you’re in compliance. Messing up your timesheets can cause a massive headache in the case of a DCAA audit, including fines and disqualification from future contracts.

If You’re Not Using Electronic Timekeeping, Here Are Some Tips

Most GovCons are using electronic timekeeping systems these days, and those have their own set of additional rules. If you’re not yet transitioned to electronic timekeeping, here are some general rules for compliance.

Luckily, most of these rules are common sense and probably already covered by your timekeeping system, but it’s always good to double and triple check to be sure. Again, failing a DCAA audit because of timekeeping can be expensive on multiple levels.

Here are the rules for electronic timekeeping systems:

To deter potential hacking, each employee must have a unique password which changes every six months.
To prevent any accidental or unauthorized changes, employees are accountable for their timesheets and must keep control of them at all times.
Employees are not permitted to work for hours that have not yet been compensated under the terms of the aforementioned legislation. They must track their hours on a daily basis, but they are not to do so in advance.
A contractor’s system needs to have an audit trail function that documents all changes including the following:
- Dates
- Time Changes
- Employees
- Project Numbers and Charge Codes
- Project/Timesheet Approvals
- Time-Stamped Submissions
- Correction Changes

BOOST Can Help You Stay Compliant

At BOOST, keeping government contractors compliant is a big part of what we do. We understand the unique challenges and complexities that small and mid-size government contracting businesses face, and we have the experience and knowledge to help you stay within the bounds of regulations so that you don’t get hit with any nasty surprises during a DCAA audit.

Contact us today to learn more about how we can help your GovCon business succeed with accurate and compliant accounting.

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.

BOOST Accounting

September 6, 2019/in Videos /by BOOST

Connect with BOOST to discuss how we can help with your accounting initiatives. [email protected]

Accounting Keeping You Up At Night?

March 13, 2019/in Services /by BOOST

It’s the middle of the night, and you are wide awake…from a nightmare about the state of your GovCon 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.