Ways a Business Ensure DCAA Compliance

1. Ways a Business Ensure DCAA Compliance The DCAA is a great starting point for figuring out what an audit includes. It has a treasure trove of useful resources, and amongst them are presentations focusing on small contractors. For instance, the Accounting Systems Requirements presentation defines conditions for acceptable systems in accounting, labor, and timekeeping. Once you have an understanding of what DCAA accounting involves, it’s a good idea to see the next processes. Evaluating your accounting system One of the most important DCAA compliance indicators is an accounting system that adheres to the Generally Accepted Accounting Principles, which specify how financial transactions should be accounted for, calculated, and recorded. Some broad compliance indicators include: Costs are tracked as direct, indirect, or unallowable expenses. Direct costs are identified and followed by the contract. Cost pools for indirect costs are maintained, with expenses assigned to them in a consistent and logical manner. Indirect costs are assigned reasonably based on advantages accrued to the contract.

2. Unallowable costs accounting need not be done because they are not billed. Examining your labor system for DCAA compliance Of course, an accounting system can only deliver accurate costs if the underlying labor information is right. There are extensive rules that control labor and timekeeping systems. In terms of timekeeping, employee hours should be documented electronically documented or on paper. A labor distribution system following the DCAA requirements charges direct and indirect labor to appropriate contracts. Examining your monitoring and review practices for DCAA compliance Finally, an important sign of DCAA compliance that’s sometimes overlooked is related to monitoring. Established procedures, policies, and practices must be backed up by regular management reviews to make sure they’re adhered to. Accumulated expenses should also be monitored habitually against contract prices or costs. Sync Data between Timekeeping and Accounting Software Almost all electronic timekeeping systems allow you to seamlessly sync data between your accounting and timekeeping software so that you can stay organized and link relevant information together. Of course, there are also accounting systems that contain timekeeping systems. However, if you do use a distinct electronic timekeeping system, then synchronization with your accounting software is imperative.