December books closed ✔
Payroll tax returns filed (940/941/944) ✔
W-2s distributed ✔
1099s delivered ✔
Incurred Cost Proposal…in Process…?
You might not consider preparing for the Incurred Cost Proposal (ICP) during all of your other year-end tasks. You might think, “I’ve got 5 more months to worry about that.” Now is the best time to prepare and worry. Why? Most importantly, all of the information is fresh. If you wait until May or June to start the ICP process, you’ll have the worries from the first half of 2016 clogging your brain. It’s much easier to find and fix problems now. As time passes, people change and memories fade. Trying to figure out what happened 12 months ago is difficult enough. Why wait and try to figure out what happened 17 months ago?
If you closed December books, your financial statements are complete and your trial balance is accurate. You need financial statements and the TB for Schedules B, C, and G. Your payroll tax returns are needed for Schedule L. Job cost ledgers are used for Schedule H, and invoicing-to-date reports are used for Schedule K. See, you’re ICP is already halfway complete!
One piece of information contractors overlook is a contract brief. These are not only required for the ICP, but are a best practice for your contract and financial management processes. Contract briefs give the reader a quick summary of important details without rifling through a stack of documents. The more of these data items you incorporate in your accounting or contract management software, the easier your data extraction process. For example, marking each customer order/job/project (aka contract) with the appropriate contract type and prime contract number means you can easily run revenue and cost reports by contract type and prime contract.
We help clients with preparation of the Incurred Cost Proposal and developing and implementing systems to improve all reporting processes. Call today!