Government Contract Accounting Made Easy
by Robert E. Jones
Why a book about government contract accounting?
Because the information in this book can mean the difference between profit and loss, success and failure, on a contract or enterprise level. When clients call with problems, here’s what we find:
Indirect Rate Issues
- Structure doesn’t match operations
- Rates have not been updated in several years
- Incorrect composition of pools or bases
- Mathematical errors
- Rates that are applied incorrectly for bidding and/or billing purposes
Accounting System Inadequacies
- System not designed to meet SF 1408 requirements
- Lack of updated written policies and procedures
- Personnel not following processes
- Missing, disorganized, or otherwise inadequate records and receipts
- Financial statements not prepared in a timely manner
- GAAP compliance failures
Making one change to your rates or process is never as straightforward as it sounds. Changes to the treatment of a cost or the structure of one pool reverberate throughout all of your rates, pricing, and reporting. Failure to follow the changes through the entire process will almost certainly result in underpricing your product or service, which will erode your profit margin, cause cash flow problems, and ultimately, lead to the demise of your organization.
Get the most from this book.
Who should read this book? Share this book with business owners, managers, accountants, CPAs, CFOs, controllers, contract managers and administrators, project managers, contracting officers—anyone with a financial role in a government contracting organization.
How do I use this book? This book is a guide. For the financially minded individuals, you may get some advice and head to the races able to execute with little or no assistance. For the non-accountants, you’ll leave with an awareness of accounting topics and issues that need to be addressed in your organization.
What if I need more help? Contact us today. Don’t hesitate. I guarantee that following the information in this book will lead to greater profitability, streamlined proposals, easier audits, and fewer sleepless nights.
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From the Editor
In 2006, the defense contractor I worked for as a business manager sublet space from another defense contractor. Robert Jones was the Chief Administrative Manager for the other company conducting all the tasks for accounting, contracts, HR, and security. That’s how we met. Robert and I had a lot in common, and we quickly started to team up on contract initiatives and other business issues for both companies.
As Robert’s company grew, he hired me to run contracts and security while he managed HR and accounting. Time passed, and ready for a change of pace and a new city, Robert left the company, and I was asked to assume Robert’s role.
I was unsure about taking Robert’s position as the accountant for a defense contractor. By this time, I knew enough about the job to understand there are a lot of nuances to government contract accounting, and I immediately knew I didn’t know enough. I searched the market for references that would help me understand compliance and practices related to government contract accounting, but I couldn’t find anything. All the options addressed government accounting from the government’s perspective, not as the contractor who is working for the government.
Frustrated, I enlisted the only accountant in our area who understood the government contract accounting requirements. She drew me into a professional contracting organization where I met other like-minded people. Unfortunately, there was still no tome of knowledge for reference, but at least I found solidarity with these contract and accounting professionals. Robert soon joined us at conferences and events, and we continued to share information, develop training, and research the specialty.
Fast forward 15 years, and today, Robert’s Government Contract Accounting Made Easy: The Uncomplicated Guide to Compliance, Pricing, and Profitability is available to you. This is the book I was looking for all those years ago, and it is more relevant today than ever before. In an era of litigation unlike any we’ve seen, the effort necessary to avoid an orange jumpsuit or the suggestion of impropriety is higher than ever. The processes described in this book, which are required for GAAP compliance and DCAA acceptance, are designed to keep business owners and managers out of trouble.
Better yet, following the processes developed by our government, which are intended to provide fair cost sharing with contractors, will also help businesspeople understand their true business costs. I’ve become convinced as I’ve worked in this industry that the process described in this book of generating rates is the only way to achieve a total cost recovery in any business. It is the most valuable business trick I know.
I hope you enjoy this book and consider it an exceptional jewel in your trove of business knowledge. 
-Suzanne Slack Camden