Skip to content
GovConPayMay 19 20215 min read

Why DCAA-Approved Accounting Systems Help GovCons Stay Compliant

Maintaining DCAA compliance is one of the biggest challenges government contractors face. Many companies still struggle to find the right software to ensure compliance while fulfilling key accounting needs. This often leads to delays, errors, failed audits, and missed deadlines.

DCAA-approved accounting systems are designed with government contractors' needs in mind. Besides keeping the company compliant with federal laws, the system helps it prepare for potential audits and streamline work efficiency.

Let's take a closer look at what DCAA-approved accounting systems are all about.

What Are DCAA-Approved Accounting Systems?

One of the main prerequisites of working with the government is using an adequate accounting system.

The demands for these systems may vary depending on the type of contract. However, if the company considers different contract types, it needs to work with DCAA-compliant tools.

The most popular DCAA-compliant accounting systems government contractors work with are:

  • Unanet — A native integrated cloud-based ERP (Enterprise Resource Planning) solution that helps manage financials, expenses, people, and projects. It has a robust support system and a formidable knowledge base for clients.
  • Deltek — A project-based ERP solution that offers project accounting, resource management, project management, time/expense management, and business development options. It's one of the most trusted ERP solutions in the GovCon sector.
  • Jamis — A powerful cloud-based project ERP solution that handles crucial GovCon activities, including document management, accounting, invoice tracking, and more.
  • Aspire — A comprehensive cloud and project-based accounting, financial management, and collaboration solution designed specifically for growing contractors.

Any software that deals with financial aspects of government contracting must be DCAA compliant. Even if you manage to win a contract without using compliant systems, their absence can cause issues down the road. The main benefits of using DCAA-compliant tools include:

  • Passing pre-contract audits — one of the first things the government checks when considering a partner is the adequacy of its accounting system. By keeping it DCAA compliant, you increase your chances of winning a contract.
  • Passing post-contract audits — indirect rate audits, incurred costs audits, voucher audits, etc. are part of a successful relationship with the government. Implementing a DCAA-compliant accounting system can help you pass these audits with flying colors.
  • Maintaining efficient operation — GovCon accounting differs from regular accounting significantly. Trying to manage it without a comprehensive system can be problematic. Many companies struggle to juggle several programs at once, thus facing delays and errors. A DCAA-compliant system can help you support an efficient work process.

The key benefit of using a high-quality DCAA-compliant accounting system is maintaining peace of mind. Passing audits and keeping up with all accounting nuances is much easier with a robust accounting tool in your arsenal.

How DCAA-Approved Accounting Systems Simplify Compliance

The main goal of an accounting system is to help the company manage finances. Besides doing that, DCAA-approved tools simplify compliance by:

1. Segregating Direct and Indirect Costs

Understanding the differences between direct and indirect costs in the GovCon sector is the first step toward compliance. Keeping them separate in regular accounting software can be tricky, especially for emerging government contractors.

DCAA-compliant systems give you an option to segregate direct and indirect costs.

Besides staying compliant, getting indirect costs right is important because they form the foundation for your indirect rates.

2. Identifying and Segregating Unallowable Costs

Both new and experienced government contractors often struggle with identifying unallowable costs. These costs don't meet the authorized criteria under the contract terms in FAR 31. So they are excluded from any bills and proposals related to the contract.

If you include these costs into bills, claims, or proposals by mistakes, you could face penalties. DCAA-compliant accounting systems allow you to identify and segregate unallowable costs to avoid penalties and maintain a good reputation.

3. Total Time Accounting

The DCAA has strict requirements for timekeeping. Contractors that perform labor-hour, time-and-material, or cost-reimbursable contracts must have a timekeeping system that accurately reports total time worked. Otherwise, you may end up underbilling the government client and decimating your revenue.

A DCAA-compliant accounting system helps you record and report working hours properly, thus generating the right amount of revenue.

4. Maintaining Security Standards Aligned With the DoD

According to DFARS Clause 252.204-7012, DoD (Department of Defense) contractors need to ensure adequate security to protect covered defense information that travels through the internal unclassified information systems.

Any software carries a risk of a cybersecurity breach. By choosing a DCAA-compliant accounting system, you minimize the risk of exposing sensitive information. This can help you avoid serious penalties, maintain a good reputation, and win other DoD contracts in the future.

DAA-Compliant ERP & HCM Integration

Automating accounting tasks is on the agenda of any government contractor. However, many of them try to work with several software solutions at once. As a result, they end up spending too much time on manual data entering and error correction.

High-quality DCAA-compliant accounting software has a variety of integration options. By choosing a system that allows simple integration with other tools, it's possible to minimize manual work, increase employee satisfaction, and maximize efficiency.

GovConPay the first GovCon software designed specifically to integrate with key ERP partners like Deltek, Aspire, Jamis, and Unanet.

By combining our efforts, we create a comprehensive HCM and ERP ecosystem, helping government contractors gain a top-botch HR and payroll partner while enjoying all the benefits of DCAA-complaint ERP software.

Working With a DCAA-Approved Accounting System

A DCAA-compliant accounting system can help you manage the financial aspects of the contract without worrying about government-specific accounting nuances. These systems allow you to stay DCAA compliant and always be prepared for audits.

By choosing an HR and payroll partner that unifies the experience with your DCAA-compliant accounting tools, you streamline your company's operations and support a stellar reputation.

The 21st century DCAA-compliant systems are designed to simplify your work while satisfying federal requirements. Working without one in a DCAA-compliant environment is nearly impossible.

GovConPay and isolved technology allow you to maximize the benefits of your DCAA-compliant ERP systems while providing a variety of useful HR and payroll features for government contractors. For more information, please contact us at any convenient time.