DCAA Approved Accounting System (Requirements, Types of Audits, Best Software)

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DCAA Approved Accounting System

The DCAA is a government organization that audits government contractors to ensure they follow the rules and regulations for accounting and costing.

Government contractors often find themselves in need of an accounting system that the DCAA approves. However, this approval can be challenging, as the DCAA has specific requirements for what constitutes an approved system.

In this blog post, we will look at the requirements for a DCAA approved accounting system and how you can get your system approved. The post will also provide a list of DCAA approved accounting systems.

What is DCAA Approved Accounting System?

DCAA approved accounting system is an accounting system that meets the standards set by the Defense Contract Audit Agency. To be approved by the DCAA, an accounting system must meet specific requirements.

These requirements are outlined in the Federal Acquisition Regulation (FAR) and Cost Accounting Standards (CAS). So what is the purpose of a DCAA Approved Accounting System?

A DCAA approved accounting system aims to ensure that government contractors follow the rules and regulations for accounting and costing.

The DCAA has specific requirements for what constitutes an approved system, and contractors often need an accounting system that the DCAA authorizes.

What are the requirements for a DCAA approved accounting system?

There are twelve requirements (we can call it twelve key elements also) for a DCAA approved accounting system.

12 Requirements for a DCAA Approved Accounting System
  1. The system must comply with Generally Accepted Accounting Principles (GAAP).
  2. It must be able to segregate the direct and indirect costs.
  3. It must accumulate contract costs by cost project and cost elements.
  4. It must have a general ledger that should control contract costs.
  5. It must maintain homogeneous indirect cost pools.
  6. It must have pre-contract cost accounting.
  7. It must have a timekeeping system that captures employee hours worked by the project.
  8. It must generate labor distribution reports based on the timekeeping system.
  9. It must be able to segregate indirect and direct cost pools from unallowable costs.
  10. It must make an interim accumulation of costs in account books at least once a month.
  11. It must track costs by contract line item.
  12. It must provide accurate historical accounting data.

Types of DCAA Audits

The DCAA performs various types of audits.

The three main types of DCAA audits are pre-award, post-award, and compliance.

Pre-Award Audit

The pre-award audit is an audit that is conducted before a contract is awarded. The pre-award audit ensures that the contractor complies with the FAR and CAS.

Post-Award Audit

The post-award audit is an audit that is conducted after a contract is awarded. The post-award audit aims to ensure that the contractor is performing under the contract terms.

Compliance Audit

The compliance audit is an audit that is conducted to ensure that the contractor complies with the FAR and CAS. The compliance audit may be performed at any time during the contract’s life.

How to get the accounting system approved by the DCAA?

To get a DCAA-approved accounting system, you can follow these steps:

Understand the DCAA requirements

The DCAA has a number of requirements for accounting systems, which are outlined in the Defense Contract Audit Agency (DCAA) Accounting System Requirements (ASR). The ASR is available on the DCAA website.

Choose the right accounting software

Several accounting software packages are designed to meet the DCAA requirements. While choosing an accounting software package, it is important to ensure it can generate the reports that the DCAA requires.

Implement the accounting software and configure it to meet the DCAA requirements

Once you have chosen an accounting software package, you must implement and configure it to meet the DCAA requirements. This may require you to make changes to your accounting procedures and controls.

Document your accounting system and procedures

The DCAA requires that you have documentation of your accounting system and procedures. This documentation should include a description of your accounting system, your accounting procedures, and your internal controls.

Make sure accounting system gets audited by a DCAA-approved auditor

Once you have documented your accounting system and procedures, you need to have your accounting system audited by a DCAA-approved auditor.

The auditor will assess your accounting system to determine whether it meets the DCAA requirements.

Submit your accounting system to the DCAA for approval

Once your accounting system has been audited and approved by a DCAA-approved auditor, you can submit it to the DCAA for approval. The DCAA will review your accounting system and determine whether it meets its requirements.

More Tips : To get your accounting system approved by the DCAA, you must submit a request for a proposal (RFP) to the DCAA. The RFP must include a description of your accounting system and how it meets the requirements for a DCAA-approved system.

The DCAA will review your RFP and determine whether or not your accounting system is compliant with the FAR and CAS.

If your system is found to be obedient, the DCAA will issue you a Certificate of Compliance. This Certificate of Compliance will allow you to bid on and perform government contracts.

List of DCAA approved accounting system software

1. QuickBooks

QuickBooks is a popular, easy-to-use accounting system that can be used for businesses of all sizes.

It is approved by the DCAA and meets all requirements for an approved accounting system. It is suitable for companies like new businesses, small and mid-size businesses, and freelancers.

Webpage of Quickbooks

Features

  • Manage bills
  • Track income and expenses
  • Invoice customers
  • Reports
  • Maximize tax deductions

Screenshots of QuickBooks

QuickBooks Homepage
Homepage
QuickBooks Dashboard
Dashboard
QuickBooks Banking
Banking

Pricing

It offers four types of pricing plans and free trial for 30 days.

  • Simple start – $30 per month
  • Essentials – $60 per month
  • Plus – $90 per month
  • Advanced – $200 per month

Currently it is offering 50% off for 3 months. Hence the pricings are as follows.

  • Simple start – $15 per month
  • Essentials – $30 per month
  • Plus – $45 per month
  • Advanced – $100 per month
Pricing Of Quickbooks
Free Trial Pricing of Quickbooks

Other details

DeploymentCloud, SaaS, Web-Based
Supported deviceMac, Windows, Android, iPhone, iPad
Supported languagesEnglish
SupportEmail/Help Desk, FAQs/Forum, Knowledge Base, Phone Support, 24/7 (Live Rep), Chat
TrainingLive Online, Webinars, Documentation, Videos
Customer ratingsCapterra: 4.3 out of 5 (5931+ reviews), G2: 4.0 out of 5 (2979+reviews)

Likes

  • The software simplifies all accounting tasks.
  • It is widely used by businesses of all sizes, provides accurate data reporting, and integrates with other platforms and software.
  • Easily set up and send invoices to customers, and manage payments and receipts.
  • The interface is well-designed and easy to use, which helps to learn and use the various features quickly.

Dislikes

  • This software is little expansive.
  • Customer service is not good.
  • Despite its versatility, the platform may not allow some users to fully customize certain features to their specific needs.

User opinion

With its comprehensive software for accounting, payroll, and more, it has become an essential tool in powering operations. Their guidance and support have been invaluable in navigating the complexities of financial management, ensuring that you are compliant and well-prepared when it comes to taxes.

The user-friendly interface and intuitive workflows of QuickBooks have made it easy to manage finances efficiently.

From invoicing and expense tracking to payroll management, QuickBooks offers a range of features that streamline day-to-day operations. The real-time insights provided by QuickBooks have been instrumental in making informed financial decisions.

2. Accounting Seed

Accounting Seed is a DCAA approved accounting system that offers a variety of features to help businesses manage their finances. It is easy to use and suitable for companies of all sizes.

Webpage of AccountingSeed

Features

  • Financial dashboards and reports
  • General ledger
  • Project accounting
  • Tax accounting
  • Order management

Pricing

Accounting Seed financial software offers different package options to fit your needs. It is comprehensive and will help you grow, work more efficiently, and improve collaboration. The plans are as follows.

  • Essential
  • Professional
  • Premier
Pricing of AccountingSeed

Supported industries

  • Automotive
  • Construction and Maintenance
  • Education
  • Energy and Utilities
  • Financial services

Other details

DeploymentCloud, SaaS, Web-Based
Supported languagesEnglish
SupportEmail/Help Desk, FAQs/Forum, Knowledge Base, Phone Support
TrainingWebinars, Documentation, Videos
Customer ratingsCapterra: 4.3 out of 5 (91+ reviews)

Likes

  • It provides customizable options to meet specific needs.
  • Invoice creation is easy and secure, even you can send them to clients from anywhere.
  • The platform is straightforward to use and effective.
  • It is easy to integrate and automate data sourcing.
  • Easily connects to banks and other financial institutions
  • This software is scalable and flexible
  • The system is easy to use and displays transactions in a clear and concise way, making them easy to understand.

User opinion

Accounting Seed is a reliable and efficient accounting solution for businesses. The ability to tailor the system to your unique requirements, coupled with their global support and Salesforce integration, make your financial management processes much smoother and more streamlined. 

The user-friendly interface and intuitive workflows of Accounting Seed make it easy to adapt to the new system.

The robust reporting capabilities and real-time insights will empower to make informed decisions and gain a deeper understanding of financials.

3. Deltek Costpoint

Deltek Costpoint is a government-approved accounting system that many businesses use to manage their finances.

It offers a variety of features that can help companies keep track of their spending, invoicing, and other essential data. However, a company’s accounting system must meet specific requirements to be approved by the DCAA.

Webpage of Deltekcostpoint

Features

  • Maintain compliance and security regulations
  • Complete visibility into projects and finances
  • Automate time and expense management 
  • Improve cashflow & operational efficiency 

Screenshots of Deltek Costpoint

Delteck Accounting
Accounting
Delteck Identification
Identification

Pricing

The vendor does not disclose pricing details. Instead, you need to get a quote by filling out a form on their website.

Supported industries

  • Accounting and CPA
  • Architecture and Engineering
  • Consulting
  • Government and Contracting
  • Aerospace and Defense
  • Energy, Oil, and Gas

Other details

DeploymentCloud, SaaS, Web-Based
Supported deviceMac, Windows, Android, iPhone, iPad
Supported languagesGerman, English, French, Dutch
Support24/7 (Live Rep), Chat
TrainingIn-Person, Live Online, Webinars, Documentation
Customer ratingsCapterra: 4.0 out of 5 (203+ reviews), G2: 4.0 out of 5 (203+ reviews)

User opinion

It has significantly reduced the complexity of government accounting by consolidating project management, financials, and compliance into one powerful platform.

Costpoint’s ability to centralize the management of projects, people, finances, and compliance is truly game-changing.

It provides a comprehensive solution that enables to efficiently deliver on contracts and meet the stringent requirements of DCAA compliance.

Deltek Costpoint is an indispensable tool for any government contractor looking to streamline their project accounting processes and meet compliance requirements.

4. WrkPlan

WrkPlan is the perfect solution for businesses that need to track employee time and attendance. The web-based software is accessible from anywhere with an internet connection.

In addition, WrkPlan integrates with QuickBooks, making it easy to keep track of your finances. The software also complies with the DCAA requirements for an approved accounting system.

Webpage of WrkPlan

Features

  • Government contract management
  • Project billing and accounting
  • Incurred cost submission
  • Time and expenses

Screenshots of Wrkplan

Workplan Indirect Rate Category
Indirect rate category
Workplan Indirect Details
Indirect details

Pricing

The vendor does not provide the pricing details. To get pricing details, you need to contact the vendor directly.

Other details

DeploymentCloud, SaaS, Web-Based

User opinion

Wrkplan is essential for ensuring DCAA compliance and streamlining operations. With fully integrated project accounting, contracts management, and timesheets, WrkPlan eliminates the hassle of juggling multiple systems and spreadsheets.

It serves as a central hub for all business needs, providing real-time insights and reports to make informed decisions.

5. PROCAS

Procas is a leading software solution for government contractors. It is approved by the DCAA and meets all of their requirements for an accounting system.

Webpage of Procas

Features

  • Accounting 
  • Timekeeping 
  • Expense Reporting 
  • Management Report
  • Web API For Business Intelligence Systems

Screenshots of Procas

Procas Accounting
Accounting
Procas Timekeeping
Timekeeping

Pricing

Pricing details are not publicly available. You need to contact the vendor to get details.

Other details

DeploymentCloud, SaaS, Web-Based
SupportPhone Support
TrainingLive Online, Webinars, Documentation, Videos
Customer ratingsCapterra: 4.8 out of 5 (6+reviews), G2: 4.2 out of 5 (3+reviews)

Likes

  • User-friendly interface

Dislikes

  • Issues in reporting.
  • Lacks of standardization of report generation procedures across modules.
  • Completing an expense report can be challenging due to the lack of clear instructions.

User opinion

It simplifies the business processes and allows to focus on what matters most – delivering exceptional projects to clients. The integration of accounting, timekeeping, expense reporting, and project management all in one platform has truly streamlined operations.

It is an indispensable tool for growing government contracting businesses. It simplifies business processes, increases productivity, and provides the tools that you need to succeed.

FAQs

What is the DCAA, and what does it do?

The DCAA is the Defense Contract Audit Agency, a government organization that audits government contractors to ensure they follow the rules and regulations for accounting and costing. As a result, contractors often find themselves in need of an accounting system that the DCAA approves.

What is DCAA Compliance?

DCAAs Compliance Program evaluates contractor performance to ensure that contractors meet their contracts’ requirements and applicable Federal Regulations. DCAA also provides education and guidance to contractors on how to comply with the regulations. So DCAA compliance means ensuring you follow the rules when performing a government contract.

What are the consequences of not having a DCAA Approved Accounting System?

The consequences of not having a DCAA approved accounting system can be significant. The most obvious impact is that you may not be able to get paid for your work on the contract.
The DCAA has specific requirements for what constitutes an approved system, and if your system does not meet these requirements, the DCAA may find that you are not in compliance with the contract. That could lead to fines, penalties, or even being banned from working on future government contracts.

Conclusion

The DCAA Approved Accounting System is critical software for businesses that contract with the government. However, the requirements and process to gain approval can be daunting.

The DCAA has specific requirements for what constitutes an approved accounting system. In this blog post, we’ve outlined those requirements and provided information on how to get your accounting system approved by the DCAA. We hope this helped you understand the platform!

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