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 to obtain, 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.
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?
The purpose of a DCAA approved accounting system is to ensure that government contractors are following the rules and regulations for accounting and costing. The DCAA has specific requirements for what constitutes an approved system, and contractors often find themselves in need of 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.
- The system must comply with Generally Accepted Accounting Principles (GAAP).
- It must be able to segregate the direct and indirect costs.
- It must be able to accumulate contract costs by cost project and cost elements.
- It must have a general ledger that should control contract costs.
- It must maintain homogeneous indirect cost pools.
- It must have pre-contract cost accounting.
- It must have a timekeeping system that captures employee hours worked by the project.
- It must generate labor distribution reports based on the timekeeping system.
- It must be able to segregate indirect and direct cost pools from unallowable costs.
- It must make an interim accumulation of costs in account books at least once a month.
- It must track costs by contract line item.
- 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.
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.
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.
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 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
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.
- Manage bills
- Track income and expenses
- Invoice customers
- Maximize tax deductions
It offers four types of pricing plans
- Simple start – It starts at $12.5 per month
- Essentials – It starts at $25 per month
- Plus – It starts at $40 per month
- Advanced – It starts at $90 per month
AccountingSeed 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.
- Financial dashboards and reports
- General ledger
- Project accounting
- Tax accounting
- Order management
The vendor does not disclose the pricing details. To get details, you need to fill out a form on its website and send a request.
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.
- Maintain compliance and security regulations
- Complete visibility into projects and finances
- Automate time & Expense management
- Improve cashflow & operational efficiency
The vendor does not disclose pricing details. Instead, you need to get a quote by filling out a form on their website.
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.
- Government contract management
- Project billing and accounting
- Incurred cost submission
- Time and expenses
The vendor does not provide the pricing details. To get pricing details, you need to contact the vendor directly.
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.
- Expense Reporting
- Management Report
- Web API For Business Intelligence System
Pricing details are not publicly available. You need to contact the vendor to get details.
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.
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 helps clear things up!