Doing business with the government is one sure way of attracting more clients in the non-government sector as well. This is primary because all government contracts are handed out only after the hawk body the DCAA carries out it's compliance audit to ensure that the contractors are honest and that the taxpayer's money will be well-spent. The compliance is obligatory in doing any business with the government and being able to meet with it gives the contractor the competitive edge above the others in the industry. It helps in delineating that the company has standards that mark it's willingness to excel and not just succeed.
The new regulations
The rules of the DCAA compliance have changed significantly in the last decade, and there is no longer the grading system that allows a contractor to be “inadequate in part.” It now has a clear pass-fail system that will not entail them to be the government contractors even if they disqualify in parts. Neither will it any longer provide the suggestions as to how the inadequate parts can be rectified by installing the systems that will yield the compliance status.
Sanctions for compliance failure
There are severe costs that are attached to the failure of meeting the dcaa compliance that may mark the company out as one as unworthy that in turn will result in further loss of business rather than gaining them. Also, there can be civil or even criminal sanctions imposed by the body on the company that can result in the shutting down of business altogether. It absolutely crucial to enter the government contract market only after being able to meet the stipulated standards.
Taking professional help
For this, it is essential that a company understands what the major requirements of the DCAA audit are. There are three main areas that the DCAA audit concentrates on, and they are the fixed price, the cost reimbursable and the time and material costs that include the all overhead costs that are recorded. There are seasoned professionals that have worked several years with the DCAA and are aware of all the present changes. These professionals offer their help to companies in preparing the precise systems that are compliant with the stipulated standards.
Preparing the documents ahead
Time keeping and recording of expenses long before the audit starts is one of the best ways to meet the audit standards. There have to be an meticulous recording of the hours of labor involved that are to be duly signed by the higher authorities for them to be accepted as both manual as well as electronic systems are accepted. There are also the specific accounting requirements that are different from the ordinary accounting standards required by the DCAA. The submission of the Incurred Cost direct and indirect call for the FAR clause 52 that the professionals can help out with effectively.
Adam has 35 years experience IN DCAA and handling DCAA Compliance .