Moving up as a federal contractor requires meeting additional compliance standards, particularly those that ensure timely and precise accounting. QuickBooks does offer functionality to manage many government contracts, but there are hidden cost burdens in staff expertise, potential compliance issues, and the risk and time for data migration to another platform once the company matures.

In general, properly allocating indirect costs is usually done in excel outside of QB. See AtWork blog on this topic.

Is QuickBooks Putting You at Risk of Adverse Audit Findings?

Although QuickBooks offers limited support for cost-based contracts, a bolt-on feature such as GovBooks can improve the ability to derive indirect rates, compare actuals against performance, and derive data needed for an incurred cost submission. This might get you by for a while, but moving into Prime contracting and multi-million-dollar award wins is another story.

Alternatively, choosing a hardier GovCon Accounting platform such as Unanet, Costpoint, and Jamis early on, or prior to pursuing large contracts, can be a better value in the long run.

Knowing when to move on is often the key to growth and profitability. It also ensures that your business practices meet standards set by DCAA and DCMA, and qualify under operational standards like CMMI and ISO, all which open new contract opportunities.
Here are factors that drive your accounting platform decisions as you plan your Growth Strategy:
QuickBooks, though user-friendly and suitable for fixed-price contracts, may put you at a competitive disadvantage.

• Does not handle complex accounting processes required by complicated contracts
•  Cannot support integrated project and contract management as effectively as other solutions
• Prevents automated connection to integral platforms, such as payroll, HR information systems, benefits/retirement
• Lacks automated precision/foresight and scenario development for the impact of indirect rates on profitability, cash flow, and proposal pricing.
• Cannot provide adequate support and DCAA compliance and government audits
• Often unable to transfer all your historical data to new platform, leading to manual data entry
• May have lower financial investment up front, but identify the added manual processes to remain compliant and other costs when analyzing overall value

If you are pursuing flexibly-priced contracts (time and material and cost-plus), you should consider upgrading to more potent systems.

When considering implementation of a new accounting system, leave yourself at least 6 months before expecting full use of the new platform, as you must accommodate:
A final consideration: when implementing a new accounting system, leave yourself at least 6 months before expecting full use of the new platform, as you must accommodate:

• choice of a platform and implementer
•  cleansing data from the current system for smooth transition
• development or upgrade of accounting manual and policies
• training of direct and indirect staff on the new architecture
• interacting with teaming partners and the client clients on the impact of usage

Ultimately, the choice of accounting platform dovetails closely with strategy. Companies committed to growth and shareholder value will benefit from the enhanced accounting investment.

Our advice
Behave like a larger company, adapting the rigor as would a mid-tier GovCon. This requires more discipline; additional staff and outsourced rate management will ultimately pay off.