Accounting Systems
A DCAA-compliant accounting system, built to be audited.
There is no DCAA certification you can buy. There is only a system an auditor examines and finds adequate. We build systems designed for that examination, in QuickBooks or Deltek Costpoint.
- 12 years inside DCAA
- 100+ DoD contractors audited
- CPA led
- QuickBooks, Costpoint, SAP & NetSuite
- Remote, nationwide
What “DCAA compliant” actually means
DCAA does not certify or approve software. No product is compliant out of the box, and any vendor telling you otherwise is selling you something. What DCAA evaluates is whether your accounting system, as you have configured and documented it, can accumulate and report cost the way federal contracting requires.
The criteria come primarily from DFARS 252.242-7006, Accounting System Administration, and from the pre-award checklist in Standard Form 1408. Together they describe a system that segregates direct from indirect cost, accumulates cost by contract and by task, identifies and excludes unallowable cost, tracks labor by the day it was worked, and produces the reports a contracting officer needs to pay you.
Most small contractors already own software capable of this. What they are missing is the configuration, the written procedures, and the internal controls that turn software into a system. That gap is what we close.
What we build
A compliant system is a set of connected pieces. Missing any one of them is enough to draw a finding.
Chart of accounts and cost structure
A chart of accounts that segregates direct cost, indirect cost pools, and unallowable cost as distinct account ranges rather than as a reporting afterthought. Job and task structure that maps to your contracts and CLINs.
Indirect pools and allocation bases
Fringe, overhead, and G&A pools with defensible allocation bases, structured so that rates are both competitive in pricing and supportable in audit.
Timekeeping and labor distribution
A compliant timekeeping process with daily entry, documented corrections, and supervisor approval, plus the labor distribution that carries those hours into job cost.
Unallowable cost identification
Screening built into the account structure so FAR 31.205 unallowables are segregated as they are incurred, not hunted for at year end.
Billing and revenue processes
Public voucher preparation, provisional rate application, and contract ceiling and funding monitoring so you bill correctly and get paid on time.
Written policies and procedures
The documentation an auditor will ask for on day one. Accounting manual, timekeeping policy, and internal control narratives, written to be handed over rather than reconstructed under pressure.
A common misconception
Is there DCAA approved accounting software?
No. DCAA does not approve, certify or endorse any accounting software, and no product can be bought that makes you compliant. We say this plainly because the phrase “DCAA approved accounting system” appears in solicitations and on vendor websites often enough that people go looking for a product to buy.
What actually gets evaluated is your system, meaning the software plus the chart of accounts, the pools and bases, the timekeeping, the written procedures and the way all of it is run every month. An auditor forms an opinion on that, and a contracting officer decides whether it is acceptable. The software is one component and never the deciding one.
The practical consequence: two companies on identical QuickBooks subscriptions can get opposite answers. One segregated direct and indirect cost, set up job costing by contract, runs timesheets that reconcile to payroll and keeps unallowable costs out of the pools. The other installed the same product and changed nothing.
“DCAA compliant accounting software”
There is no such thing as a certified product, but some packages make compliance easier than others. QuickBooks works for most small contractors once it is configured properly. Costpoint and Unanet are built for this work and cost accordingly. What matters is whether the configuration produces contract cost, indirect rates and a labor distribution that tie to the general ledger.
“DCAA approved accounting system”
The approval, when it exists, attaches to your company and that contract, not to a product. A pre-award survey on Standard Form 1408 says the system is acceptable for award. A post-award review says it has been operating acceptably. Neither is a certificate you keep on a shelf, and both can be revisited.
“DCAA accounting” as a service
What most people mean when they search this is someone who will set the system up and then run it, so the books stay auditable without them thinking about it. That is what we do, and it is priced on the pricing page rather than quoted after a discovery call.
If you want to know where your own system stands before anyone looks at it, the SF 1408 readiness self-check takes about three minutes and tells you which criteria would get flagged.
How the engagement runs
System assessment
We evaluate your current setup against the DFARS criteria and the SF 1408 checklist, and give you a written findings memo identifying every gap and its severity.
Design
We design the chart of accounts, pool structure, and job architecture around your actual contract mix, not a generic template.
Build and migrate
We configure the system, restructure historical data where it is needed for comparability, and reconcile the result.
Document and train
We write the policies and procedures and train the people who will operate the system daily, because an undocumented system fails audit even when the numbers are right.
Ongoing operation
Optionally we run it: monthly close, rate monitoring, billing, and the annual submissions.
Questions
Frequently asked
Can QuickBooks be DCAA compliant?
Yes, for most small and mid-size contractors. QuickBooks Online and Desktop can both be configured to segregate cost properly and support job cost reporting. The usual limits are timekeeping, which generally needs a compliant companion system, and very complex multi-pool rate structures. We will tell you honestly if your structure has outgrown it.
Do we need Deltek Costpoint?
Not usually, and not early. Costpoint is powerful and purpose-built, but it carries real cost and administrative burden. It makes sense at higher contract volume, with multiple segments, or under full CAS coverage. We work in both and have no incentive to sell you software.
How long does an implementation take?
A straightforward QuickBooks build for a small contractor typically runs a few weeks. A pre-award deadline can compress that considerably, and a Costpoint implementation or a mid-year restructure takes longer. Timeline depends most on how clean your existing data is.
Will DCAA approve our system before we bid?
A pre-award survey evaluates whether the system is designed to accumulate cost properly. It does not require operating history, which is why a young company with a well-built system can pass comfortably. See our page on the SF 1408 pre-award survey.
What happens if we already failed a review?
A finding is normally correctable. We work from the actual audit report, address each deficiency specifically, document the corrective action, and prepare you for the follow-up review.
More
Related services
DCAA compliant accounting software: what actually exists
No product is DCAA approved. What gets evaluated instead, and what QuickBooks, Unanet and Costpoint each solve.
How to choose a CPA firm for government contracting
The six questions to ask, what disqualifies a firm, what it should cost, and when you don’t need a specialist.
How much does DCAA compliant accounting cost?
Published numbers for the system build, the monthly work and the incurred cost submission, plus what moves the price.
How to calculate indirect rates for a small business
Fringe, overhead and G&A with a worked example for a ten-person firm, and what must come out of the pool first.
How to bill a cost-plus contract
What goes on the voucher, how indirect cost reaches the invoice, what gets withheld, and why vouchers come back.
We just won a cost-plus contract. Now what?
The three things that must be true before your first invoice, the first 30 days, and the two clauses that catch people.
Your accountant can’t do government contract compliance
Changing firms mid-contract: the order of operations, what to collect before you give notice, and when a split beats a switch.
SBIR Phase II accounting system requirements
A cost-plus Phase II needs an acceptable accounting system before award. Without one you are offered fixed price, and you carry the cost risk.
SF 1408 pre-award surveys
Get your accounting system judged adequate so you can accept a cost-type award.
Incurred cost submissions
Adequate ICE submissions filed on time, with schedules that reconcile the first time.
Indirect cost rate structures
Pool design, allocation bases, provisional billing rates, and the annual true-up.
Contract pricing & proposal support
Cost volumes and basis of estimate for FFP, cost-reimbursable, and T&M solicitations.
Government audit support
Preparation and representation for DCAA and DCMA audits and buying command cost analysis.
Forward pricing rates (FPRP & FPRA)
Forward pricing rate proposals and agreements so every future bid prices faster and with less argument.
CAS Disclosure Statements
Form CASB DS-1 preparation, cost impact analysis, and disclosed practice compliance.
Post-award & business system reviews
DFARS 252.242-7006 reviews, material weaknesses, payment withholding, and corrective action.
Terminations, REAs & claims
Termination settlement proposals and requests for equitable adjustment. Frequently underclaimed.
Find out where your system actually stands
We will assess it against the criteria an auditor will apply and give you a written findings memo, whether or not you engage us for the build.