Four Indicators It's Time to Retire a Generic Accounting Solution

Government businesses on a growth fast-track often don’t have time to think about how their internal systems are handling the increased workload until it is too late. Sure, contracting firms can limp along with mass-market, generic solutions like QuickBooks® for a time, but name one owner or CEO who wants their business to just get by rather than thrive. Here are four signs your business may have hit a wall with your generic accounting solution:

1. Your organization is managing multiple government contracts, or multiple phases within a contract, and employees are outnumbered or struggling to keep pace.
2. Manual processes still dominate much of your back-office finance and accounting work.
3. You’re bidding on contracts with new or stricter compliance requirements like CMMC or Cost+.
4. You lack real-time project and cost visibility that leads to poor project execution.

If any of these challenges sound familiar, then it may be time to start considering a more specialized solution.

Why Switch to an Industry-Specific ERP?

Unlike commercial firms, compliance with Federal Contract Regulations (FAR) clauses is a requirement to win and execute on federal government contracts. Contractors often struggle with understanding and putting in place compliant systems and processes related to financial accounting and cost principles. It is imperative to be able to manage how costs are classified, segregated and reported. Other critical elements of contractor accounting include:

• Classifying costs as either direct or indirect
• Classifying costs as allowable or unallowable
• Accounting for costs by project AND at the lowest work breakdown structure (WBS) level
• Managing and pooling indirect costs
• Supporting government-mandated billing formats (e.g., DD250, 1034, 1035). 

Many government contractors start off using simple, generic accounting software and spreadsheets, as well as costing and scheduling systems to manage finances, projects and compliance. Since these solutions are not designed specifically to meet government requirements, contractors put themselves at risk with non-compliant systems and processes that could impact eligibility for new awards, result in costly and time-consuming audits and could even cause a delay in payments until deficiencies are corrected.

Alternatively, contractors may also face unpredictable costs for supplemental services to achieve compliance. 

Deltek Costpoint: Built to Support Government Contractors of All Sizes

As a government contractor considering current and future growth, you may benefit from investing in your business. Here are three points to consider when evaluating an all-in-one, specialized solution like Deltek Costpoint:

Reduce Risk

The financial implications of operating a business on an inadequate system can put that firm at risk if there is uncertainty whether it will meet contractual regulation standards and mandates. For instance, QuickBooks and similar solutions have their strengths when it comes to functions like timekeeping, billing and benefit calculations. However, they fall short in the eyes of government agencies, like the Defense Contract Audit Agency (DCAA), where depth, layers and nuances are needed to reach the level of precise requirements that many contracts require.

Costpoint helps ensure total DCAA compliance and keeps businesses in sync with Defense Federal Acquisition Regulation Supplement (DFARS) and Sarbanes-Oxley Act (SOX) compliance.

Better Manage Complex Contracts

Firm-Fixed-Price (FFP) and Cost Reimbursable (often called Cost-Plus) contracts are common contracts encountered by small to medium-sized businesses in the government contracting space, each having its tracking challenges and needs. Complex contracts require robust child-and-parent functionality necessary for accuracy, and often, these types of contracts require multiple types of child-and –parent accounts at different levels. When using an out-of-the-box solution, like QuickBooks, complicated reporting requires hours of manual set up, and invites a higher margin of error due to the manual processing required.

Costpoint as a project accounting system has a variety of reports for complex contracts like FPP and Cost-Plus in its large library of standard reports. It also features multiple dashboards and the ability to create custom reports and dashboards.

Increase Efficiency

For government contractors just starting out, QuickBooks is an attractive solution as it’s affordable and has the basic accounting functionality small businesses need starting out. However, as a firm wins more complex contracts, there will be a time when limits are reached in terms of capability and, more importantly for accounting, manual processes become a true capacity issue. Businesses running on QuickBooks spend numerous hours a week pulling multiple manual and customized spreadsheets that are required by government agencies.

Costpoint sets businesses up for success with built-in automated reports, freeing up accounting teams to work on other projects.

If You’re Business is Poised for Growth,  Deltek Costpoint Is For You

By deploying a fit-for-purpose ERP like Deltek Costpoint, which meets your current and future needs, you can ensure that your growth is not stifled by an accounting system that you have outgrown. If you are still not convinced that Costpoint is the right solution for you, consider the following differentiators that set us apart from other ERPs:

• Costpoint was designed from the ground up to support government contractors of all sizes and has been doing so for 40+ years.
• Costpoint enables compliance with both government accounting and cybersecurity regulations.
• Costpoint brings time-saving automation across the entire project lifecycle, from accounting to shop floor.
• Costpoint is an all-in-one solution, with add-on modules for other business systems like procurement, manufacturing and human capital management, that integrate seamlessly.

Get to know Deltek Costpoint first-hand during one of our live monthly overviews or request a demo.