Growth & Profitability Prompts Small Government Business' Move from Generic Accounting Solution to Costpoint
Adaptic LLC’s mission–focused end–to–end systems engineering and analytic expertise enhances operationally deployed systems, guides the acquisition of complex systems under development and architects systems and technologies of the future. Adaptic LLC has a wide variety of capabilities, including software engineering, data science, systems engineering and program management, to support work within the intelligence community, Department of Defense and civilian agencies of the federal government.
When Aaron Solar, president and founder of Adaptic LLC, first hung the shingle for his government contracting business in 2016, it wasn’t initially a government contracting business, and the payroll consisted of a single employee, himself. After his firm was enlisted to support a contract with Fort Meade in Maryland, however, two things shifted for the company: 1) overall focus transitioned from commercial work to pursuing more opportunities with government agencies and 2) Adaptic was going to need some more software and system engineers to meet new demands. Now 12 employees strong – with plans to add at least three prospects in 2021 – Solar realized that using a network of systems that included QuickBooks® and third-party timekeeping, payroll and retirement solutions was not going to be effective for the company’s growth strategy.
Solar revisits his evaluation process for reviewing enterprise resource planning (ERP) options for Adaptic, and ultimately why he chose Deltek Costpoint to support the evolution and expansion of his business.
Q: Tell us about how your work within the government contracting space is shaping the industry.
A: After we understand what issues the government is having in a particular organization or with a specific technology, Adaptic helps provide the right skill and talent to fix the issue or guide a team or agency to a decision that allows them to be the most successful.
Q: What business challenges were you experiencing that led you to look for a new enterprise resource planning (ERP) solution, such as Costpoint?
A: Job costing or, I guess, people being married to labor categories and projects. Specifically, I needed to know is this individual actually profitable, or am I losing money on the placement of this person? Many companies use wrap rates as a guide to program profitability, getting a rate up to a bill rate. I approached it differently by building real-time profitability indicators based on what our budget wrap rate, lowest wrap rate that we can actually operate at, and our actual wrap, to compare that number to a person's cost and bill rates. It helped me to understand when a person and program are working well together, or whether I need to find a different spot for them. It also indicates when and where I need to invest and bring on strategic people for, A) the mission or, B) for future programs with that individual's capabilities.
Q: What systems and solutions had you used previously?
A: When I started the company, it was just me. I used QuickBooks initially. Then I added TSheets for timekeeping, Gusto™ for payroll, and Guideline for retirement management. That worked, more or less, until Adaptic grew to five people. Then, a need for accrual-based accounting and an understanding of indirect rates structures became important, as well as more efficiently processing payroll. It was at that point I knew that I had outgrown QuickBooks.
Q: What were your requirements for a new system or solution once you realized QuickBooks no longer fit your needs?
A: Our main goal was to get an accounting system that worked seamlessly with the DCAA (Defense Contract Audit Agency). We also wanted to expand to other agencies and have the ability for unlimited cost pools. Knowing Deltek’s indirect architecture, you really can't get better – no matter what size or scale or design you want your company to be – you have the flexibility to design that kind of indirect cost structure, no matter what your requirements are. Want an indirect pool per project? You can do that, if you want to get down to that kind of granular level.
Based on my knowledge of other systems, such as Unanet and PROCAS, I already knew that I was not interested in going with those platforms. I sole-sourced Deltek [Costpoint], knowing what the capabilities are and knowing it was the solution I needed long term.
Q: How quickly were you able to implement Costpoint?
A: The timing lined up in an unexpected way. Because we were all sitting on the bench for a number of months due to the COVID-19 pandemic, it actually turned out to be a perfect time for me to implement. I realized I’d have a lot fewer moving parts, and I could actually dedicate more internal time to the migration. We started to deploy in April , and by June 1, we went live. I spent a lot of time on the design, because that's something you want to get right the first time. Once I had everything designed, I used a QuickStart database, which some consultants have. That populates most of your required tables like accounts, orgs and stuff.
Q: What were some of the measureable differences you noticed right away comparing your experience with QuickBooks versus being on Costpoint?
A: Mainly having an audit trail. For example, if you go into a particular account, and that account number seems off to you, you have an auditable trail of that account's activities. With QuickBooks, you can bill easily, but you could have historical activity lost without even knowing about it. So being able to look back and review all the steps is extremely helpful, especially if you're in a growing phrase and running operations yourself primarily.
Also with QuickBooks, even though there was a third-party payroll system, there were still enough issues with recording time and hours per pay period. Or, if you had any kind of adjustments you needed to make, it was extremely difficult to do that and not have a cascading effect, especially when you're talking accounting periods, which QuickBooks does not have that concept. Everything is based on what date something is entered. It basically doubled or tripled the amount of work I had to do by creating/adjusting journal entries in order to have accrual-based accounting in QuickBooks.
Q: What are some of the measureable benefits you’ve experienced since moving to Costpoint?
A: In QuickBooks, for me to do billing and get billing correct – not have invoices rejected – used to take me a good eight to 10 hours a month. With Costpoint, now that is down to 20 or 30 minutes. This is for billing eight or 10 projects a month currently. Timekeeping takes me only a few minutes a week because through the charge trees and all the timesheets that I have, I know that whatever is being done in the timekeeping system already adheres to what our requirements are. And payroll processing, that used to take me a good three or four hours a month, and now currently it takes me about five or 10 minutes.
Previously, we were tracking what opportunities we're teamed on, where we have non-disclosure agreements in place, and have agreements to talk about future work in Microsoft® Excel, which led to sync issues. Having Costpoint be that source system of record is absolutely crucial for us as a contract management platform.
Q: How do you feel about being on a cloud solution like Costpoint?
A: One thing I did not want to deal with myself is patches. I fully trust the engineers over at Deltek, that I can just sit back, relax, and get an email saying, "Hey, we patched your system. This is what's new." So it’s definitely a "sleep-easy-at-night"-type solution.
Q: What advice would you give to a small government business like yours who is looking to grow and might be at a point they are considering alternatives to QuickBooks?
A: What you can never tell when you are small is how much growth you are going to have. I did not envision that over the course of a year, Adaptic would go from two people to 10. But, being able to have Costpoint and knowing that it can support that kind of growth, it becomes a very important thing to keep in mind when planning for our future and the systems we’ll need to get there.
Do not focus on just the cost per license. A lot of people go on QuickBooks when they're first starting out because it's less expensive per person. However, the amount of time and effort you're going to spend keeping it useful, especially as you grow, adds up a lot faster than you realize. Yes, cost is always a factor, but once you compare that against the labor required for QuickBooks and all the other third-party applications, which you need to support your business operations, Costpoint becomes the clear choice.
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