The Three Certainties in Life: Death, Taxes and Compliance with Deltek
As Benjamin Franklin once famously said, there are two certainties in life: death and taxes. At Deltek, the saying is a little different. We like to say there are three certainties in life: death, taxes and government compliance.
The annual ritual of feverishly gathering records, completing returns, and rushing to the post office has slowly lessened over the years, especially with the rise of electronic filing. However, April 15 (otherwise known as Tax Day), remains a national anti-holiday of sorts. It may not be fun, but it is very much a part of our shared civic duty.
So, what better way to “celebrate” Tax Day than by embracing that commitment and sharing some key insights to keep your business on the right side of compliance?
First, having compliance policies demonstrates your corporate dedication to the federal government’s rules, just like paying your taxes. These policies—which cover timekeeping, travel, delegation of authority, accounting, estimating, billing, labor and more—can help your business establish order and demonstrate consistency in how you and your staff behave. Second, they also lower your risk of exposure. And, most importantly, if your organization has solid policies that it follows, that will reduce non-compliance in your government procurement program.
So, what are the key policies that your organization should implement to ensure compliance? Here are a few must-haves:
Timekeeping: Every employee needs to know that accurate and up-to-date time entry is a critical part of his or her job, and that entering the wrong hours or improperly preparing timekeeping reports will be penalized. To support that and help prevent audit headaches, it’s best for your accounting system to be fully integrated with your timekeeping system. If you have an electronic timekeeping system, there are numerous considerations to keep in mind. For example, employees should be able to enter their own time into the system, and supervisors should use the same system to review and approve staff time. Additionally, payroll and timekeeping need to be segregated.
Employee Compensation: When dealing with employee compensation, some costs are allowable and others aren’t. Clear compensation policies will eliminate confusion. Allowable cost for salaries include compensation reported on W-2 forms, payments in accordance with a written plan, offer letter or employee contract, and reasonable remuneration paid or proffered for services rendered.
Procurement: Adhering to approved procurement policies will clarify what you need to do to acquire property, equipment or services while doing government work. For example, any lease or buy authority rests with the government. If these kinds of purchases are made with government money, the title resides with the government, not your organization. And, lease or rental costs are allowable as long as they’re reasonable, but interest costs aren’t.
Policy Oversight: Take the time at an organizational level to create a “Policy on Policy”—essentially, an outline of what your policies should look like, and how they should work together. Every employee has a role in compliance—and this will ensure that your team understands theirs, down to the application of policies and assistance provided to auditors.
Of course this is just the tip of the compliance iceberg. Remember, it doesn’t pay to be non-compliant, because just like taxes, nobody wants to risk a civil or criminal penalty. But, beyond that, embracing compliance at an organizational level can help your company establish order and process consistencies.
And that is why just like death and taxes, Deltek is a certainty in life. Our solutions are purpose-built for the exacting standards required when working with government agencies and their compliance requirements.
Yearning for more government contracting knowledge? Join us for an exclusive look at this year’s Clarity Study industry data at Deltek’s Government Contracting Benchmark Showcase on Thursday, May 20.
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