By Martin "Marty" McGann III, CEO, Premier Consulting & Integration, LLC (PCI).
Prepare Your Organization For Year End
The end of the government’s fiscal year can be an exciting yet stressful time for government contractors. Setting goals, reviewing budgets and closing out the books can all be very time-consuming tasks. By understanding the cycles of the federal government’s fiscal year, federal contractors can prepare and optimize where and how you prioritize your resources.
Here are some important factors to consider to help prepare your organization for end of the year priorities:
First Things First,Timing: Don't wait until the last minute! The federal government's fiscal year ends on September 30th of each year. This comes up fast for you and the government.
Review Your Current Contracts: The most important question to understand is how your spending plan is tracking with funding on your contract. This is a good time to make sure that if you are underspending your budget that you know why. Are you understaffed? Are you providing the value to your client that you expected? If the answer is no to either of these questions, consider bringing on more experienced staff or hiring. On the other hand, if you are short staffed and lack the funding needed to bring on more of the right resources to hit your clients mark, now is the time to ask. The most common occurrence, year after year is the government being in a “use or lose” situation where they have leftover funding in their budget that they must spend, or they will lose it. So now is the time take advantage of this. Identify if you have additional ceiling on your contracts or can if they be easily modified to accept additional funding.
Talk With Your Clients: Once you review your contracts and know where you stand it’s time to talk with your clients and level set expectations. If you are in a situation where you have funding to burn or you lose it, see if they are open to your ideas to create more value for them. Even if you are tracking to your budget, maybe you have some new ideas to address other needs that they have. See if they have funds that could be put to good use on your contract. The easiest and fastest way for the government to spend unused funds is through an existing contract.
Be on the Lookout for New Procurements: Just like you are preparing for the end of the fiscal year, the government is as well. They are also looking at their “use or lose” funding and looking for the best way to spend it. Often these funds are used in a new procurement. Sometimes from just the organization that has the excess funds, and other times funds are pulled from their original source and pooled together to support a new or larger need. Year after year 16.5% of government spending happens in the month of September, so be on the lookout for new procurements in the last few months of the fiscal year.
Make Purchases (Budgets): The end of the fiscal year is also a good time to consider making purchases. Depending on the type of contract that you have, additional expenses may be helpful to your contracts. Relevant expenses can be added into your overhead costs and thus covered in the costs paid by your clients. Check your contracts and need for purchases to see if this applies to you.
Set Goals & Plan for the Coming Year: Take a step back! Think about what you want to accomplish in the upcoming fiscal year. Are there new opportunities to reward strong performers with a new role or more responsibility? Is there an opportunity to replace staff on current contracts with new hires and free them up to focus on new corporate priorities? Do you have any gaps in capabilities, skills or experience that need to be filled next year? Technology moves fast, now is a great time to reset your view on where you are and where you want to be.
This article is courtesy of our partner, Premier Consulting & Integration (PCI), who offers a range of services from software implementation to audit support.
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About the Author
As a former CFO and controller for growing government contractors, Martin (Marty) McGann III has had vast experience in government contract accounting. In 2009, he started his own business Premier Consulting & Integration LLC (PCI), in an effort to provide best-in-class implementation, training and accounting support, for small to mid-sized government contractors. PCI was recently honored as Deltek’s 2018 Partner of the Year.
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