QuickBooks Online, while not specifically designed for government contractors, is still considered a compliant software for government contractors. It can also handle the setup of any type of contract that you may be awarded. The process is straightforward, but there are some key considerations that need to be made before diving in headfirst into your project setup.
Do You Have the Appropriate Version of QuickBooks Online?
Unfortunately, when you see all of the subscription levels that QuickBooks Online offers, it can be a little confusing. It can be difficult to tell which version is right for you as a government contractor without actually getting your hands dirty. Fortunately, our team at Redstone Government Consulting has several years of experience in all versions and can guide you appropriately. As it stands right now, QuickBooks Online Plus is the version that government contractors need at a minimum. There are several reasons for this but one of the main reasons is that it allows expenses to be tracked by project, which is a crucial part of government contract accounting.
What Do the Contracts Say?
The most important part of contract setup is having a strong understanding of the contract that you are dealing with.
- What type of contract is it?
- Is it time and material (T&M), Firm-Fixed Price, or some other type of contract?
- Are there CLINS or SLINS associated with the contract?
- There may even be PO numbers or task numbers.
- It is also important to check and see at which level the contract is funded. For example, you may have a contract with a client name, PO number, and 3 SLINS. Usually, the funding will be down at the SLIN level.
Be sure that you have a strong understanding of the contract before trying to set it up in QuickBooks Online.
The Setup Phase of Contracts in QuickBooks
You’ve got the right version of QuickBooks Online and you thoroughly understand the contract at hand. Now, you can begin setting up your contract in QuickBooks Online.
We will use the information from above for our example. Let’s say the contract has a client name, a PO number, and 3 SLINS. The contract is funded at the SLIN level. In QuickBooks Online, you will need to first set up the customer’s name as a customer. Then, you will set up the PO number as a sub–customer to the customer that you just set up. The final step is to set up all 3 of the funded CLINS as projects that will be sub – projects to the PO that you just set up.
Once complete, you need to go to the main customer list and verify the setup was done properly. On the customer list, you can click the gear icon and have it include projects for visual display purposes. You should then be able to see all parts of the setup displayed in a hierarchical format. This is just one example of how you might would set up a contract in QuickBooks Online. Again, it is heavily dependent on what the contract says.
Are you currently using QuickBooks Online and need to set up your government contracts? Our team can help.
Dylan McMurrey is a Senior Consultant within Redstone GCI’s Collaborative Accounting Solutions Group based in Huntsville, AL. Dylan has several years of progressive experience in the public accounting industry and his role includes providing accounting support to our government contracting clients, as well as supporting government contractor specific reporting. Dylan has a passion for accounting and enjoys helping clients achieve success in their business. Professional Experience Dylan’s career in accounting began in the banking industry where he supported the accounting department for a regional credit union. Building on the experience gained in the banking industry Dylan moved into public accounting where he played a variety of role supporting the day-to-day accounting for clients and traditional CPA functions in attestation and taxation. During his time in public accounting, Dylan has supported companies operating in a variety of industries including government contracting. His diverse understanding of accounting processes in banking, government contractors and traditional commercial companies brings an additional perspective to the Redstone GCI team. Dylan’s primary role at Redstone GCI will be within our collaborative accounting group, where Dylan will lead the support of Redstone GCI clients with their monthly accounting and reporting activities. Dylan has a passion for accounting software and has supported clients on a diverse range of commercial accounting software, as well as supporting clients on more traditional government contract accounting systems like Deltek and Unanet. Additionally, Dylan provides support to both our compliance and software implementation groups where he assists with developing financial models to support forward pricing and strategic indirect rate evaluations.