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 Managing Consultant in Redstone Government Consulting’s Collaborative Accounting Solutions Group, where he provides strategic accounting support, government contractor-specific reporting, and financial system optimization. With experience spanning public accounting, financial management, and compliance, Dylan offers a comprehensive approach to accounting solutions that helps government contractors navigate complex financial environments. His expertise in account reconciliations, project analysis, revenue recognition, and software implementations allows him to support clients in streamlining processes and improving operational efficiency. Dylan began his career in the banking industry, supporting financial operations and developing a strong foundation in accounting systems and reconciliations. He later transitioned into public accounting, where he gained extensive experience in financial reporting, tax preparation, attestation services, and compliance for various industries, including government contracting. His background in managing financial closes, payroll and sales tax compliance, and financial analysis gives him a well-rounded perspective on the unique challenges government contractors face. Before joining Redstone GCI, Dylan held roles in accounting and financial consulting, where he was responsible for monthly and annual financial closes, accounts payable and receivable, tax filings, and developing financial models to support budgeting and forecasting. His expertise extends to accounting software solutions, where he has supported clients using multiple accounting software packages. At Redstone GCI, Dylan plays a key role in collaborative accounting support, assisting government contractors with monthly accounting and reporting activities, financial system implementations, and process improvement initiatives. He also supports Redstone GCI’s compliance and software implementation teams, leveraging his experience to assist clients in DCAA-compliant system set-up, including supporting policies. Dylan’s strong technical background, problem-solving skills, and commitment to client success make him a trusted resource for government contractors seeking to enhance financial operations and maintain compliance with confidence.