Redstone Government Consulting Blog | Quickbooks

Time tracking isn’t just an HR or project management issue for government contractors, it’s a critical accounting function. Accurate timekeeping feeds directly into everything from billing and financial statements to compliance and audit readiness. Let’s explain why this matters for your business, especially through the accounting lens.

Job costing involves tracking all expenses related to a specific job or project, including materials, labor, subcontractors, travel, and various other costs. For government contractors, this is especially crucial. In the context of payroll, job costing means taking each labor dollar and accurately allocating it to the appropriate cost pool and project. So, theoretically, all you need to do is set up a few projects, establish a DCAA-compliant chart of accounts, ensure you're following FAR Part 31 cost principles, and you’re ready to go, right? Unfortunately, it’s not that simple.

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.

QuickBooks Online is one of the most used accounting software for small to medium-sized businesses. The same is true for small businesses in the government contracting sector. QuickBooks Online does not label itself as a DCAA-compliant software to the extent that other software does (Costpoint, Unanet, etc.). However, it is a DCAA-compliant software, and it has the reporting capabilities needed to be considered as such. Let’s look at three essential reports you need to use as a government contractor for QuickBooks Online. Now, I realize these reports are not exactly groundbreaking reports. However, some people fail to realize the importance of each report and do not really understand how to utilize them to their full potential.

QuickBooks Online and QuickBooks Desktop are great pieces of accounting software for small businesses. There is almost no accounting task that QuickBooks cannot handle, and the good news for those looking to calculate indirect rates is that it is considered a government-compliant accounting system when used correctly. This means you can use it to pass an SF1408 pre–award audit and can even use the system to handle your government contract accounting indefinitely.

QuickBooks is considered a government-compliant accounting system and can definitely get the job done for a lot of small government contractors. However, there may come a time when you need to change your accounting system to something that is designed with government contractors in mind.

The accounting function for a government contractor can be a tedious job at times. Be sure to utilize QuickBooks Online Workflows to its full potential to help simplify the process.

The DCAA imposes strict requirements on government contractors when it comes to timekeeping. Make sure to utilize some of the key features in QuickBooks Time to help your business remain DCAA compliant.

Intuit is constantly developing and improving QuickBooks, particularly the online version. And while it’s still not nearly as robust as some of the more complex accounting software solutions that are geared specifically toward government contractors (nor should we expect it to be with the price point difference), it will still get the job done, particularly for small to mid-size contractors that don’t have a bunch of overly complex contracts.

In my last blog post, I discussed whether you could have a DCAA Approved Accounting System with QuickBooks. If you read it, then you know the answer is definitely – yes. This begs the next question though: QuickBooks Online (QBO) or QuickBooks Desktop? One might think that they’re essentially the same with one just being a cloud version and the other a local install. That could not be further from the truth. The two products are actually very different in terms of functionality and capabilities. A couple of years ago, I would have told you that QBO was just not an option for a government contractor. Appropriate job costing just couldn’t be done. In recent years though, Intuit has focused a lot of their internal development on QBO, and the product has come a long way. In this article we’ll go over some of the key differences between the two QB options, and hopefully help you decide which is right for you. Note that this is NOT a fully comprehensive comparison of all the different features, but rather a focus on some of the primary differences that are most relevant for government contractors.