What do indirect rates and indirect costs in Unanet mean for my organization? This is a question most of the world of government contractors ask. Managing costs isn’t just about tracking the dollars that are spent. It’s also about maintaining a profit, compliance with federal regulations and contract terms, and meeting organizational goals and standards. Unanet plays a pivotal role in navigating the complexities of government contracting, specifically, indirect rates and costs.
Indirect Cost Importance
Indirect costs are essential for operations and are considered the backbone of the financial structure of an organization. Costs such as fringe benefits, overhead, G&A, and facilities expenses are considered indirect costs. Unanet can allocate the costs into “cost pools” to ensure they are assigned to the correct projects and accounts.
Why does this matter? Profitability can be directly impacted due to poorly managed indirect costs on projects that are under or over-burdened with expenses. An example of this would be if fringe benefits aren’t allocated properly, a project could appear more profitable than it truly is, which can impact financial decisions in the organization.
Unanet’s approach to this problem is to ensure accuracy in expense allocations by defining cost pools and allocation bases. An organization using Unanet should be able to run a job report for a given time period at actual indirect rates and reconcile it back to their income statement (less unallowable cost).
Indirect Rates Role
Indirect rates (typically fringe, overhead, and G&A) represent the methods used to allocate indirect costs to projects. The rates include target, provisional, and actual rates, which are updated by a Unanet administrator. The Indirect Cost Rate Report shows the details of the rates and the percentage breakout.
Indirect rates are important in compliance, billing, and financial reporting. Billing at provisional rates ensures cash flow from a project. However, reconciling provisional rates with actual rates is vital to true them up and understand your risk and liability throughout the year. The Statement of Indirect Rates in Unanet provides the breakout of the calculations and reconciling them back to the general ledger is key for audits.
Unanet can also accurately re-calculate indirect rate applications from provisional to actual cost once the incurred cost submission is final and those annual true-up bills are ready to be invoiced to the customer.
Unanet’s Key Benefits
- DCAA compliance and audit readiness
- Job level real profitability
- Streamlined reconciliation process
- Automation of Sch H on the ICS
Best Practices in Unanet
- Define indirect cost pools and establish clear cost structures.
- Update provisional and actual rates
- Track fully burdened costs at the project level and train PMs if necessary.
- Streamline the process for compliance tasks by utilizing Unanet Analytics Reports for Incurred Cost Submissions and other compliance reporting.
The Path Ahead
Whether you are new to government contracting or a seasoned professional, understanding indirect rates in Unanet is essential. Unanet’s powerful features offer a simpler way to manage indirect costs and rates to deliver real-time insights into your company. Accuracy and transparency are key to being government compliant in the indirect cost arena, and Unanet’s approach is not just a feature but a foundation for an organization’s success.
Indirect Rate and Indirect Cost Support in Unanet
At Redstone Government Consulting, we help government contractors get the most out of Unanet by offering hands-on implementation support, training, and outsourced accounting services tailored specifically for cost accounting and indirect rate management. Our team of experts works alongside your organization to establish accurate cost pools, develop compliant rate structures, and streamline your reconciliation process for incurred cost submissions. We also provide training courses, customized Unanet workshops, and ongoing consulting support to ensure your team stays aligned with DCAA compliance requirements. Whether you need help setting up indirect rates, running the right reports, or preparing for audit readiness, Redstone GCI is your trusted partner in maximizing Unanet’s capabilities and maintaining compliance.
Unanet Implementation Specialist Renee is an Unanet Implementation Specialist at Redstone Government Consulting, Inc., based in our Huntsville, Alabama office. She holds multiple Unanet certifications, including Implementation Specialist, Accounts Payable User, Accounts Receivable User, GovCon Billing & Revenue User, GovCon General Ledger User, Unanet Administrator, and Unanet Projects. Professional Experience Renee is a highly skilled and experienced professional in the field of accounting, with a strong background in working with private companies and government contractors. With years of experience in various accounting systems and roles, Renee has become an asset to any organization she works with. Renee has played an instrumental role in designing and launching a payroll system and has extensive experience in full-cycle accounting and reporting. She is proficient in data analysis and project management and is skilled in organization and time management. Renee has experience and knowledge in implementing multiple accounting systems, including Unanet, Microsoft Dynamics GP, and Quickbooks, as well as system training experience. She is skilled in General Ledger, Payroll, Cash, Accounts Payable and Accounts Receivable, Data Analysis, Expense Reporting, Inventory Management, Fixed Assets, and Depreciations, and is familiar with FAR, DFARs, GAAP, CAS, and DCAA compliance. In summary, Renee Van Cleve is a highly accomplished and skilled accounting professional with diverse experience and expertise in various industries and is an asset to the Redstone GCI team.