Understanding The Regulations
There are many advantages to being a successful government contractor. However, the government has stricter rules and regulations regarding accounting when compared to private sector clients. It is important to keep up with federal regulatory requirements.
Federal government agencies receive their funding from taxpayer dollars and they need to justify their spending in order to prevent waste. We will help you make sense of government accounting so you can develop a methodology that works for you and your business.
The Integrity Of The Procurement Process
It is essential that all bidders on government contracts have equal access to any information needed to put together a comprehensive bidding package. A company that is bidding on a federal contract may not receive information that is not public in order to provide an unfair competitive advantage in the field. This includes things like an innocent email accidentally going to the wrong person.
Have A Clear Understanding Of The Government’s Accounting Requirements
The Financial Accounting Standards Board (FASB) states that contractors must comply with the following in order to work with the government:
- Federal Acquisition Regulations (FAR)
- Cost Accounting Standards
- FAR agency supplements
Understanding Audits
Your company should be clear on what the DCAA considers the responsibilities of federal contract actors. They include the following:
- timeliness of payments to subcontractors
- documentation of contractor oversight of subcontractors
- documentation of enforcement of flow downs
- documentation of support for subcontractor billings
- documentation of subcontractor reviews
Surprise Audits
Government audits can occur without any type of advance notices. Contractors must always be prepared in order to receive a solid evaluation.
A surprise audit that reports non-compliance with federal accounting regulations can have a lot of negative consequences. This could include termination of the contract and payments can be withheld unless improvements are in place. This can be very time-consuming and stressful. This can also severely affect opportunities for future business with the government.
Keeping Ahead of Technological Innovations
Keeping pace with stringent government accounting policies allows a company to truly understand governmental purposes, needs, and larger processes, and then use that knowledge to best manage and methodically grow the company. Luckily today there are many cutting edge technologies that can take the pressure off by making even the most complex accounting procedures quite simple. These innovations help a contractor comply with government requirements, permitting employment of systems for management and growth while adapting to keep in step with ever-incoming changes in requirements. Also, having a strong accounting system in place will only make your company better in the long run.
Make Sure You Have The Right Staff
It is vitally important that government contractors have skilled accounting staff to ensure that the company is in compliance with all policy regulations. The company must have adequate policies and procedures in place for the prevention of mistakes, and especially for their timely discovery and correction. This helps cut down on exposure to accounting errors that jeopardize contractors, inaccurate data, incorrect data entry into the system, or errors in the performance of internal accounting processes.
Make Sure You Are Organized
Having solid financial records and a clear thought-out process goes a long way to impress government agencies that you can handle the job. It presents a professional demeanor that is quite impressive.
The Key To Winning A Government Contract Is To Pay Attention To Guidelines
It is very important that you read closely what the request for proposals or RFPs wants in your bid. Make sure that you are aware of deadlines and who is handling the requests. Usually, small businesses have 6 to 8 weeks to submit a bid but this can vary, depending on the agency.
Make Use Of Government-Provided Free Tools.
You can identify contracting opportunities online by utilizing tools such as this forecasting tool that lets you see what opportunities are available. You can study the government contracts that are a couple of years old to see what requirements are needed to win the job. This puts you in an excellent position to have all your research completed when the contract is about to expire and you put in your proposal.
Do Not Give Up!
At some point, the process can be a little overwhelming. You must keep in mind that the reward will be worth all the effort. According to the American Express OPEN survey, 57% of businesses said their revenue has grown significantly because of government contracting, and at an average rate of 61%. However, business owners should keep in mind there is no secret formula for securing a contract. The United States government is a very lucrative client for any small business.
The Government Wants Small Businesses To Succeed
In many markets, small businesses are often outcompeted by larger organizations that often have access to almost unlimited resources. This set aside actually might increase a small business’s chances of winning a lucrative bid.
The federal government is required to set aside at least 23 percent of its total spending specifically for small businesses. Several small businesses have made a fortune just on federal government contract awards.
Make Sure You Have Your CAGE Code (Commercial and Government Entity)
This code is five characters and unique to your business. It’s your ID code, and government agencies will identify your business using this code. It is a bit like a social security number for your business. If your business includes more than one facility, then you will need multiple CAGE codes. Each location must have its own unique code, and each location must be registered separately with SAM.
SAM Directory Can Help
Remember, registering for the SAM directory gives a business automatic entry into the extremely lucrative marketplace of the federal government. It is also a crucial step for applying for rewarding government grants that can help your business reach its full potential. Let us, the professionals at SAM Directory, make sure that you do all that is needed to not miss out on this important opportunity. We will make certain that your application is processed quickly and efficiently so you can start being a federal contractor as soon as possible. We remove this hassle so you can go about the important mission of running your company. Stay tuned for the next article in this series.