Is qbo dcaa compliant, and if not, is there something that will make it so?

The keys to Compliance include the following:

- Time-keeping posted daily with required explanations for edits and record locking, can be pre-printed time-sheets or one of several digital solutions

- Policies & Procedures oriented toward FAR Compliance Criteria found in DCAA's SF-1408 pre-award audit checklist

- Consistently applied Labor $ Distribution accommodating uncompensated OT for salary exempt personnel

- Cogent Indirect Cost Pools and the ability to compute and forecast Indirect Rates applied to Direct Costs under Cost Reimbursable Awards

- Progress billing + Cumulative $ values reported against award ceilings tied to cost proposals

- Identification and segregation of Unallowable Costs as defined per FAR 31.205

Reach out if I can be of any service. The QBO people are not versed in the nuances and  requirements of FAR Compliance. The important aspect for QBO is Job Costing which simply means the ability to charge Direct Costs to Customers and Sub-Customers for proper reporting.

solutions at dcaa-assist dot com

www.dcaa-assist.com

Hi 

Just to confirm, it is possible to make Quick-books online DCAA compliant? I do not have to switch the QB desktop version correct?

It's nice to see you here in the Community, @Dlowe1980.

It's not necessary to switch to QuickBooks Desktop to be compliant with the Defense Contract Audit Agency (DCAA). Let me add more details about this and help you from there.

As mentioned by my colleague @Anonymous, you'll only need a third-party application. You don't need to switch to other versions.

When searching for a third-party application, you can use the Apps tab in your QuickBooks account. Or you can search online.

To search for applications in your account, you can follow these steps:

1. Click on Apps from the left panel.
2. Click on Browse Category to refine your search.

Once you have an application, you'll need to contact their support so they can guide you how.

Please let me know if you have any other concerns. I'll be here to help.

I am a FAR and DCAA Compliance Specialist. I've conducted dozens of SF-1408 pre-award audits with DCAA Auditors representing clients all over the country. 

Both QB's Desktop and QB's Online can be augmented to be DCAA / FAR Compliant. The keys are Job Costing and Labor Distribution. The advantage that QB's Desktop has over QBO is it's integrated payroll module that permits direct charging of time (via a number of available digital time-keeping tools) direct to the General Ledger including Customer, Job, and Service Items.

This interface of digital time-keeping and Payroll (with or without a QB's Payroll subscription) makes QB's Desktop the superior tool for DCAA Compliance based on my experience with hundreds of clients over the course of a decade.

You can find me at www.dcaa-assist.com

Thanks for joining this thread, @drefl. 

You can use another product, QuickBooks Self-Employed (QBSE), so you can connect your bank account into the program. However, you still need a third-party application for this program to be compliant with the DCAA. 

This program is for freelancers, independent contractors, home-based entrepreneurs, and consultants. Here are some of the tasks that you can do: 

• Get your estimated tax payments calculated for you
• Put your expenses into the correct Schedule C categories
• Help you figure out your business profit
• Organize your business spending and maximize your business deductions

To learn more about the product features, you can read through this article: QBSE Overview.

Here are the steps on how to connect your bank account: 

1. Go to the Gear icon at the upper right. 
2. From the drop-down menu, choose Bank Accounts.
3. Type in the name or the bank's URL in the Search box. 
4. Enter the sign-in info you use at your bank's website.
5. Click Connect securely.

For more detailed steps, you can check out this article: Connect A Bank Account. 

On the other hand, you can search for a DCAA compliant app that can integrate with the system by visiting the website provided by Jen_D above. Then, you'll need to contact their support team's directly to help you set up the integration process. 

If I can be of further assistance, I'm just a click away. Have an awesome day. 

Hi drefl - 

I have done GovCon accounting for 3 decades so totally understand what you say here and agree with most. I have worked with all the known GovCon accounting systems (PROCAS, Unanet, Deltek Costpoint, etc). Yes,  you are correct that they do not offer the automatic bank feeds and I doubt that they ever would allow that, since you are required to do GAAP accrual-based accounting so that would not work well since accounting transactions should never be input from the bank statement. That is only done by very small businesses who are not Govt contractors.  Accounting transactions should be input from original source documents so then the bank statement account reconciliation should ideally be done by another person for separation of duties as part of internal controls.  I recommend PROCAS to all of my new small clients. Does everything you need for CPFF, T&M and FFP contracts, web-based with full project cost accounting, DCAA compliant timekeeping, expense reporting with all of the per diem rates, first/last day at 75%, etc. Includes all the normal AP. AR. GL, Bank recons, etc. Computes Indirect rates and provides ICE schedules, accepts Provisional rates for customer billing, includes dashboards and a plethora of project cost reports and all the normal financial reports that can easily be printed in many formats including Excel and PDF. The one great function it shares with QB is the drill-down feature and none of the larger systems include that.  I have clients using PROCAS as small as one owner/employee, pricing starts for 5 employees at @$295/mo. and the price has not changed since I started using the system in 2011 which no one else can say they do.  I do not sell any systems but I do implementations and can get anyone a great discount if interested. I also actually use the system for my own accounting and I don't even need the GovCon/DCAA requirements. It is easier to use than QB so once you are setup you no longer need to pay consultants or do Excel SS at all. My fastest implementation was 10 days from the day I met client and have more clients on that system than on any other system.  I have over 90 GovCon/DCAA consulting clients, so I highly recommend to anyone. 

@Teri - Can you please add some contact info so that I can reach out to you for some more guidance?

Hi Cynthia - 

I am just now seeing your message here, haha, and we have already spoken at length of course yesterday. I do not come here very often. Great job on your detective work to have found me anyway on LinkedIn.  :) Just saw my contact info is on profile here.

When I do come here, my goal is always one thing, to try to help small Govt contractors being misled. I have had SO many clients come to me when they are using QB and have so many things to be corrected. I'm not looking for new clients since I have more than plenty and regularly refer many to other consultants.  I'm actually reducing the number of potential clients I might get, by helping them before they mess it up. 

There are some very nice people here trying to help others so I think that is a great thing especially when you see there are over 6000 Unanswered Questions here with people waiting for replies that never come. However, the majority of people here and people in general, including the accountants here who happen to know nothing about GovCon accounting and the many requirements that make it different for small biz.

That is to be expected that most people/accountants and even CPA's know nothing about GovCon work, since it is not taught in school not even if you pass the CPA exam or have MBA in Accounting as I do. The only way one would know about GovCon accounting would be to have worked for a Govt contractor or worked at DCAA in the past, but even that does not always educate them enough to know how to do.

Many people falsely say that GAAP and accrual-basis accounting only applies to large public companies. Not true. All Govt contractors, no matter how small (like one owner/employee) are required to follow FAR where GAAP and accrual-basis accounting are prerequisites required to pass DCAA audits to win contract or keep it once awarded and audited. There are many Govt contractors here who are being misguided.

There are many more requirements that QB alone cannot do, such as true project cost accounting, billing, timekeeping, labor distribution, indirect rate calculations, tracking cumulative cost and billing by WBS, etc. Strongly suggest seeking guidance from one of the many professional consultants who can save you time and money and reduce audit risk with add-on systems or workarounds they have created with Excel files.

I prefer not to use add-on systems or Excel workarounds since they are too messy and risky and costly but would possibly be better than not trying to do things in compliance with requirements. My preference is to use an all-in-one system that does all that is required to meet GovCon accounting and DCAA compliance. the best least cost system for that is called PROCAS. I do not sell any systems, but can tell you about this. 

@Anonymous - It appears the first reply here is changed from being sent by Intuit Staff to "Anonymous." The replies below have been brought to my attention by multiple clients who were misled by this post.

The post says:  Great news! QBO is now DCAA-compliant, when nothing has changed to make it true. The fact remains that the user would be required to PURCHASE another system to "add-on" to QBO.  These apps as you call them are just Excel spreadsheet that someone has strung together with macros. Then goes on to say this app will align QBO with DCAA requirements. No, it won't do that at all, ever. 

NO, DO NOT advise Govt contractors to contact DCAA for assistance. That is totally bad wrong advice. DCAA is the last place you want to call to say you don't know how to do the accounting that is required. That is contractor suicide, equivalent to calling cops to follow you home from a bar when you are drunk! The instructions for compliance are contained in the FAR (Federal Acquisition Regulations), Govt laws.

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@Anonymous wrote:

Greetings, Info25,

 

I can see this is your first time here, so I'd like to welcome you to the Community.

 

Great news! QuickBooks Online can now be compliant with the Defense Contract Audit Agency (DCAA). You'll only need to have a third-party application to align your QuickBooks with the DCAA regulations.

 

You also need to get in touch with the DCAA agency first, to get the instructions on how to get compliant with them. Once you have the information, you can consult one of our representatives to help you get set up. Here's how to contact us: Get help with QuickBooks Online

 

You can visit this website to get the DCAA compliant applications that work best with Quickbooks: https://apps.intuit.com/

 

Please feel free to get back to me if you need any help with Quickbooks. I'm here to make sure everything's sorted out for you. Have a great day!

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Could you please define what you mean by "augmenting" QBO to make DCAA compliant?  The answer I assume you are referring to adding Excel spreadsheets to "augment" QBO [Content removed by moderator per post below]

It seems many people are being led to believe they can use QBO for DCAA compliance [Content removed by moderator per post below]

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@DCAA-Compliance wrote:

The keys to Compliance include the following:

 

- Time-keeping posted daily with required explanations for edits and record locking, can be pre-printed time-sheets or one of several digital solutions

- Policies & Procedures oriented toward FAR Compliance Criteria found in DCAA's SF-1408 pre-award audit checklist

- Consistently applied Labor $ Distribution accommodating uncompensated OT for salary exempt personnel

- Cogent Indirect Cost Pools and the ability to compute and forecast Indirect Rates applied to Direct Costs under Cost Reimbursable Awards

- Progress billing + Cumulative $ values reported against award ceilings tied to cost proposals

- Identification and segregation of Unallowable Costs as defined per FAR 31.205

 

Reach out if I can be of any service. The QBO people are not versed in the nuances and  requirements of FAR Compliance. The important aspect for QBO is Job Costing which simply means the ability to charge Direct Costs to Customers and Sub-Customers for proper reporting.

 

solutions at dcaa-assist dot com

www.dcaa-assist.com

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Teri,

I respect your background and professionalism. However, despite your many years of experience, you don't know everything. [Content removed by moderator per post below]

QBD and QBO can pass DCAA preaward audits with proper augmentation, as I previously reported.

I don't want to clash swords with you [Content removed by moderator per post below]

Cynthia - if you would like to discuss how QBO / QBD can be implemented for DCAA Compliance I would be happy to answer your questions. Teri is a skilled professional in the field and her perspectives are valuable, they're just not the whole picture [Content removed by moderator per post below] and point people to more expensive and sophisticated solutions, which are not necessarily cost effective for the small and emerging contractor.

www.dcaa-assist.com / solutions at dcaa-assist dot com

@DCAA-Compliance Jeff -

Cynthia is an experienced accountant and is familiar with QuickBooks and how it works.

I believe she was looking at Unanet or Microsoft Dynamics for her client last we discussed.

Those systems are both significantly different from any QB and PROCAS, as you likely know.

Yes, I agree.  You and I communicate very differently.  I am very direct and have strong opinions.

[Content removed by moderator per post below]

Perhaps you could be more transparent here and admit what "augmentation" really means [Content removed by moderator per post below]

Yes, I do not recommend QB for Govt contractors since I have found it to be less than adequate to meet the requirements and expectations of any growing GovCon business with owners who prefer to focus on business development vs. trying to save a buck creating bookkeeping workarounds in their spare time.

I have seen way too many clients come to me after working with QB GovCon consultants [Content removed by moderator per post below] having spent way too much time and money poured into what they thought would be their least cost solution which turns out to be higher cost and then they are still not happy nor getting what is needed.

I definitely do not think I know everything. I think I make pretty clear that I am not a QuickBooks expert, despite having used it for a few decades myself and with many clients. [Content removed by moderator per post below]

Using QuickBooks for GovCon work is the best way to ensure that clients have to pay [Content removed by moderator per post below] forever to be able to maintain the manual functions created and that is just not my business model.  I train all of my 

clients to be independent as soon as they are ready since they should not need to pay me forever.

Stepping in as moderator to remind everyone that while we encourage you to express your point of view and voice your opinions, we also do not allow personal attacks against other members.   I have removed and/or edited several of the posts on this board that are getting close to the line, and am posting this as a warning for everyone.  

This falls under the Community Terms of Service section entitled "Profanity, Harassment and Other Inappropriate Conduct" which states the following: 

You will not submit Postings that are indecent, profane (including masked profanity where symbols, initials, intentional misspellings or other characters are used to suggest profane language), obscene, pornographic, abusive, threatening, misleading, derogatory, illegal or defamatory, or any material that interferes with the ability of others to enjoy or utilize the Site. We do not tolerate harassment, or denigration based on age, gender, race, religion, national origin, sexual orientation or disability.

I am not going to close this thread, but I will continue monitoring it.  Please try to to remember to keep the conversation centered on the product and not the people on the other end of the keyboard.

Lisa N

Community Moderator

@LisaNullar 

[Content removed by moderator per post above]

Sorry for my delayed response. June 30 is like year-end for most Govt contractors required to do annual submissions to DCAA for audit so I have been swamped with working all-nighters on them. Govt contractors are all of my clients for the last 30 years so I am a bit protective of those people.

Many of them start out on QB and many are misled by what they read on this forum unfortunately.  That is actually where many of my clients come from when they get into trouble not passing audit. Govt contractors must do GAAP accrual-basis accounting even as small as one owner/employee

[Content removed by moderator per post above]

Govt contractors must pass Accounting System Audit in order to be awarded CPFF contracts along with meeting several other FAR requirements that are critical to the company's success and survival. I am quite passionate about this so I hate to see when they are misled since I think that is wrong so saying QB is DCAA compliant with "augmentation" meaning adding additional systems is a stretch.

When Govt contractors use QB much of their most important accounting must be done outside QB by additional purchased systems or manually in Excel which requires a lot more consulting cost and usually ongoing consulting to maintain those manual processes so the cost is often higher than not. So consultants that go that route make a lot more money but I chose not to overcharge in that way.

[Content removed by moderator per post above]

[Content removed by moderator per post above]

Providing half-truths about a system's capabilities does not benefit QuickBooks either when clients become angry customers or worse when they do not pass audits and then blame QB for something

that was promised by a third-party with ulterior motives who spams users regularly with same post.  

I see these are listed below as violating policy:

misleading, derogatory or defamatory

If my response seemed to follow suit, thank you for removing mine as well, I should not have reacted. Hard to not respond at same level when someone who knows nothing about you or your business is  making misleading, derogatory or defamatory remarks [Content removed by moderator per post above] I have no need to be here but to try to help other people, I do not even work with clients using QB.

[Content removed by moderator per post above]

LisaNullar,

Do you think that Teri's further comments are fair, unbiased, professional and non-accusatory? Are they based on actual experience (since she herself is not an experienced QB's user) or simply written to further her agendas and bait  anyone who may have a different result or opinion when using QB's?

I find her reply to indulge once again in spurious conclusions and implied accusations of incompetency and deliberate rate gauging by professionals such as myself and others who provide excellent and affordable customer service to QB's Gov't Contractors over the course of decades of professional practice.

I won't belittle Teri's character, it speaks for itself. Just so you're clear. I do not disparage anyone or any systems in this Community. I do not infer that some other consultant is misleading clients or taking unfair advantage of them. 

I trust you are capable of discerning how Teri's 'contributions' though appearing to be constructive are veiled and dysfunctional means to tear down the conscientious efforts of those of us who take QB's and Gov't Contractors seriously. I did not intend to add anything further to the thread, but I cannot in all good conscience permit Teri to control and set the tone for an abusive narrative that she so easily engages in.

@DCAA-Compliance Jeffrey -

Why would you say I am not an experienced QB user, when I have used for over 30 years?  I used it for my own business for a decade.  You really need to stop saying things that you know nothing about. Likewise on the cost of other systems that you know nothing about obviously. I have inherited a few of your clients. You might notice my response here was to drefl who says the same as I did. Here are some facts for you. My last 3 clients who had tried to make QB work for Govt contracts:  One spent over a year trying to get it to work properly and then called me and we had him setup in 10 days; another flunked his accounting system audit and lost a $750k contract; a third spent $40k on consulting trying to get it to work right and then we started the accounting system audit and halfway through he realized he could not get billing to work so we had to stop the audit in the middle and implement a new system for him. All three are doing great now and are long-time clients for years now. I can provide their contact info to anyone interested. Two were 3 person companies when they started and the last guy was a single/owner employee who was able to win his first CPFF contract as Prime contractor.  I just hate to see anyone misled by misinformation.

thanks for the insight - i am a longtime government contract accounting consultant who first started at DCAA many moons ago.  I am helping a life sciences start up with their grant accounting.  i have been using manual time sheets that require the employee to input  % of their effort for each project by day - then the spreadsheet calculates the number of hours for each project for the payperiod.  I tie into the paid amounts when i enter the dollars each pay period into my projects in quickbooks.  I was trying to find an electronic system such as T-sheets to help, but it doesn't help with the uncompensated OT.  I really don't understand how they can call themselves DCAA compliant when they don't have a feature for this.  Of course the sales guy kept telling me it would take care of the OT issue but it doesn't. 

i am sure you are still using lots of spreadsheets !  

HI there, @Hilarie.

Tsheets can calculate overtime based on the logout time. Let me show you how to track it.

 Here's how:

1. Go to the Company Settings.
2. Select Payroll and Overtime
3. Open the Overtime tab
4. Uncheck the box next to "Also calculate daily overtime after:" or you may select another type of overtime.
5. Once done, click Save.

You may check this article for more information about overtime tracking: Set up overtime tracking.

If there's anything else that I can help you with, leave a comment below. I'll be glad to assist you further. Have a great rest of your day.

Hi @Hilarie - 

I agree and see you got a response but understand that is not your question. You need UCOT not OT.

I can point you to a system if you are looking.  Please feel free to send me a message or email here:

[email address removed] 

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@Hilarie wrote:

thanks for the insight - i am a longtime government contract accounting consultant who first started at DCAA many moons ago.  I am helping a life sciences start up with their grant accounting.  i have been using manual time sheets that require the employee to input  % of their effort for each project by day - then the spreadsheet calculates the number of hours for each project for the payperiod.  I tie into the paid amounts when i enter the dollars each pay period into my projects in quickbooks.  I was trying to find an electronic system such as T-sheets to help, but it doesn't help with the uncompensated OT.  I really don't understand how they can call themselves DCAA compliant when they don't have a feature for this.  Of course the sales guy kept telling me it would take care of the OT issue but it doesn't. 

 

i am sure you are still using lots of spreadsheets !  

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MaryAnn,

Hillarie is asking about UNCOMPENSATED OT.  I have the same issue with TSheets/QB Time.  I need this feature as a Government Contractor that has CPFF contracts.   

How does QBO handle that ?  Is there a 3rd party app for that ?  After all it IS in fact required to be DCAA Compliant.

Thank you for any help you can provide.