DCAA compliant accounting software improves the financial management of your government contracting business. We used our advanced review methodology to select the top options for features like indirect cost management and project accounting.
- JAMIS Prime ERP: Best Overall
- Deltek Costpoint: Best Indirect Cost Management Tools
- PROCAS: Best Project Accounting Module
- BigTime: Best PSA System
- WrkPlan: Best for Small Federal Government Contractors
- Unanet ERP GovCon: Best for Subcontractor Management
- eFAACT
1 JAMIS Prime ERP - Best Overall
Why We Chose It: We gave JAMIS Prime ERP an 8.8 score because of its strong project accounting tools. This system is ideal for mid to large-sized government contractors that require compliant accounting. It includes general ledger, accounts receivable, accounts payable, cash and tax management, and multi-company accounting features to streamline and automate processes.
We like JAMIS Prime ERP’s project accounting module because it provides detailed cost information and controls billing and revenue. It complies with FAR, DCAA, and CAS regulations, ensuring contractors pass all audits. Additionally, it helps track time and expenses so governments can create accurate labor charges and reduce improper charges during employee travel. However, we found its multi-currency support lacking, as companies can only have one “home-base” currency even with multiple entities in different countries.
2 Deltek Costpoint - Best Indirect Cost Management Tools
Why We Chose It: We like Deltek Costpoint for its indirect cost management, giving it an overall score of 8.7. The software enables users to accurately define and allocate indirect costs, such as overhead and general and administrative expenses. It also provides the flexibility to set up multiple indirect rate structures for various government contracts.
We also like that Deltek Costpoint provides accurate and detailed timekeeping. The platform allows for precisely tracking employee hours against specific projects or tasks. Its ability to handle complex labor distribution and report these costs in detail is a significant advantage for maintaining DCAA compliance. Despite these features, users have noted that its UI is unintuitive, as some basic tasks require multiple clicks to accomplish.
3 PROCAS - Best Project Accounting Module
Why We Chose It: We like PROCAS because of its advanced project accounting for government contractors, earning an 8.0 score. It enables detailed tracking of costs and revenues at the project level, including direct and indirect costs, bill rates, and funding limits. This allows companies to access real-time data on crucial data, helping them gain insights into financial ratios, balance sheets, and cash flow.
PROCAS maintains automated audit trails, ensuring all financial transactions are documented. It records who entered or changed information and the dates and times of these actions, helping provide the transparency and accountability needed to pass DCAA audits. We like that it also includes detailed mobile time tracking, enabling contractors to log hours on the go. PROCAS is primarily an accounting software, so it does lack more comprehensive features such as payroll and HR.
4 BigTime - Best PSA System
Why We Chose It: We found BigTime best suits contractors looking for an effective PSA solution to integrate with QuickBooks. It offers a strong project management module that allows businesses to coordinate budgets, review and submit timesheets, and visualize project timelines. This helps companies minimize delays due to ineffective scheduling and waiting on invoices, as these processes are automated and streamlined.
We also like that BigTime is an official Intuit-Integrated Application, meaning it is built to sync data with QuickBooks Online for cohesive accounting. The system’s time tracking module has audit log comments and locks time entries after submission, helping management control edits to ensure DCAA compliance. We also like its affordability, with its lowest-tier Essentials plan being $20/user/month. However, some users have reported invoicing has limited customization options.
5 WrkPlan - Best for Small Federal Government Contractors
Why We Chose It: We like WrkPlan best for small federal government contractors because of its fast implementation and strong ERP package. Its government contract management module helps businesses enter key details like subcontractor assignments, rates, costs, and funding status. This allows for accurate information storage for easy reference and auditing.
We also like WrkPlan’s automatic invoicing features, which allow contractors to create government-formatted invoices to stay compliant with DCAA. The document covers fixed price, time & materials, cost plus contracts, and funding status tracking, ensuring accurate billing. Using these metrics, companies can also create reports to visualize overall financial performance and identify trends. While these features are effective, we don’t like that WrkPlan doesn’t have payroll integration.
6 Unanet ERP GovCon - Best for Subcontractor Management
Why We Chose It: We found Unanet ERP GovCon ideal for businesses managing a high volume of subcontractors. It offers an employee portal and mobile app for streamlined onboarding and timekeeping, ensuring subcontractors are up and running fast. Users can create timecard rules that are automatically enforced to improve efficiency and accuracy.
We also like Unanet ERP GovCon’s analytics module, which helps companies manage their financials and extract insights from real-time data. This is achieved through custom reports, which can be used to analyze key metrics like performance, job costs, resource allocation, and profit margin. We also like that Unanet ERP GovCon includes CRM integration, allowing for a more unified system. However, the software has been difficult to learn for some users because of the large number of features.
7 eFAACT
Why We Chose It: We included eFAACT because of its effective project management system built for QuickBooks integration. The software includes built-in user checkups to evaluate current performance and helps users prepare for DCAA audits. It also generates indirect rates and ICE schedules at the end of each fiscal year, streamlining the closing process and making these tasks efficient.
We also found eFAACT’s project and executive management modules noteworthy for government contractors. These allow full coverage of project and contract performance from one central location, making analysis of costs and activity more efficient. eFAACT also features real-time indirect rate calculation. This allows contractors to monitor their indirect costs continuously and make informed decisions about project pricing and cost control.
What is DCAA Compliant Accounting Software?
DCAA Compliant Accounting software is any financial solution compliant with the Defense Contract Audit Agency (DCAA) requirements. DCAA compliance refers to the adherence of a company’s accounting, financial, and timekeeping systems to the recommendations and guidance provided by the DCAA. This federal government agency is responsible for auditing DoD contracts, ensuring that organizations’ business processes and systems seeking or holding government contracting work align with DCAA requirements.
Since these contracts can be worth hundreds or even billions of dollars, funded by taxpayers, DCAA audits are crucial for maintaining transparency and accountability. A DCAA-compliant business system should be able to track various costs, such as direct and indirect costs, accounting, billing, and labor costs, and fully integrate with its timekeeping system. This way, the company can efficiently produce all necessary reports required by the DCAA during an audit.
One thing to note is no software is officially “DCAA approved,” as the term itself is an inaccurate designation. Instead, the DCAA audits a company’s financial systems to determine their compliance with government Job Cost Accounting regulations found in the Federal Acquisition Regulation (FAR). Any ERP platform or accounting software could be classified as DCAA compliant if it passes the required accounting system audit based on Government Auditing Standards from the "Yellow Book.”
Government contractors span a huge variety of different business models, from small businesses to global enterprises. However, one thing that all government contractors have in common is a high level of oversight with DCAA audits. The right accounting software can help your government contracting company ensure financial visibility for the different monitoring organizations and compliance with relevant regulations.
Key Features
- Expense Reporting: Measure financial data in a general ledger to balance Accounts Receivable (AR) and Accounts Payable (AP) and report all direct and indirect costs.
- Cost Accounting: Accurately report on allocating funds to produce goods and services during government-contracted projects.
- Contract Management: Manage the creation, negotiation, signing, and renewal of legally binding government contracts, including subcontracts.
- Project Management: Coordinate and streamline the execution of project tasks to optimize direct and indirect costs related to labor and equipment utilization.
- Timekeeping System: Use timesheets for employee time tracking on all DoD contracted work assignments to ensure accurate hours are reported.
The scope of the different project accounting practices available to government contractors is as varied as the types of businesses that perform government contract work. Some small businesses will need to perform their own accounting in-house, while others can afford Certified Public Accountants (CPAs) to handle the work for them.
With so many possibilities, accounting software packages designed to meet DCAA requirements for government contractor companies must offer a full range of financial management tools. Accounting features include tracking real-time expenses, managing payroll from labor distribution, estimating job costs, performing bank reconciliations, and creating top-level financial reports.
Additionally, there is a huge variety of applications available for your specific DCAA compliant accounting system. For example, manufacturers will find MRP, inventory control, and bill of materials modules, while food services firms can benefit from point of sale solutions. Other typical applications can include time and billing, job costing, CRM, eCommerce, and work order management to name just a few.
One common need for government contractors is functionality to assist with bid and proposal processes. Applications are readily available that will help manage a portfolio of projects while assisting in developing bids and managing ongoing work for specific projects.
Primary Benefits
Accounting software designed for your government contracting business can help you manage costs, revenues, and profits while allowing you to view information on a per-project basis. With the right accounting tools, you can easily establish auditable financial records.
Manage Unallowable Costs
A common issue companies face when dealing with government agencies is determining allowable and unallowable costs. The former can be reimbursed or fully covered by a contract’s terms, while the latter can leave your business footing the bill. Generally, allowable costs are those necessary for the completion of a project: expenses related to manufacturing, delivery, or service.
Unallowable costs as defined by FAR 31.205 are those which do not meet these criteria:
- Reasonable
- Allocable
- Cost Accounting Standards (CAS)
- Contract terms
- FAR subpart limitations
For instance, imagine a small business wins a government contract and requires transportation for its workers to get to and from a job site. Purchasing one or two vehicles would be reasonable and an allowable cost under DCAA regulations. On the other hand, buying a fleet of luxury cars would be considered unreasonable and thus unallowable.
It’s important to note that many indirect costs fall under the unallowable umbrella. With DCAA compliant accounting software, your employees can remain aware of whether their work is or isn’t covered.
Maintain Government Contractor Accounting Compliance
Government contractor organizations are among the most frequently audited businesses in the world. Compliance with assorted regulations is part of doing business as a government contractor. Especially for smaller government contractors, there may be little expertise in dealing with audit agencies and the wide variety of different regulations. Approved accounting systems specifically designed to promote regulatory compliance can be of enormous assistance in helping your organization meet DCAA, DCMA, DOL, IG, and GAO standards.
Pricing
DCAA compliant accounting software is typically ERP systems, which costs small to midsize businesses between $1,700 and $10,000/month. The cost largely depends on the size of your business and how many users will utilize the system.
Companies can also choose DCAA compliant PSA systems like BigTime and eFAACT that are less expensive and integrate them with QuickBooks Online. These optimize timekeeping and project management but don’t include more advanced features like payroll or HR.
Is QuickBooks DCAA Compliant?
QuickBooks by Intuit offers incredibly popular accounting software products to businesses of all industries. As such, many government contractors have asked if their current QuickBooks software is already DCAA compliant. The answer depends on usage and additional software integrations.
For instance, when all team members use time tracking features correctly and honestly, QuickBooks can be DCAA compliant by creating an audit trail for timesheets. The software is compliant when used in conjunction with another approved system, such as GovCon, so you don’t have to change your entire accounting system if you already use QuickBooks.
