What You Need To Know About the DCAA Compliance for Small Business

August 2, 2019

Small businesses drive the economy in every sector, so it’s no surprise the Department of Defense looks to them in its contracts with outside vendors, suppliers, and equipment manufacturers. If you are looking to take advantage of opportunities to grow your business through bidding on defense contracts, you need an accountant service in Los Angeles that understands the DCAA compliance process used to ensure defense contractors operate to the standards laid out by the federal government.

How Is DCAA Compliance Tested?

There is an auditing process, in fact, the DCAA is short for the Defense Contractor Audit Agency. This process involves pre-award reviews of the company’s financial practices to ensure they comply. Some examples of practices that need to be adopted include:

• Timekeeping that separates labor by contact
• Segregation of direct and indirect costs
• Monthly account reconciliation procedures
• Separation of pre-production and production costs
• The ability to allocate line items in the budget
• Reconciliation with the general ledger system 

There are other requirements a firm needs to adopt before it can be awarded a contract, and your best bet for a speedy approval in your audit is to get help from an experienced Encino accountant who has worked with DCAA compliance before. Of course, the best help you can get will be the firm that has more than just experience. It will be the firm with practice.

Find the Accounting Firm for Your Small Business

The right Los Angeles accounting firm for a company looking to gain defense contract awards will be one that already manages the finances of businesses that have been awarded contracts. They not only have the experience to make sure your practices are in compliance they have the experience of managing finances to keep them in compliance. That makes it easier for you to build a sustainable, long-term approach to your business finances that builds in the processes the DCAA requires.