Things To Know About DCAA Account And Incurred Costs

Posted by dcaa Consultant on January 23rd, 2020

It is generally said that getting a government contract is somewhat similar to learning a new language which on the upper plane sounds interesting and easy but in the inside the rules and grammars are tough to get hold onto. DCAA or the defence contract audit agency is one of such governmental agency, a part of defence entity who maids some sets of regulations and compliances to maintain the financial stability and other competencies of firms bidding for government contracts.

Generally the DCAA audit works through two principals sets of regulations and their are various subdivision to those primary regulations. They are – FAR or Federal acquisition regulations and CAS or cost accounting standards. However, as easy as it looks on pen paper, complying to all the stringent guidelines are pretty hard. And thus, you need the help expert cost accountants and auditors who have experience in devoting to various government contracts for years to get a full grasp on it.

What are incurred cost submission?

Among the various clause that one needs to comply by, incurred cost submissions is one such clause in the FAR regulations sets where the government contractors needs to submit their annual indirect cost ratings that too within after 6 months of ending of that fiscal year.

Why is it needed?

In case you are wondering on why incurred costs are necessary then it’s answer lies in the provisional billing rates usage during the time and work period. Normally the cost reimbursement along with time and material contracts works on providing provisional bills which the contractor charges to the government throughout a year. Occasionally, it has been seen that there lies a huge difference between estimated rates and the actual rates. Hence, comes the concept of incurred cost which determines the final rates a contractor has collected during that fiscal year. Remember that ICS can go both ways that is to say government can owe the contractor money or the contractor can owe it to the government. Thus, the compliance to submit to ICS is tad difficult and complex. So only the professional indirect cost accounting experts with years of devotion in the government contractors market can only cater the best out of it.

Who have to submit ICS?

Now that what ICS is clear, the question of who needs to submit it comes. Submission of ICS is mandatory for all firms which has got any cost reimbursements or any other kind of Time and Materials type of contracts.

How to choose accountant for a smooth ICS filing?

Governmental compliances are tough complicated to walk through. Only when you are backed with an expert accountant you can easily sail through. There are no substitutions to experience when it comes to governmental contracts. Thus make sure the accountant you hire have decades of experience in handling government contracts. They should know the various regulations and compliances in filing these submissions like the palm of their hands. And mostly importantly a versatile accountant having expertise over indirect cost accounts as well as of compliances and regulations are the ones to choose from.