8(a)Application FAQs regarding Federal Contracting and SBA requirements

How does history influence the way accounting and bookkeeping professionals run their practices? How does history inspire all of us to learn from others and excel in our personal and professional lives? To celebrate and honor Black History Month, Scott H. Cytron sat down with three leaders in the profession to discuss these topics—and much more: Check it out – Celebrating and honoring Black History Month

Jeff Wilson II, CPA/PFS, CGMA, CFE, AFC has been featured in an Tax Pro Center Intuit. Tax and accounting firm managers and sole practitioners are looking for ways to leverage cloud technology to increase their firms’ operational efficiency, product delivery and, hopefully, employee satisfaction. During the transformation of turning my firm, The WII Group (pronounced W2 Group), into a cloud-based firm five years ago, we instantly saw gains by moving to the cloud. Now, five years later, we have seen our firm’s efficiency and profits grow exponentially. Check it out – How to Give Clients Better Insights

This article is part of an ongoing series. In part 1 , I covered how to measure your firm’s performance, and in part 2 , I discussed seeking client satisfaction. In this article, I’ll go over marketing your practice. This series is a prequel to my QuickBooks® Connect session: Measure Once, Cut Twice. Here’s more on marketing your practice. Personally, my least favorite phase is marketing. I feel I’m a pretty good CPA with no lousy record. I believe clients should look at my website, read my bio, and make their purchasing decision. It all makes sense to me, but IT DOESN’T WORK LIKE THAT! As our marketing team often reminds me, we must build a marketing program, test it, and then measure it. Check it out – Marketing Your Practice

This article is part of an ongoing series. In part 1 , I covered how to measure your firm’s performance, and in part 3 , I discussed marketing your practice. In this article, I’ll go over how to seek client satisfaction. This series is a prequel to my QuickBooks® Connect session: Measure Once, Cut Twice. Here’s more on seeking client satisfaction.  As a practice manager, I like to track client happiness/client satisfaction . This measurement allows me to understand how my team delivers our services to our clients, how my clients are receiving that service, and if they feel they are getting the best service possible. Check it out – Seeking client satisfaction

Has your 8(a) application been rejected? The good news is that you have options, but you have to act quickly. We've outline the 7 most common reasons an 8(a) application is rejected and what you can do to fix it. We recommend that you have it reviewed by a CPA before submitting, but if you opt to DIY it, here’s what you need to know.

Budget Planning for Non-Profit Organizations and Associations Budget planning can be tricky for any organization, but, in the case of nonprofits , there are many considerations you must take into account. Because your goal as a non-profit organization is sustainability, you must plan a budget that focuses on the primary objectives of the association and provides financial and programmatic adaptability. This is where your budget committee comes in. What to Consider When Selecting your Budget Committee The first thing to consider when budget planning for your non-profit organization or association is who will be the most optimal members of your budget committee. When choosing volunteers to serve on your budget committee, consider these things: Are they familiar with your association’s prior years’ activities along with any changes that are being contemplated as part of your strategic plan? Your budget committee members should be familiar with your association’s past, present, and planned future so that they can accurately plan the budget and help you achieve your objectives. Do they have a genuine desire to serve the association as a whole, or are they focused on lobbying for one particular project? Volunteers who are selected to serve on your budget committee should be focused on budgeting for your association as a whole. How knowledgeable are they about nonprofit accounting services and/or budgeting in general, whether it’s on a personal or business level? You should strive to pack your budget committee with volunteers who are knowledgeable and experienced in budgeting. Do they know or understand the (3) Basic Financial Statements (Statement of Activities, Financial Position, and Statement of Cashflows) Things Your Budget Committee Should Consider When Budget Planning Once you have your budget committee in place, it is their crucial task to develop the budget for the next year (or perhaps multiple years). There are many considerations they need to address while planning the budget and preparing it for presentation to the board for approval. They need to: Determine the timeframe for the budget. Will it be a one-year budget or a multi-year budget? The timeframe for the budget will usually take into consideration the calendar year, the fiscal year, and the board approval process. For example, the federal government’s fiscal year ends on September 30, while many non-profits have a fiscal year ending June 30. If your association plans on submitting grant applications prior to the mid-January deadline, a fiscal year ending June 30 is ideal to allow time to complete an audit. Develop the timeline of goals and objectives for the timeframe of the budget being planned, along with projected estimates of how much each goal or objective will require to achieve. They can use the previous year’s budget as a jumping off point, but it’s still very important to factor in any new projects or activities that are being planned and estimate each expense needed to achieve those goals. Estimate the dates and amounts of revenue to be generated, being realistic about these expectations rather than optimistic. Your budget committee should be aware of your major contributors and how much they typically contribute, while also considering whether those contributors have had a good year or a bad year, as either scenario could affect their contributions going forward (they might be able to contribute more, or they may have to decrease their contributions). They need to consider the economy in general as well. If your association has a history of public contributions and/or fundraising efforts, a decline in the economy could negatively impact this revenue. Additional Duties and Responsibilities of Your Budget Committee Your budget committee will need to consider various other aspects of the budget that tie into your strategic plan, such as: What kinds of grants are you expecting to receive, and what are the terms of these grants? Does the grant require an audit? Can these funds be used for anything, or are they restricted to only certain purposes? Does the grant allow for overhead expenses? Is it feasible that the requirements of the grant could overwhelm your association, as grants from large government agencies sometimes do, or could this additional funding make your contributors believe that you no longer need their contributions? Anticipating all costs that may come into play during the budget timeframe, including direct costs (costs related to a specific project or program), capital expenditures (items that will continue to benefit your association after the budget timeframe, i.e. cars, real estate), indirect or overhead costs (costs that are not directly associated with a particular project but are necessary to complete it, i.e. Internet access, phones), and contributions of goods or services, as these are recorded on Form 990 as revenue when received and as an expense when used. Completing the budget well in advance so there is ample time to present it to the board of directors and make any changes necessary for board approval. The Ongoing Need for Budgetary Review Once your budget is complete and has won board approval, your budget committee’s work isn’t done yet. They also need to: Determine if an audit committee is needed or if some of your association’s grant funding requires an external audit. Re-review the budget regularly and compare the actual numbers achieved VS the budgeted numbers to determine the variance. It would be nice if the planned budget always came together perfectly on track, but this is rarely the case. By determining the variance sooner rather than later, it becomes possible to proactively adjust the budget during the budgeted timeframe. Ensure that your association is in compliance with all federal, state, and other reporting requirements. We hope this helps you with your non-profit budget planning so that your association can accomplish all of your goals!

How Your Chart of Accounts Can Make or Break Your Contract Proposals If you’re a government contractor, it’s important to know how to provide accurate rates to potential clients quickly in order to win more contracts and ensure that you win profitable contracts. Are you prepared to handle this kind of request when it comes up? Accurate Rates Start With a Strong Chart of Accounts As a government contractor, it’s so important to maintain DCAA compliant accounting systems and have your chart of accounts set up correctly so that you can begin the process of bidding on a new contract right away. Your chart of accounts is the foundation of your accounting system. Without the right foundation, you won’t be able to pull the numbers you need out of your books. These numbers are the key to determining your contractor rates. Best Practices for Setting Up Your Chart of Accounts Your chart of accounts is a list of all account names and numbers relevant to your company. Many organizations use Quickbooks to set this up and maintain DCAA compliance in their government contractor accounting. Typically, this will include four different account types: assets, liabilities, income, and operating expenses. When you’re setting up your chart of accounts, you’ll want to assign a name and account number to each account and also differentiate which category each account falls under. Here are some best practices to use when setting up your chart of accounts: When you’re creating your business account names, keep it simple, i.e., Bank Fees, Cash, Wages, Rent Expenses When assigning business account numbers, commonly used number sequences used to categorize accounts are: Assets: 1000 - 1999 Liabilities: 2000 – 2999 Income: 4000 – 4999 Operating Expenses: 6000-7999 Create sub-accounts instead of adding new line items every time you need to add something. For example, if you need to add a new rent expense, break that category down with sub-accounts for each rent expense you need to log and track. You can download our free DCAA chart of accounts template here! What Makes a Strong Chart of Accounts? Now that you’ve seen the simplest way to set up your Chart of Accounts, let’s discuss what makes a strong Chart of Accounts that will make it easier for you to demonstrate your organization’s financial health and win profitable government contracts. Keep it organized: Category, Account, Sub-Account. As you add and adjust accounts, avoid adding a new line item for each and every account because that can get messy and confusing quickly. Include financial statements. Add a column for account statements that specifies which statement you’ll be using for each account-cash flow, balance sheet, or income statement. These statements will help you stay on top of your financial health. Your balance sheet will help you manage your asset and liability accounts, while your income statements will provide documentation for your expense accounts. Track account movement. Your Chart of Accounts is a valuable living document that helps you stay on top of your organization’s accounts simply, and, therefore, accounts will need to be added or removed on a regular basis. If you need to add an account, do so as soon as it comes in. If you need to remove an account, however, wait until the end of the year or at least the end of the quarter just in case you need documentation from that account. The Three Types of Costs and Why They’re Important When you’re estimating your contractor rates and managing your Chart of Accounts, it’s important to understand the different types of costs involved and how they’re categorized. There are three different cost buckets used by government agencies to allocate costs: Direct Costs – These are costs that are easily identifiable as they connect to the direct delivery of production, i.e., direct labor, travel, materials, and subcontractors. Indirect Costs – These are sometimes referred to as “burdens” because they cannot be easily identified and connected to a specific contract or project. It’s important in your government contractor accounting to understand where these costs lie within your contracting budget and how they’re reported within your Chart of Accounts so that you accurately estimate your eligible costs and land profitable contracts. Generally, indirect costs fall under one of three categories: fringe benefits, overhead, or general and administrative costs. Unallowable Costs – These are costs that the government does not reimburse, such as alcohol purchased at a business dinner. Determine Your Wrap Rate to Win Profitable Contracts If you’ve set up your Chart of Accounts properly and considered all of your applicable costs for the government contracts you’re hoping to secure, it should be simple enough to determine your wrap rate. Your wrap rate is what allows you to determine what you need to satisfy your payroll needs, overhead, and general and administrative costs in order to provide exemplary service to your government contracting clients. It also includes your fee, which is your profit. If you fail to keep up with your Chart of Accounts and underestimate your costs, you could end up in a long-term contract that’s unprofitable for your organization. We hope this information helps you gain more understanding of government contractor accounting and your organization’s financial health and win more profitable contracts!

Jeff Wilson II, CPA/PFS, CGMA, CFE, AFC has been featured in a Tax Pro Center Intuit article. Learn three ways to help the employees in your tax and accounting practice stay up to speed on processes, industry trends and more. In this age of fast-paced information, numerous cloud-based accounting systems, millions of apps, and changing accounting standards, it’s hard for the most technical accountant or greatest generalist (if they still exist) to keep up. It’s come to the point that keeping up with new technology is harder than keeping up with the technical side of accounting. So how do we, as leaders, keep ourselves and our teams up to par? At the W2 Group, we have found specialization training, ongoing training meeting and cross-training within the firm has helped reduce the employee knowledge gap of all employees in our firm. Check it out – How to Give Clients Better Insights