Defense Contractor Accounting & Tax

Before you contact a provider

Questions to ask

Do they support your contract types and current accounting system?
Can they help document indirect rates and prepare for DCAA review?
What work is included each month, and what requires a separate engagement?

Profiles summarize publicly available services. Confirm qualifications, scope, and fit directly with each provider.

Choose government-contract accounting help by the work you must support

A provider should understand your contract types, cost records and reporting obligations, then propose the smallest reliable process that fits them. Buying software advertised as “DCAA compliant” does not by itself establish that your accounting practices are adequate. DCAA’s pre-award accounting-system checklist is a useful reference for discussing a relevant review.

Compare provider proposals Write the scope of work

Can your current CPA do the work?

Ask for experience with the actual contract types and reporting you face. A strong tax or bookkeeping relationship may remain useful, while project accounting, indirect rates, timekeeping or audit preparation require additional expertise. Have the advisers agree who owns the ledger, tax filings, cost policies, invoices and contract reporting so work does not fall between them.

Contract or task	What to discuss	Ask the provider to demonstrate
Firm-fixed-price delivery	Job profitability, invoicing, acceptance evidence and cash timing.	A project report and invoice support process matched to the award.
Cost-reimbursement work	Allowability, allocation, direct/indirect separation and required reporting.	Documented policies, account mapping and reconciliations.
Time-and-materials work	Labor categories, approved hours, rate application and material support.	Traceability from time entry to billing and the ledger.
Pre-award review	Criteria in the requested system review and missing evidence.	A gap list with owners, deliverables and completion evidence.

Understand indirect rates before comparing a price

An indirect rate allocates a defined cost pool over an appropriate base. Ask the accountant to show which expenses enter the pool, which costs are excluded, how the base is defined and how the resulting allocation reconciles to your ledger. Do not copy another company’s percentage. A rate without its pool and base definition is not a usable pricing assumption. The applicable FAR cost principles and award terms govern the treatment.

Compare systems by workflow

Use a representative month as a demonstration: enter time, approve it, distribute labor, record subcontract costs, reconcile the ledger and prepare an invoice. Check whether the system retains changes and approvals, whether your team can export its records and what work remains manual. Ask about migration, training, licenses, integrations and ongoing support separately. A costly implementation is not justified merely because one prospective customer might eventually require a different contract type.

Define the engagement

Setup: chart of accounts, project structure, policies, system configuration and opening balances.
Monthly work: close, reconciliations, timekeeping review, billing support and management reports.
Special work: rate proposals, audit support, historical cleanup and contract-specific submissions.
Handoff: editable records, system access, documentation and transition assistance.

Price each part. In the comparison workbook, separate a one-time setup fee from recurring charges and retain notes for work priced hourly or excluded. A low monthly fee can be misleading when it excludes the reports you actually need.

When to bring in contracts counsel

Use accounting help for the records and cost model, and contracts counsel for consequential interpretations or negotiations. Ask the two advisers to agree which questions each will answer. A payroll system setting cannot resolve an ambiguous contract clause.

Your next step

Gather one representative award, your current accounting setup and the reports you must produce. Prepare a common brief for the providers below and ask each to demonstrate the same workflow.

Compare providers

Accounting & tax providers

73 providers

Service Providers

1CFO

Fractional CFO services for government contractors

Phoenix, Arizona, United States

Capabilities

Accounting & tax
Fractional CFO & back office

Markets served

Accounting and tax services for defense contractors