The Overhead of Doing Business with the Federal Government

July 10, 2015

in Operations, Sales

The first 6 months of this year, we have had to introduce multiple type of overhead into our operations to do business with the federal government. Essentially, in order to receive a larger contracts from the federal government, a business must have certain accounting standards. This is called being DCAA compliant.

The biggest difficulties in DCAA compliance are:

  • Every employee must log how they spend their time each day in an hourly tracking system, even employees that have nothing to do with the federal government contract. We use SpringAhead, which integrates with Quickbooks Online.
  • Accounting must be done in a very particular way, requiring specialized DCAA-aware accountants.

The added time and expense on accounting was not something I had imagined would be as intrusive as it has become. For our business, we are doing enough work with the federal government where incurring these overheads makes sense. But you definitely have to transact enough volume with the federal government to make it worthwhile.

What are your thoughts on the overhead of doing business with the federal government?



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