What to Look for in a Billing and Invoicing Tool
by Kim KosterBudgeting & Forecasting, GovCon
Jun 06, 2019
As a professional services company, it is critical to be able to automate and shorten the bid-to-bill lifecycle. Professional services organizations need revenue recognition and billing to be completely in lock step. The concept of billing and invoicing does not need much explanation as we deal with bills continually in our daily lives. Billings/Invoices typically are a form that contain information like name, address, payment terms, a unique id, elements of cost, direct costs, and indirect costs applied. Choosing a billing and invoicing software can help you maintain accuracy and efficiency. But how do you find billing and invoicing software that will give your company all the features it needs for success? When looking for a tool, it is important to have… A time application that is a part of the project based ERP system so that billing can be done quickly Traceability of all transactions Ability to create multiple, standard invoice formats to be used across projects, showing summary or detailed level information Hide or show Cost Element detail on Cost Plus Invoices Include Fixed Price, Time & Materials, Pre-Bill Labor, and Additional Items on the same invoice Defer items from the current invoice for future invoicing Add one-time items such as additional fees or discounts The Benefits of Billing and Invoicing Software Once your organization finds the right system, you will enjoy the following benefits: Billable expense markup ensures company or project-specific markups can be applied. Manage different contract types including Time & Materials, Fixed Price, Pre-Bill Labor and Cost Plus. Estimate and record what is billable, billed and earned. Enable review of draft invoices by project management roles. Manage bid-to-bill lifecycle in Unanet, or feed data to other systems Feed other systems with accounts receivable, or journal transactions at summary or detail level. Flexible invoice formats per project to reflect client needs and level of detail. Streamline Your Billing and Invoicing Process with Unanet When searching for the perfect billing and invoicing software for your organization, Unanet is the clear choice. Our software can automate the “bid-to-bill” lifecycle, allowing your organization to forecast and track revenue across different contract types, and provide authorized managers with real-time insight. Our software promotes faster invoicing which in turn results in a faster closing of the books and reduced DSOs. By providing a single integrated system to manage the entire services bid-to-bill cycle, Unanet gives businesses the opportunity to replace their disparate standalone systems, resulting in greater productivity, fewer errors, lower costs, and less stress for your team.
Getting Ready for a DCAA Audit
by Kim KosterGovCon, Government Compliance
May 22, 2019
Let’s quickly level-set on the mission of the Defense Contract Audit Agency (DCAA). Their primary function is to perform contract and financial audits for agencies that are responsible for acquisition and contract administration for the US Government. DCAA audits ONLY government contractors. Each DCAA audit is conducted in accordance with the Generally Accepted Government Auditing Standards (GAGAS). The principles that GAGAS embodies are unbiased audit conclusions based on facts. DCAA is a very vital part of the acquisition process for the Department of Defense (DOD) and certain other agencies. Their charter is to make sure that the taxpayers’ money is spent responsibly and ethically, by conducting audits that ensure the validity of costs throughout the acquisition process. They have a tremendous amount of influence because they communicate with the Contracting Officer (CO) and make recommendations that have an impact on contract negotiations. The recommendations help the CO understand what the price of the contract should be. In the past the relationship between the government contracting community and DCAA has been strained. DCAA is making a concerted effort to improve overall relationships with government contractors by improving communication and coordination. DCAA Audits are a Fact of Life for Government Contractors During our most recent GAUGE Report, we noted the types of audits that were most prevalent. There are many audits that a GovCon can be subject to. Below are those results with the ICS being the largest audit by far. Tips to Prepare for a DCAA Audit 2019 GAUGE survey respondents said that their DCAA oversight is increasing, 6% more than last year. So, it is important to understand how you can best manage your compliance and audits. Here are a several tips you can use to help ensure a successful DCAA audit. Why Unanet for DCAA Audit Preparation? Unanet is purpose-built with the project or contract in mind. It is uniquely designed for government contractors and has been battle-tested for compliance rules and regulations. Our compliance features are built into the tool, making compliance part of the fabric of your business. Unanet currently has over 1,000 clients using and trusting the system. Unanet supports compliant accumulation and allocation of costs utilizing time keeping, expense accounting, cost pools, indirect rates, revenue recognition, and project management all in one truly integrated system. Whether you are a small new or a seasoned larger GovCon, you can count on Unanet for your compliance needs. Unanet is recognized by the audit agencies as being “compliant ready,” giving you an immediate advantage in the audit process. Click here to learn more.
Understanding The DCAA Accounting System Audit
by Kim KosterAccounting, GovCon, Government Compliance
May 15, 2019
The topic of this blog is the post award accounting system audit. The post award accounting system audit is an examination of the accounting system at non-major contractors after contract award. The objective of the post award accounting system audit is to determine if the contractor’s accounting system complies with the DFARS 252.242-7006, Accounting System Administration, requirements. A post award accounting system audit is usually performed at the request of the contracting officer when: a follow-up audit to a preaward survey (SF1408) is recommended or a preaward survey was not conducted prior to contract award, and the contracting officer determines that an audit is now required to support contract requirements. What are the characteristics of an acceptable accounting system? Acceptable accounting system means a system that complies with the system criteria below to provide reasonable assurance that: Applicable laws and regulations are complied with; The accounting system and cost data are reliable; Risk of misallocations and mischarges are minimized; and Contract allocations and charges are consistent with billing procedures. What is DCAA Looking for in the Accounting System Audit? This list of criteria below is very similar to the SF1408 Preaward Survey. A sound internal control environment, accounting framework, and organizational structure Segregation of direct and indirect costs Identification and accumulation of direct costs by contract Consistent allocation method for of indirect costs to intermediate and final cost objectives Accumulation of cost under the general ledger control Reconciliation of subsidiary cost ledgers and cost objectives to general ledger Approval and documentation of adjusting entries Management reviews or internal audits of the system to ensure compliance with the Contractor’s established policies, procedures, and accounting practices A time keeping system that identifies employee’s labor by intermediate or final cost objectives A labor distribution system that charges direct and indirect labor to the final cost objectives Interim determination of costs charged to a contract through routine posting of books of account Exclusion from costs charged to the government contracts of amounts that are not allowable per FAR 31, Contract Cost Principals and Procedures, or other contract provisions Identification of cost by contract line item (CLIN) and by units if required by the proposed contract Segregation of preproduction costs from production costs Billings that can be reconciled to the cost accounts for both current and cumulative amounts claimed and comply with contract terms Cost accounting information, as required: By contract clauses concerning limitation of cost (FAR 52.232-20), limitation of funds (FAR 52.232-22), or allowable cost and payment (FAR 52.216-7); and To readily calculate indirect cost rates from the books of accounts; Adequate, reliable data for use in pricing follow-on acquisitions Accounting practices in accordance with standards promulgated by the Cost Accounting Standards Board, if applicable, otherwise, Generally Accepted Accounting Principles. A common question is what are some of the typical pitfalls contractors have when completing this audit. Our answer is that all of requirements are important and non-compliance could leave you with a non-adequate system. If the Contracting Officer makes a final determination to disapprove the Contractor’s accounting system, and the contract includes the clause at 252.242-7005, Contractor Business Systems, the Contracting Officer will withhold payments in accordance with that clause. No one wants to not get paid!! A tried and trusted tool like Unanet can help you meet the requirements above. If you are not comfortable with taking this on yourself please do reach out to Unanet as we have a partner network that can assist you every step of the way. It will be worth every penny you spend. Good luck on your audit and hope that there are many contract awards coming your way. For more information, download A GovCon’s Essential Guide to DCAA Compliance.
Alternatives to Deltek – What to Look For
by Kim KosterGovCon, Professional Services
May 13, 2019
Two words. Caveat Emptor (Buyer Beware). You’re in the market for a system that will support your entire business lifecycle. You need a robust system that can handle your financials, accounting, budgeting & planning, timesheets, expenses, project management, resource management, real-time reporting and more—all in one place. So, it’s time to research the market and find the best business software at the best value. Simple, right? Well, yes and no. Proceed with caution, ask the right questions, and you can figure out which system is the best fit for your business. Here are some questions to ask as you evaluate the myriad options for business software: 1. Are all of the products on one database? Unfortunately, many of the business software systems on the market are essentially a conglomerate of smaller products that have been acquired over the years, patched up to look similar, but running on different databases (this is the case with Deltek). This means that you are really dealing with multiple products, each with a different schema, different technology stack, and different security model. These disparate products interface through a system of importing and exporting, each time introducing an opportunity for error. What you want here is one unified application – one user interface, one database, one security model. Anything else is just a mess of leftovers served up in a single bucket. 2. Are project and resource dashboards, KPIs, and analytics reported in “Real-Time”? Another consequence of using business software that is a conglomeration of smaller products is that users will need to learn multiple products and go to multiple places to get the information they need. Because data is stored in numerous places and requires transfer and synchronization, their information is not truly “real-time”. With Deltek’s disparate systems, data needs to be combined to produce reports, and reports will show different output in different systems. Unanet, however, provides managers and project managers with real-time, “live” reports – instead of having to wait for weeks or even months to receive a report from an accounting system. 3. How can I ensure that only authorized employees have access to sensitive information? You will need to make sure your business software includes roles-based access for all members of the company. Unanet ensures security of information by providing real-time access to management without having to give them access to the backend financial system. 4. Is the software made in U.S.A.? Many companies save money by outsourcing the design and development of their software to offshore developers. Unanet is 100% designed and developed in the United States. 5. Will I have the customer support I need and want? Ah, the controversial question of where to base customer support. Again, it is cheaper to outsource customer support overseas, but this frequently results in customers complaining about high turnover, that they never talk to the same person twice, the rep can never answer questions, etc. Don’t get me wrong, it can be done well, but that’s rarely the case. Unanet believes that customer satisfaction and responsiveness are the highest priorities, and we have the customer feedback to prove it. We have an experienced, US-based team of dedicated, knowledgeable, responsive, and just plain nice people who will make sure you get an answer to your question and will support you through every step of implementation. As a self-funded company, we don’t answer to private equity or venture capital firms, so we are not forced to outsource our customer service. After all, a system that meets your desired outcomes is more than just technology. You need expert assistance in order to accomplish true business transformation. 6. What is the total cost of ownership? Yep, the million dollar question (well, let’s hope not – that’s a lot to pay for business software!). Ultimately, many decisions about purchasing new software for your business will come down to price. What do you get for your money? Be sure to compare not only the functionality of the software systems, but also the implementation costs, consulting costs, subscription/license fees, and, of course, the human resources you need to operate the software. Unanet’s intuitive, easy to use, easy to operate interface enables our customers’ finance teams to focus on transforming the business rather than running monotonous transactions. We feel confident that you will discover that Unanet offers the best “bang for your buck” when it comes to selecting high-value, low total cost of ownership software to manage your projects, people, and financials. Still struggling over your ERP software decision? Learn why One-Third of Unanet’s Customers Made the Switch From a Competitor.
Project Planning: Estimate, Budget, and Forecast
by Kim KosterBudgeting & Forecasting
May 10, 2019
What is Project Planning? – Estimating New Work (Proposal) The project planning process starts with a proposal estimate. Taking the time and effort to make a great proposal plan is a sure way to give the executing team the best shot for project success. The proposal estimate will have scope, schedule, and a cost. Understanding the scope is the first step. Utilizing a statement of work (SOW) or any document from your customer with the work required will establish the scope to be bid. Missing work can lead to schedule delays and cost overruns. Scope comprehension is hard when timelines to submit proposals are short. Associated with scope are the resources needed to execute and when those resources are available. The when and who make up the schedule and the cost portion of the estimate. Since your projects may be similar it is also advised to have a tool that can clone, utilizing a template, the project information, tasks, timelines, and the budget or estimate. Steps for completing the project proposal estimate: Understand the scope. Scope comprehension is the key to accurate estimating Utilize the project template to clone or populate the project information, the past estimates, and the timelines for the tasks Establish a work breakdown structure (WBS) Estimate the resources needed to complete the work Understand the timing of needed resources Include all materials, services, and travel required Time phase the estimates Ensure that the right skill set is available when you need them Use To Be Determined (TBDs) if the name of the resource is not yet available Gain buy-in from the proposal team and the functional departments before submission to the customer. Once the proposal is sent to the customer and negotiated, (YIPPEE, you won the project!!) it is handed over to a project manager to execute. Since a great project proposal estimate was developed by following the steps above, the project manager now has clear defined scope of work to execute, and an achievable resource plan with currently available resources. Work Breakdown Structures (WBS) A WBS is a hierarchical decomposition of the work to be accomplished on a project. It is typically outcome or product based and should make the management of scope, schedule, and cost much easier. A WBS should be created in the proposal phase of the project. During the proposal phase the WBS may stop at the task level. It is during execution that the detail is added to the WBS. As you can see from the visual, the work is broken down into manageable chunks. The advantages of utilizing a WBS are below: Work is broken apart, so task management can be spread out amongst the project team Provides a visual representation of the project Provides the structure for scheduling, costing, and reporting on the project Gives a repeatable backbone for future projects Helps with scope management—comprehension in initiation phase and minimizes scope creep in execution Scope, Schedule, and Budget Scope comprehension is one of the toughest activities that both a proposal team and a project team must tackle. It sounds simple, but with complex projects it can be difficult, because clarity of what will be delivered and what outcomes are expected are often not adequately described. Associated with scope are the resources needed to execute and when those resources are available. Scope is tracked in a document called a statement of work (SOW). The SOW gives the teams the bones of the project and typically it has a reference number with each requirement. The reference number makes it easy to track. In fact, the SOW reference number can be attached to a task, subtask, or work package so that with a simple report, you can cross reference to ensure all scope is covered. Scope creep is a continual problem and you must work hard to avoid adding scope without the associated budget and authorization. A robust change management process will help keep that from happening. Make sure your change management policies and procedures are up-to-date and that the teams have had role-based training to understand their part in the process. Since your projects may be similar, it is also advised to have a tool that can clone, utilizing a template, the project information, tasks, timelines, and the budget or project proposal estimate. During the proposal phase make sure you have a thorough scope review with all stakeholders in the SAME physical or virtual room. If you miss scope during the proposal phase the impact will be passed down to the execution team. Missing scope on a contract takes money right out of your pocket so make sure you understand what your customer wants. A proposal and a project schedule are a must. The task need-by dates establish the schedule that provides the basis of the cost. In a professional services company, the budget and resultant cost are driven by PEOPLE so our next section is on planning your resources. Resource Planning “Right People, Right Time, Right Task.” This is especially true in professional services firms where people are the primary driver of revenue, and the primary contributor to cost. People really are the most important asset a company has, yet so many companies struggle to truly manage this resource. Many times, resource planning is done too late in the process to make a difference and the result is behind schedule and over cost projects. Even if proposal and project managers want to plan their resources, the reality is that most resource planning is done ad-hoc with Excel files at the project level. There is no consideration of skills or what other projects need, and there is no clue what new work will require from a resource perspective. Below are 7 simple tips to help increase the efficiency of managing resources across the enterprise: Have a centralized repository for all resource plans that is accessible for all stakeholders Create a skills catalog so that the right resources will be available when (and where) you need them Forecast resources throughout the project lifecycle, don’t just start at contract award Use a single pool of resources across your company, not just on one project or portfolio Plan at the project level and roll-up to the enterprise—do not forecast by department only Provide stakeholders real-time resource demand and Key Performance Indicators (KPIs) reports as well as role-based dashboards Don’t plan your most important resources on disparate Excel spreadsheets Project Planning: The Importance of a Tool That Provides Real-Time Data Use a tool that enables all project stakeholders to visually see the availability, utilization, and time phasing of the resources. This level of visibility and control will help maximize overall performance and profitability of the project because clarity of what will be delivered and what outcomes are expected are often not adequately described for all stakeholders, but critical factors against which the success of the project will be measured. Resource Management Basic Information Metrics for resource planning/management MUST be real-time. Old data will not help you make great decisions, and can result in very costly ones. At a minimum, you should be able to answer the following questions: What utilization do you need to be profitable? What utilization should you aim for to avoid burnout? What is your actual billable and non-billable utilization? Is your project probability up-to-date so that your people forecasting most accurately reflects the most likely billable revenue and utilization? Estimate-at-Complete (ETC) As the project progresses things will change from the original plan. A key resource may win the lottery or be needed on a higher priority project, and when this happens the forecast must be updated. The EAC is the total actuals expended on the project + the dollarized time phased resources needed to complete the work. That time phased resource plan for work to be completed is called the Estimate-to-Complete (ETC). EAC and ETC can’t live without each other. EAC = Actuals + ETC The EAC is a forecast of the project’s cost when the work is complete. Throughout the project plans may change, the resources may change too, and it is the responsibility of the project manager to revise the work and replan tasks to best accomplish the end goal. Master the Project Planning Process with Unanet ERP software like Unanet can help streamline your entire project planning process, from estimate to budget to forecast. Our project management system is a single solution filled with invaluable tools that provide real-time insights and data to get your business where it needs to go. Learn more in our eBook, Selecting an ERP for Professional Services, and our white paper, 9 Simple Steps to Convince Your Leaderships to Adopt Project Portfolio Management (PPM).
The Characteristics of an Adequate Project Budget
by Kim KosterBudgeting & Forecasting, Project Management
May 01, 2019
What is a Project Budget? A project budget is what a project based organization believes is financially achievable. The budget is a target which the organization sets for itself, and becomes management’s commitment to action. Establishing a comprehensive and realistic project budget is rarely a simple task. After all, how do you accurately predict and outline all the moving parts that are required for project success—such as resources, billable hours, and additional expenses—and allot enough money for each of these? An added challenge is that many of these necessary elements will change before the project reaches completion. The project may take longer than expected, a staff member involved with the project may leave the company, costly errors may need to be remedied, and more. Every project should have a performance management baseline (PMB) that becomes the basis for variance analysis to plan (Budget–Actuals). The budget is a living and breathing document and should be adjusted as scope changes. If the budget is out-of-date, it will not provide the metrics needed to analyze variances. What Makes a Great Project Budget? How do you accomplish all this in your project budget? How do you anticipate all the potential changes and errors that will need to be fixed? While nobody can see the future, there are a few key qualities you can use to create your budget so that it can best adapt to any scenario. The characteristics of an adequate budget are: All scope is included—Budgeting tools have user-defined-fields (UDFs) so you can track the SOW or IMP references, ensuring you have all the scope budgeted. Scope comprehension is a big challenge. Correlated directly to the WBS which serves as a foundational structure for reporting on the project. Correlated directly to the schedule. The schedule also has a PMB and the schedule and the budget should correlate as far as time periods and resources. Time phased through the life of the project. The best practice would have the budget broken out at a minimum by month but could be done by week. The units (month or week) needed are driven by the nature of the business. The baseline assumptions are current, and changes are included as required. You want this to be a current representation of the work you are to accomplish. Who influences the project budget? How Unanet’s Budgeting & Forecasting Software Can Help Is your team struggling to create a realistic, comprehensive budget that can adapt to the unknown? Budgeting and forecasting software can make establishing the project budget much easier. This software has quite a few benefits: Streamline project reporting by offering managers insight into true margin Provide capability for planners and project managers to budget using indirect rates Expedite real-time information and decision-making Forecast direct, indirect charges, and revenues Integrate Budgeting and Forecasting data with workforce assignment and actuals labor and expenses Achieve effective resource utilization and improved service levels, with lower overhead Understand capacity, revenue, cost, and work schedules Identify and load level overbooked resources Unanet offers budgeting and forecasting software for project based organizations to ensure their projects stay on track and they can reach their financial goals. Our software has helped over 2,000 customers stay on budget while achieving project success. Learn how we can make this happen for you in our ebook, Selecting an ERP for Professional Services Organizations.