What this tool does
A diagnostic for government contractors, scoring indirect rates structure, accounting system adequacy, timekeeping, billing and cash conversion, backlog quality and the diligence file a buyer or an auditor will ask for.
How to read the result
- Overhead charged to a contract decide both your competitiveness and your audit exposure. A rate structure built for one contract type rarely survives a second.
- Accounting system adequacy is a yes or no that gates whole categories of work.
- Timekeeping is the compliance area that fails fastest and is cheapest to fix.
- Work sold and not yet delivered is not revenue. Funded, unfunded and option years are three different things to a buyer.
Questions we get asked
Who is this for?
Government contractors from first prime award through an exit, including firms carrying a mix of commercial and federal work.
What do buyers test first in GovCon diligence?
Overhead charged to a contract, timekeeping and the gap between billed, funded and collected. Those three explain most valuation adjustments.
Do you support incurred cost submissions?
We keep the books and rate structure in the condition the submission needs and work alongside your accountants and counsel.
What the diagnostic scores
- Overhead charged to a contract structure: whether pools and bases match how you actually win work
- Accounting system adequacy: whether the system would pass review
- Timekeeping: daily entry, approvals and the audit trail behind them
- Billing and cash conversion: the gap between funded, billed and collected
- Work sold and not yet delivered quality: funded against unfunded and option years
- Diligence file: what a buyer would ask for that does not exist yet
Where to next
- GovCon resource center, guides on rates, compliance and exit
- Fractional CFO for GovCon
- How the rate structure is built
- Preparing a GovCon company for sale
Run the diagnostic
Ten dimensions, scored, with a seller archetype and a value-capture range at the end. Nothing is saved unless you ask for the result in writing.
Run the diagnostic →What this measures
Government contract work is priced and audited differently from commercial work, and a finance function built for one will fail the other. This scores the finance function against what a contract and an auditor actually require.
It covers the accounting system, indirect rates, timekeeping, billing and the documentation a buyer or the DCAA would ask for.
What to put in
- Whether the accounting system segregates direct and indirect cost by contract.
- Whether indirect rate pools and bases are documented and applied consistently.
- Whether timekeeping meets the daily standard rather than a weekly reconstruction.
- How quickly an invoice is raised after the work, and how quickly it is paid.
- Whether incurred cost submissions have been filed on time.
- What the last audit or review found, and whether it was closed.
How to read the answer
A weak score on rates or timekeeping is the expensive kind, because it can reprice work already delivered.
A weak score on billing speed is the cheap kind, and usually the fastest thing to fix.
Where it usually goes wrong
- Treating the accounting system as adequate because nobody has said otherwise. Adequacy is a determination, not an assumption.
- Leaving indirect rates unchanged for years while the cost base moves underneath them.
Questions this raises
If the score raises questions you cannot answer from the current books, GovCon CFO work starts by making the rate structure defensible.
Where this leaves your own numbers
If the rate structure, the timekeeping or the incurred cost submission raise a question you cannot answer from the books as they stand, that is the work. Start with the financial readiness diagnostic, or talk it through with us.
Book a consult →What this raises, and who handles it
The handbook explains the requirement. These pages are the work behind it.
- GovCon CFO workmaking the rate structure defensible
- Financial reportingthe monthly pack behind the rates
- Controller servicessomeone accountable for the system, not just the filing
If you want this done for you
What happens next
Knowing the requirement is one thing. Having a finance function that meets it every month, through an audit and through a sale, is the work.
- The call, twenty minutesYou describe the business and where the numbers are letting you down. We tell you honestly whether we can help, and what we would start with. No pitch deck.
- We look at the fileYou give us read access to the books as they are. We come back with what is wrong, what it will take to fix, and whether the answer is bookkeeping, controller work, or something else.
- A written scope and a priceWhat we do each month, what you get, the date it lands, and the fee. Agreed before anything starts, and it does not move without you agreeing it.
- Transition, then the first closeAccess, systems, and the opening balances. The first close lands on the date in the scope, and every one after it does too.
Averan is not a CPA firm and does not file taxes. Your CPA keeps that, and we keep the books they file from.