Easy and Simple Tricks for Hassle-Free Unallowable Cost Accounting
There are some laws and regulations that allow the government to not reimburse contractors for certain types of costs called ‘Unaccountable Costs’. According to the regulation, the government may not negotiate a fixed price based on cost or pricing data, which also include unaccountable costs. Those contractors passing such costs onto the government, deliberatively or unknowing, will be penalized Costs can be made unallowable by regulation (Federal Acquisition Regulation (FAR) Subpart 31.2), by statute or by contracting officer decision.
For government contractors, schools, colleges, non-profit organizations, it is very important to comply with the regulation while cost accounting. The FAR 31.2 governing regulation for unallowable costs, general accounting practices, and other financial rules can be invoked by the government any time as required. In addition, there are other similar regulations that you need to comply with at the time of cost accosting. Or you will be subject to be penalized.
As a government contractor, you have to abide by these regulations. Failure to comply with FAR 31.2 results in significant burden and financial exposure. The compliance is mandatory and you should put in cost accounting system, policies/procedures, and cost accounting practices. The whole process may seem to be very complex and take you a lot of time and skills. And chances to make an error with an account in compliance with the regulation are high if you are not replete with the sufficient information and skills. So hiring renowned unallowable cost accounting experts is absolutely a good idea.
As important as this subject is, there are few resources available to small business contractors that explain the requirements in universally understandable terms. Of which, a few are really reliable. So it seems difficult for a business organization looking cost accounting solution. Choosing a cost accounting expert who can provide you with the right questions pertaining to FAR 31.2 or for a deeper understanding regarding unallowable costs can become a little easy if you start searching at the right places.
And there may not be a way better than the internet. If you have an internet access, you can easily find a government contracting consultant who has a track record of providing reliable cost accounting for government contractors and agencies like schools, colleges, non-profit entities, etc.
Also, you should ask for your friends and family members who have used cost accounting services. You can ask them to provide you with a suggestion for choosing an accounting expert who can help you do cost accounting in the compliance with the regulations. However, do everything you can on your part in order to make sure you choose the right accounting expert for your business cost accounting. If it is possible, make a list of more such service providers. And then compare their prices, considering other factors as well such as experience, expertise, clients, and the likes. You will be able to make the right decision.
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