DOD SBIR/STTR Training & Advocacy

To run a business you need data, records, reports, analysis, accurate information about assets, debts, liabilities, profits; and that is why Accounting is Importance for any business activities.

ACCOUNTING

 
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SBIR/STTR Program & Accounting

The training material below highlight key areas that small businesses must understand as they submit proposals for Phase I and II SBIR/STTR awards.

government audits

Many small businesses start off with hopes of minimizing their risk of failure. One key opportunity to doing that is proper handling of the business’s accounting. If a company is not in the know of it’s past and current spending, how will it be in control in the future? Thus, learning how government auditing works is crucial for the success of the business because it allows for government to track the money and its spending in one project. Access our Tip Sheet on this subject by clicking HERE.

INDIRECT RATE DEVELOPMENT

As you work on preparing and negotiating your project budget for SBIR/STTR, you’ll need to determine your indirect cost (IDC) rate. This rate calculates the portion of your business’ total indirect costs that go toward supporting your SBIR/STTR and must be evaluated on an annual basis (for Phase II). Access our Tip Sheet on this subject by clicking HERE.

Practical Strategies for Rate Development

In this Tip Sheet we present an overview of the different cost types and how their relationship to purposed indirect rate types, the negotiation process and preparation. Access our Tip Sheet on this subject by clicking HERE.

Quickbooks and Compliance

It is critical for the success of your project that you manage your financial records in accordance with federal guidelines. Compliance is not optional; although you may never be audited during your SBIR/STTR, the consequences of being found noncompliant include fines or penalties, getting suspended from the grant program, and loss of intellectual property rights. QuickBooks, a common accounting tool, can help you keep track of your finances to comply with federal standards with some minor customizations. Access our Tip Sheet on this subject by clicking HERE.

FREQUENTLY ASKED QUESTIONS REGARDING BUDGETING BASICS

Many SBIR/STTR applicants underestimate the importance or difficulty of the cost proposal portion of their Phase I or II submission. Errors made here usually result in financial losses to the applicant, and reductions in the SBIR/STTR award amount, both of which are detrimental. Therefore, in this series of four modules, SBA introduces you to the basic concepts, terminology, and practices that should go into developing and defending your cost proposal.To access, click HERE - clicking this link will redirect you to reference material provided by the U.S. Small Business Administration.

WHAT ARE THE REQUIREMENTS OF AN APPROVED ACCOUNTING SYSTEM?

The expectations regarding the sophistication of a small business’ accounting system changes between Phase I and Phase II. With Phase I SBIR or STTR awards, the Federal government usually expects the small business to have a basic system, as the Phase I awards are relatively small. In Phase II, however, the Federal government has higher expectations. One reason is because a Phase II is for a lot more money—around $1 million, versus only $150,000 in Phase I. The contracting officers need to be confident that you have, among other things, accurately estimated your indirect rate. The ability to calculate a good indirect rate comes from a good accounting system that differentiates direct from indirect costs, and isolates unallowable ones. To access, click HERE - clicking this link will redirect you to reference material provided by the U.S. Small Business Administration.

 

 

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    WHAT ARE ELIGIBLE AND INELIGIBLE EXPENSES?

    In this tutorial we will address this question of cost acceptability. There are two categories of acceptability. The first is allowability, while the second is eligibility. Allowability is based on what the Federal Acquisition Regulation (FAR) says, adjusted by an agency’s supplemental policies, rules or regulations. Eligibility is defined here as limits imposed by individual agencies on SBIR/STTR awards, or on Phase I (vs. Phase II) awards. To access, click HERE - clicking this link will redirect you to reference material provided by the U.S. Small Business Administration.

    AN OVERVIEW OF AUDITS FOR DOD SBIR/STTR AWARDEES

    The Defense Contract Audit Agency (DCAA) is charged with verifying compliance of the financial systems for contractors working for the Department of Defense. However, there are many different ways, and many different elements of a business the DCAA is required to examine. In this tutorial we will provide a brief summary of the different kinds of audits DCAA conducts including: (1) Pre-award audits; (2) Post-award audits; and (3) Contractor business system audits. To access, click HERE - clicking this link will redirect you to reference material provided by the U.S. Small Business Administration.

    INCURRED COST PROPOSALS AND AUDITS

    In this Tutorial, we are going to focus on Incurred Cost Proposals and Audits. This is one of the more important post-award audits. An Incurred Cost Proposal (ICP) is a report of your actual indirect expenses that you are required to submit annually when you have a Cost Reimbursable contract. Your actual incurred costs need to be submitted within six months of the end of your fiscal year. Therefore, if your fiscal year ends on December 31st, which many small businesses do, that means your incurred cost report is due on June 30th of the following year. To access, click HERE - clicking this link will redirect you to reference material provided by the U.S. Small Business Administration.

    THE ROLES OF DCMA AND DCAA WITH DEPARTMENT OF DEFENSE AWARDS

    Before discussing the audit process, it is important to understand the roles of two organizations that play a pivotal contracting function for the Department of Defense (DoD) – these are the Defense Contract Management, Agency also referred to as DCMA, and the Defense Contract Audit Agency, also referred to as DCAA. DCMA’s mission is to assure that contractor supplies and services are delivered on time, at projected cost, and meet all performance requirements. To access, click HERE - clicking this link will redirect you to reference material provided by the U.S. Small Business Administration.

    HOW TO PREPARE FOR A SUCCESSFUL DCAA AUDIT

    Let’s assume that you’ve just been notified that DCAA is sending an auditor to your facility. Everyone is apprehensive the first time they receive this news. But there are a number of ways that you can reduce the stress both in preparation for an audit and as the audit is occurring. Knowing what to expect during an audit gives you the opportunity to prepare properly and have the confidence to answer even the most demanding audit questions. To access, click HERE - clicking this link will redirect you to reference material provided by the U.S. Small Business Administration.