Budgets, Indirect Rates, & Proposals

3. Who We Are Left Brain Professionals is a boutique accounting firm that serves government contractors. We specialize in accounting systems and strategic services.

4. Copyright © 2014-2022 Left Brain Professionals Inc. Our Practice Areas ACCOUNTING SYSTEMS • Accounting System Design & Implementation • Monthly Support Packages STRATEGIC SERVICES • DCAA Audit Support • CFO & Controller Services

5. Our Team Robert E. Jones Principal GovCon Accounting Advisor CPA, CPCM, NCMA Fellow Steven Bressler GovCon Accounting Associate Steve@LeftBrainPro.com Robert@LeftBrainPro.com Copyright © 2014-2022 Left Brain Professionals Inc.

6. Learning Objectives Copyright © 2014-2022 Left Brain Professionals Inc. • List three kinds of budgets. • Describe three steps for preparing budgets. • Explain how budgets are related to indirect rates. • Identify when to update indirect rates as part of the proposal process.

8. Time for a Poll

10. Copyright © 2014-2022 Left Brain Professionals Inc. 3 Kinds of Budgets 1. Enterprise • Corporate budget for the entire organization • Includes direct and indirect costs What we find: • No enterprise budgets • Late budgets • Simply reusing last year's numbers

11. Copyright © 2014-2022 Left Brain Professionals Inc. 3 Kinds of Budgets 2. Project • Project budget focused on direct costs What we find: • Projects are not time-phased • No consideration for overtime • Missing direct costs

12. Copyright © 2014-2022 Left Brain Professionals Inc. 3 Kinds of Budgets 3. Proposal • Project-based budget for a proposal that includes direct and indirect costs • Enterprise budget and rates are adjusted for significant proposals

13. Copyright © 2014-2022 Left Brain Professionals Inc. 3 Kinds of Budgets What we find: • Backing into a total price instead of cost rollup • Missing or insufficient basis of estimate (BoE) • Using old rates • Indirect rates not updated for significant proposals Clients call because they cannot support their costs or rates during an audit.

14. Time for a Poll

15. Copyright © 2014-2022 Left Brain Professionals Inc. 3 Steps for Prep Budgets 1. Top Down • Revenue focused - identify direct costs necessary to support revenue • Backlog + • Weighted probability of outstanding proposals + • Other work

18. Copyright © 2014-2022 Left Brain Professionals Inc. Budgets & Indirect Rates • Enterprise budgets result in proposal and interim/provisional billing rates • Proposal budgets result in indirect rates for that specific proposal

19. Copyright © 2014-2022 Left Brain Professionals Inc. Budgets & Indirect Rates • Enterprise budgets (indirect rates) need revised (don't change the baseline) for: • Winning or losing a major contract • Other budget issues that cannot be resolved internally

20. Time for a Poll

21. Copyright © 2014-2022 Left Brain Professionals Inc. Update Rates for Proposal We cannot stress the importance of this topic enough Winning a significant contract (>20% of revenue) will have a significant impact on rates Define significant for your organization!

22. Copyright © 2014-2022 Left Brain Professionals Inc. Update Rates for Proposal Remember that direct costs drive all other rates Need to propose with "what-if" rates then adjust enterprise budget and other interim/provisional billing rates as necessary

23. Copyright © 2014-2022 Left Brain Professionals Inc. Our Budget Template What we're looking for: • Summary invoiced amounts for inception-to-date reporting • Invoice details (hours and rates by labor category) for T&M contracts • Public voucher numbers and details

24. Copyright © 2014-2022 Left Brain Professionals Inc. Looking Forward 1. Prepare budgets in September 2. Approve budgets in October 3. Submit new billing rates in November 4. Use new billing rates in January

26. Time for a Poll

28. Connect with us Download the presentation Left Brain Professionals Inc. @LeftBrainPro Email us Support@LeftBrainPro.com @LeftBrainPro Left Brain Pro LeftBrainPro www.LeftBrainPro.com/presentations

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