Government vs Industry My next set of categories are not in order, so pay attention! Top 10 – Lockheed, Boeing, GenDyn, Raytheon, Northrop, SAIC, Booz, Harris, L-3 Under $10M $10M - $50M $50M-$100M $100M+ Prior to your career in government contracts Business background Accounting background Marketing background Science or technical History, Literature, or Arts
There is dark chocolate for you in your seat and a card with a website and password at the bottom for you to get more information on this session.
What are some other positives from today? A birth, marriage, anniversary, vacation,…?
Safety is an issue, no matter our environment - home, office, or on travel. Floods, fires, falls, health emergencies, and other natural disasters can occur at any time.
Knowing where the fire extinguisher and AED are located! Fire alarm system. Tornado shelters are important in my geographical area! In my past, I had to be aware of hurricanes and emergency evacuation routes.
As a fitness instructor, I know the value in frequently sharing safety tips.while the instruction should be positive and focused on the things to do, it&apos;s often quite as important to point out the things not to do.
What are some safety tips you can share from your work or personal life? WAWF Changes 508 compliance
How many of you are accountants by trade or training? How many are contracting professionals by trade or training? How many of you are hybrids - you studied and/or practiced both.
Intrigued by the title? What are your preconceptions about this session? WHY ARE YOU HERE????
You came to learn something new.
What do you think of when you see this picture? How does it make you feel? Is this a picture you thought you would see in a presentation at an NCMA conference?
Let&apos;s look a little deeper and see how the story goes
Scene 1 (Villain and Hero) Villain - lack of knowledge Hero - manager who guided me
Can you identify the accounting requirements in contracts? Early in my career, I could not. TAKEAWAY #1 - identify accounting requirements in contracts My Story College - I studied and learned the basics of accounting. Luckily, one of my professors was of the mindset that test questions should not come out of book, so his did not. Many students balked and complained when the test questions did not match the homework or questions covered in class. Oh, they were crafted around the same topic and issues, but always with a little twist. I respected Dr. Gary Odom then, and I respect him even more now. He said that life&apos;s questions and answers would not come from a textbook, that we would need to know how to apply concepts and principles to our work, and that he was going to do his part to prepare us.
Accounting was a make it or break it class in the business school curriculum. Students either passed, loved it, and went on to major or minor in accounting, or they got their &quot;C&quot; and were happy to be done with accounting. I went on to take several more accounting courses,including more with Dr. Odom, but about 3 weeks from graduation, I had an eery encounter with a friend.
One of my good friends, a study buddy, looked at me one Saturday morning while sitting around her breakfast bar with books spread out, and said, &quot;you&apos;re not an accountant!&quot; Looking around, I said, &quot;what?&quot; Then I said, don&apos;t tell anyone. I&apos;m 3 weeks from graduation and I can&apos;t stop now!
Greer & Walker Fast forward about 3 months, I finished and graduated, and landed my first job at a regional accounting firm in Charlotte, NC. It only took me one day to know I was in the wrong firm and only a few days to know I was in the wrong field. My friend had been right. My tenure as a staff accountant in the tax division of a public accounting firm lasted 6 months. While I was devastated to lose my job, I was happy to free and began my job search for anything other than accounting. I spent the next 3 years in jobs with primary responsibility for things other than accounting, but I kept seeing my accounting (and business) skills come into play. I spent two years in the cell phone industry as a retail store manager and a stint as a controller for a small chain of cell phone stores. Oddly enough, it felt natural and easy, and those skills of &quot;transferability &quot; (bring able to apply concepts and principles) enhanced my career and set me apart from my colleagues.
Then September 11 happened. I lost my job and I was soon competing for work with people who were way more qualified than me. I realized I had to do something, so I went back to school…for…accounting. I got an MS in Accountancy and soon landed a job with a government contractor. At the time, that didn&apos;t mean anything to me. But I would soon learn that government accounting and the knowledge of the contracts that influence them would be vital to my career.
To be clear, many or most accounting concepts apply across the board - across government and commercial, across industries. Government rules and regulations put a new spin on the application and interpretation of those concepts. Take total time accounting as an example.
Atlas I took a job as an accounting analyst and grew into an accounting manager. I had a manager who explained my need to understand how to read contracts if I was going to be at government accounting. She spent time with me showing and teaching me, and later letting me do some contract stuff on my own.
MAETS I put my new skills to work with An opportunity to start with a new business from day one. An opportunity to set up the accounting and contracts systems properly to make life things like ICPs and audits easier.
Pole/Zero I enhanced my skills with advanced transferability of concepts with An opportunity to work with a growing defense manufacturer who switched from small business status to large and became subjected to new and changing regulations. My tenure has been focused on the growing pains of government contractor. HOW DOES MY STORY HELP YOU? That takes us to Takeaway #2
dScene 2 (Villain and Hero) Villain - lack of knowledge Hero - you for learning and knowing what to look for
So, what about you? Do you know what to look for? Do you want to learn?
Do you know the impact of your contract clauses on the accounting department? For example, FOB Origin vs FOB Destination and effect on revenue recognition? TAKEAWAY #2 - 5 key accounting phrases for contract managers Cost elements (#2-a)
As a contracting professional, do you know the basic types of costs? When you ask a contractor for information, do you know what you are asking for?
Direct Material Labor Travel ODC Subcontractor If a contractor talks about rates and pools, do you know what they mean? Indirect Fringe OH G&A
Cost or pricing data (#2-b)
Do you know what cost or pricing data is? We could teach an entire NES on cost or pricing data, with half of the day spent on the term “certified.” While knowing the difference between certified cost or pricing data and other than certified cost or pricing data is important, it is beyond the scope of this session. Make a mental note to follow-up with me afterwards for a more in-depth conversation. In simplest terms, cost or pricing data is merely transactional information, and is most often historical actual information.
Cost or price analysis (#2-c)
When you are making a determination of fair or reasonable pricing, do you know what data you are reviewing? Are you doing a cost analysis or price analysis? What&apos;s the difference? As a contracting officer or prime contractor, you need to make a determination of fair and reasonable pricing that is based upon market research or competitive bids. If the item being acquired IS a commercial item, the seller is exempt from providing certified cost or pricing data, but not exempt from providing data to support to their price in the absence of market prices or competitive bids. With the conversation so far, has your answer to the last question on the screen changed in this session?
HOW MANY OF YOU ARE FAMILIAR WITH THE 6 BUSINESS SYSTEMS? CAN ANYONE NAME ALL SIX? Six Business Systems (#2-d) Of the six business systems defined in DFARS, which is the most important? How many of the systems are accounting oriented? While all six systems are only required for CAS covered contractors, it is expected that every contractor will have at least an accounting system. Due to the volume or nature of the contracts, many contractors will have some forms of the other systems. I would argue that development of all 6 business systems is a best practice for all contractors. Especially those who are growing and intend to pursue larger, more complex contracts.
How many of those were accounting based??
HOW MANY OF YOU ARE SMALL BUSINESSES? HOW MANY ARE LARGE? Do you think it matters? How many of you have entire departments of people dedicated to accounting, costing, proposals, and contracts? I know the Top 10 do. But what about you? Do you have a team of accountants dedicated to assist contract management? Even if you do, does that negate your professional responsibility to understand your job as much as possible? Small vs Large Business You might be thinking, What if we have departments full of people dedicated to these functions? CAS(#2-e)
Yes, accounting and contracts together! Maybe it’s a team effort. Maybe it’s a cross-functional training effort. The more each knows about the other, the better the end result. In contracts, do you consult with accounting when pursuing new contracts to ensure compliance and ability to capture costs, invoice, and provide reports as needed? Or, do you just accept the contract and toss it over the wall? I want to circle back to the philosophical and emotional aspect of this session – where I started. There are lots of opportunities for technical training and seminars filled with FAR references, yet devoid of something meaningful you can carry home in your heart. I want this to be a session that causes you to think and look at your job, or your organization, a little differently. I want you to see beyond the checkboxes of contract administration, and really understand what happens to make it all work together – accounting!
If you have heard me speak before, you’ve heard me talk about starting with the end in mind. Take the list of 6 business systems and do an evaluation in your organization. Are you ready for an audit? Are you even ready to accept a contract with those requirements? Let’s take one last look at some contract terms through our new accounting lenses.
I’ll bet everyone in here knows the basic difference of these contract types, but can you explain the difference to me in accounting terms?
What if you went to work tomorrow and were asked to be part of an ERP implementation, did you learn anything today that would change your perspective? What are some questions you would ask the team or organization? Are there any fundamental items that stick out? If you were part of the team selection process, where would accounting and contracts be? How involved in the process? Remember, EVERY transaction in your business is reduced to dollars and hours and stored as a transaction in your accounting system.
I know I shared earlier how both chocolate and Left Brain Professionals are good for you. But I&apos;m wondering if there is one more way chocolate can thread through our conversation today and in the future. &lt;PAUSE&gt;
Will you please consider becoming chocolate for me? Your questions, comments, and feedback are as good for me as dark chocolate is good for you. But, I can&apos;t get that feedback unless I have a way to reach back out to you in the future.
So, if you are willing, on your way out of the room, you&apos;ll see two bowls. One filled with chocolates for you to enjoy and a second bowl that&apos;s empty. If you&apos;re willing to give me feedback on the topics discussed today or have topics about which you would like to learn more, drop your card in the empty bowl and I&apos;ll be in touch. You can also sign up for my newsletter on the iPad. Your questions, comments, and feedback increase my brain activity, elevate my mood, and promote my health in a variety of ways. Your business card will be the best way for that to happen. So, just drop it in the bowl and I&apos;ll be in touch. Either way, enjoy the chocolates.
C05 Accounting for Contract Managers: The True Love Language of Contracts!
Accounting for Contract Managers:
The True Love Language of
Breakout Session # C05
Robert E. Jones, CFCM, CCCM
Consultant & Speaker
Left Brain Professionals Inc.
Monday, November 3, 2014
3:45pm – 4:50pm
Types of Transactions
A Record of Transactions
A contract is an agreement for a series of
Contracts are the vehicle for communicating
the accounting (cost and price data)
information and requirements.
Do you need to understand contracts to
better understand accounting?
Do you need to understand accounting to
better understand contracts?
Six Business Systems
1. Accounting and Billing Systems
(DCAA, DFARS 252.242-7006)
1. Contractor Purchasing System Administration
(DCAA, DFARS 252.244-7001)
1. Cost Estimating System
(DCAA, DFARS 252.215-7002)
Six Business Systems
4. Contractor Property Management System
(DCMA, DFARS 252.245-7003)
4. Material Management and Accounting System
(DCAA, DFARS 252.242-7004)
4. Earned Value Management System
(DCMA, DFARS 252.234-7002)
Small vs Large Business
Are there different requirements for different
sizes of businesses?