In order to survive and succeed in today’s business environment, contractors must assure that their contract administration personnel and finance team work closely together to streamline their processes and present a common message to government program managers, contracting officers and auditors with whom they interact on behalf of the company.
Often times CFOs, financial leadership, and other executives are making critical decisions based on inaccurate reports due to a disconnect in systems and communication. Often, teams are using their own tracking systems or spreadsheets. And it can be very challenging even answering relatively basic questions. For example, “which contracts have that new cybersecurity clause?”. Or which FAR clauses are applied to this particular contract? It’s even possible that if two experienced professionals responded to the same question, they might actually deliver different answers.
Auditors are documenting contract management deficiencies. It’s possible that there may be limitations in your current contract management processes. Elements of tracking might be stored in multiple places resulting in a lack of data integrity. Your current system of tracking may not be setup from the ground up to handle the detail the government needs for compliance. The DCAA encourages contractors to take the time and make investments to improve the precision of their finance and contract management systems
Are invoice rules setup correctly and automated? Ensuring that each contract’s invoice rules, format, and schedule are setup correctly is extremely important. When a client invoice doesn’t accurately match the underlying contract, the invoice is rejected, and payment delayed, driving up the daily sales outstanding. Fixing the issue can take hours from multiple departments to locate the contract data needed to correct the discrepancy and resubmit the invoice. Your financial system should be connected with key components of your contract lifecycle management system to make sure there is no breakdown or miscommunication in this process
In addition to the risk of having payment delayed because the invoice fails to match the underlying contract, contracting officers may disallow all or part of claimed costs that are inadequately supported. Do your current systems allow you to maintain adequate records proving that costs have been incurred, that they are correctly allocated to the correct contract or project, and that your system complies with the applicable cost principles? If you’re setup for success, your system will be optimized for all contract types, line items and contract task orders. It will track direct and indirect costs. It will collect cost by pool and calculate and allocate indirect costs by provisional, target, and/or actual burden rates. And it will allow for the identification of unallowable costs.
In order to get ahead of the challenges we just discussed, streamline & standardize processes, and reduce costs, leaders across the federal contracting industry are modernizing their business systems. A true Cloud ERP system like JAMIS Prime ERP breaks down barriers of communication, gives more people access to more data, helps drive collaboration and knowledge sharing between finance and contract management, and helps push organizations and people to new levels of success.
Find out how JAMIS Prime ERP can help your finance and contract management organizations break through traditional barriers with a strong foundation for future growth in our On-Demand Webinar Video View Now >
