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CFO Services

CFO services for government contractors

Indirect rates, provisional billing and timekeeping discipline: the financial structure a contractor needs before the government asks to see it.

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Government contracting has a financial architecture that commercial businesses do not. Your indirect rate is not an internal metric, it is a number you bill against, defend, and true up annually with the government. Set it badly and you either starve cash flow for a year or accrue a repayment liability you did not plan for.

This is the layer above compliance. DCAA-compliant accounting makes your system adequate; this makes it work in your favour.

What we handle

  • Indirect rate structure: how many pools, how they are allocated, and whether the structure suits your actual cost base
  • Provisional billing rates: negotiating and monitoring the rates you bill at during the year
  • Rate monitoring through the year, so the true-up is not a surprise
  • Incurred cost submissions: the annual reconciliation, due six months after fiscal year end
  • Unallowable cost identification under FAR Part 31, tracked as you go rather than reconstructed
  • Contract-level profitability, so you know which contracts actually make money
  • Pricing support for proposals and forward pricing rate proposals
  • Cash flow planning around government payment cycles, which are not commercial payment cycles
  • Preparation for the transition from firm-fixed-price to cost-type work

The provisional rate trade-off

Cost-reimbursable contracting

Because actual indirect rates are unknown until the year closes, you bill during the year at provisional rates agreed with the government, then reconcile through the incurred cost submission.

Set them too low and you under-recover all year, financing the government's work out of your own cash, with the true-up arriving months later.

Set them too high and you create a repayment liability, and potentially an awkward conversation with a contracting officer.

Getting them close is a forecasting exercise, and it is one of the highest-value pieces of work a CFO-side advisor does for a contractor.

Keep reading

Audit Preparation

DCAA compliance

 Service

Accounting

 Service area

El Segundo

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CFO Services

Common questions

Not answered here? Ask us directly: we would rather explain it than have you guess.

We are pre-revenue with one SBIR Phase I. Is this premature?

For the full CFO engagement, probably. For the structural decisions, no. The chart of accounts and timekeeping decisions you make now determine how painful Phase II and any cost-type work will be. Setting them up correctly at the start costs very little; retrofitting them across two years of history is expensive and it is the sort of thing that delays an award.

How many indirect pools should we have?

It depends on whether your cost base genuinely behaves differently across categories. A simple contractor might run a single overhead pool plus G&A. A contractor with a material on-site versus off-site cost difference, or significant material handling, may need more. More pools mean more precision and more administration. The right answer is the simplest structure that allocates costs fairly: because a structure that over-allocates to government work is one the government will challenge.

What is an incurred cost submission and when is it due?

An annual reconciliation of your actual indirect rates to the provisional rates you billed at, due six months after your fiscal year end for contractors with cost-type work. It is a substantial schedule-based filing. Submissions found inadequate are returned, and repeated inadequacy creates real friction with your contracting officer, and can hold up final payment on closed contracts.

Can you help us bid more competitively?

Within limits, and honestly. Your rates are what they are, but the *structure* determines how they land on any given bid, and a structure that fits your cost base can make you meaningfully more competitive on the work you actually want. What we will not do is help construct a rate structure designed to shift cost onto government contracts. That is exactly what FAR Part 31 and DCAA exist to catch.

How do we start?

Book a scoping call using the form on this page, or call us. We will ask what you need, who is asking you for it, and what condition your records are in, then tell you what the engagement involves and what it will cost before anything begins.

Book a scoping call

Twenty minutes, no charge. Tell us what you need and we will tell you what it involves, what it will take, and whether we are the right fit for it.

  • A short call with the person who would actually do the work.
  • A clear scope and a fixed quote before anything begins.
  • We reply to every enquiry within one business day.

Prefer to talk now? Call (310) 220-0248
Monday to Friday, 9am to 6pm PT

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Free resource

The SF 1408 readiness checklist

SF 1408 is the form a DCAA auditor fills in about your accounting system. The checklist is the same list, restated as things you can go and check in your own ledger this week.

  • Segregating direct from indirect cost, and the account structure that proves it
  • Timekeeping that survives a floor check
  • Pooling and allocating indirect cost consistently
  • Excluding unallowable cost under FAR Part 31 before it reaches a bill

There is no instant download. A person sends it, usually the same working day.

We email you this one document and nothing else unless you ask. We do not share your details, we do not add you to a sequence, and one reply saying stop ends it.