Accounting Policies and Procedures

Most policies and procedures for a compliant system, at a minimum, include the broad categories of internal controls, financial management, accounts receivable, accrued liabilities, revenue, cost accounting, compensation and cost estimating. You would not need every possible policy and procedure, but rather some basic ones.

You do not have to go to the trouble of preparing a Cost Accounting Standards (CAS) Disclosure Statement, although doing so would give you the framework for your policies. Actually your policies will be reflected in your CAS Disclosure Statement when you are required to complete one. Before you embark on composing a CAS Disclosure Statement, take on writing accounting policies and procedures.

Oftentimes, Government contractors think they have adequate policies and procedures. What they are typically referring to is their employee manual which has HR policies. Sometimes those HR policies can also be turned into some accounting policies but you must be diligent about approaching them from an accounting standpoint. DFARS 252.242-7006 (a) (2) defines a “Contractor’s system or systems for accounting methods, procedures, and controls established to gather, record, classify, analyze, summarize, interpret, and present accurate and timely financial data for reporting in compliance with applicable laws, regulations, and management decisions”.

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