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The chart of accounts is the foundation on which you will build your DCAA compliant accounting system. Like building a house on a weak foundation, your accounting system will not stand up to a DCAA audit without a strong chart of accounts.
The chart of accounts is a list of general ledger accounts, grouped by their function within the accounting system. Each general ledger account will hold individual transactions based on the type of account.
I developed a standard GovBooks Chart of Accounts that will pass DCAA audits and is designed for use with QuickBooks Online. Variations and customizations are permitted, as long as the chart of accounts meets DCAA requirements by fairly allocating indirect expenses to cost objectives such as a contract. Civilian agencies such as NSF, NIH and DOE, among others, have a slightly different format but follow the same accounting principles.
The GovBooks Chart of Accounts can be imported directly into QuickBooks Online or it can be manually entered into the chart of accounts screen in QuickBooks Online. From there, it is automatically imported into your GovBooks application when you sync QuickBooks Online with GovBooks.
You can download a free excel-version of the GovBooks Chart of Accounts to be uploaded into QuickBooks Online or used as a guide.
The chart of accounts is a listing of general ledger accounts organized by account type. In a typical chart of accounts, you will find a balance sheet section with assets and liabilities, an equity section, and an expense section. The chart of accounts utilized in government contracting has some similarities to the typical chart of accounts utilized by commercial enterprises, and the balance sheet and equity sections are nearly the same, but the similarity ends there.
The expense section is very different in government contracting when compared to the expense section of a commercial enterprise. In the expense section of a government contractor’s chart of accounts, you will find that the expense accounts are further divided into standard subsets such as direct costs, fringe benefits, overhead, facilities, general and administrative (G&A), and unallowable expenses. These subsets are utilized to represent cost of sales, intermediate and final indirect expense pools, allocation bases, and expenses segregated from the government contracting business. These subsets are standard to the industry of government contracting and are universally recognized by industry accountants and DCAA auditors alike.
How to import the Govcon Chart of Accounts
After you download the GovBooks Chart of Accounts, you can manually enter the new chart of accounts, or to save time, you can import the excel-version into QuickBooks Online by following these steps:
Step 1:
Download the free GovBooks Chart of Accounts.
Step 2:
In QuickBooks Online, navigate to "Chart of Accounts" and click on the down arrow on the "New" button and select "Import".
Step 3:
Click on the "Browse" button and select the GovBooks Chart of Accounts that you have downloaded. Then click "Next".
Step 4:
Map the fields from the file to be imported to the QuickBooks Online fields. Then, click on "Next".
Step 5:
Review the accounts to be imported. You may unselect any that you don't want imported, change the "Type" or "Detail Type". The click on "Import". Your new GovBooks Chart of Accounts will be uploaded. You may then want to inactivate older accounts.
