While it is difficult to estimate the exact number of accounting software packages available on the market today as new systems are continuously developed, there are literally hundreds if not upwards of a thousand accounting system options to choose from. Popular entry-level systems such as Intuit QuickBooks, Xero and Zoho Books are typically the default options for start-ups without much thought given to the suitability for government contracting requirements. On the high-end of the scale, you have all-encompassing ERP (Enterprise Resource Planning) options including SAP S/4HANA, Microsoft Dynamics, and Oracle ERP Cloud. And then there are hundreds of lesser-known "vertical" accounting systems that are designed for particular industries, such as US Government Contractors. Regardless of which system you ultimately select for your business, and even if it is not designed for FAR Compliance, you have a reasonably good chance of passing a DCAA pre-award audit that is centered on the SF1408 checklist as illustrated in "DCAA Pre-award Audit Looming? No Need to Panic!"
That said, the burning question you should ask is, "How many external manual processes are acceptable and cost effective?" When you prepare your initial SF1035 public voucher you will undoubtedly experience first-hand the need for software that can readily accommodate cost reimbursable, flexibly priced contract invoices. Before long, the time will come to prepare your annual Incurred Cost schedules in support of your claimed versus actual costs. Is your accounting software able to produce the output you need to make that process more accurate and less time consuming? Here are some key considerations when evaluating a new accounting software package when you're operating in the GovCon space::
Labor Distribution/Total Time Accounting
Incurred Cost Electronically (ICE)
Service Contract Act reporting
Public Vouchers (SF1034/SF1035)
Limitation of Funds Tracking and Reporting (FAR 32.704)
VETS-4212 reporting
Funding by CLIN & SLIN
Contract Funding Modifications
Multiple Contract Revenue Types
Multi-Tier Indirect Rate Structures
While it is true that your accounting software choices are plentiful and the various requirements promulgated by the FAR and CAS might be of secondary or tertiary importance when making your selection, the reality is that you have few options available unless you elect to shy away from lucrative flexibly-priced contracts using a cost build-up model. If the system you select for your cost accounting needs doesn't include at least some of the above features, then you might just end up experiencing buyers remorse.