Think about it: When your bank works with government contractor (GovCon) clients, much of your success depends on their success. Whether they want to borrow, invest, or take advantage of specialized banking products, GovCons must produce the data to demonstrate they are well-positioned to do business with your bank.
Enter companies like CAVU, with almost two decades of experience in GovCon accounting and finance combined with custom-made software tools to conduct enterprise-wide financial management with a few clicks. Here is how that benefits your bank:
5 Reasons Why Expert Accounting Means Better Business for Banks
1. Accurate Monthly Financials
GovCons have core accounting data needs such as cash and receivables, income statements, invoicing, and bank reconciliation. As a banker, you need to see accurate, detailed versions of this data to assess creditworthiness and reduce risk. A CAVU client can routinely pull together these numbers in a consistent format with a few clicks.
However, doing business with the government also has unique accounting requirements. Indirect rate-setting is one example. These rates are based on indirect costs—the fringe, overhead, general and administrative, and other allowable indirect pool costs that apply to government contracts. GovCons must get indirect rates right in order to thrive. CAVU’s indirect cost model displays rate data, along with other performance indicators, so GovCons can set rates that earn a profit. And a profitable GovCon means less risk and more opportunity for your bank.
2. Improved Cash Flow Management
CAVU understands the ins and outs of government contract funding cycles, including the timing for invoicing, payment, and collections. Our systems streamline processes so GovCons get paid faster and avoid receivable collection delays. This improves the company’s working capital and bankers’ confidence in clients meeting repayment obligations. Meanwhile, this operational efficiency allows GovCons to focus on winning contracts and executing projects.
3. Clearer Insights, from Granular to Future-Focused
CAVU has the knowledge and software tools, including the latest financial planning and analysis (FP&A) system for GovCons, to uncover insights into project profitability, contract performance, and cost structures. In addition to going deep, CAVU helps GovCons use their historical data, contract pipeline, and market conditions to forecast future growth and opportunities. This is music to your banker ears, because when clients project a profitable financial future, you have less worry about repayment risk and more opportunity for future business.
4. Regulatory Compliance
Another unique requirement that affects GovCon finances is regulatory compliance. Some of the most ubiquitous rules for government contracting are the Federal Acquisition Regulation (FAR)—which lays out requirements for bidding, contract formation, and performance—and the Defense Contract Audit Agency (DCAA)—which monitors cost allocation and financial reporting. Non-compliance challenges can quickly wreak havoc on a GovCon firm’s cash flow and marketing strategies, not to mention cause banking complications. CAVU sets up GovCon accounting systems and rate structures for regulatory compliance, conducts independent compliance reviews, and provides audit preparation. GovCons have more time to focus on business strategy and your bank has less concern over fraud and mismanagement.
5. Technology That Scales and Integrates
CAVU breaks down silos and tech integration issues with a suite of software based on the latest features for GovCon and other project-based businesses. This benefits your bank because you—and your GovCon clients—can skip the apples-to-oranges translations between data systems and financial reporting formats. CAVU’s FP&A software, Unanet, Deltek, QuickBooks, and other widely used financial and accounting tools play well with each other. Besides in-depth, consistently formatted reporting, these tools also reduce manual errors, speed up reporting, and provide real-time financial insights.
When your GovCon clients hire a firm well-versed in government accounting and finance, your bank can also reap the benefits of accurate data, reduced risk, improved cash flow management, and clearer financial insights. Feel free to contact CAVU for more information on how our services can help you build better banking relationships with your GovCon clients.