Most of the planet is ready to toast to better days in 2021. Your GovCon firm can take concrete actions right now to set yourself up for the new year.
In part 1 of our fiscal year-end closing series, we took you through comprehensive Costpoint close-out guidelines. Below we offer eight tips to lay the groundwork for an organized financial procedure before you begin processing in the new fiscal year. Although the details pertain specifically to Deltek’s Costpoint, some of these basic concepts apply to Government Contractors and should be reviewed within their specific accounting software.
Your 8-Point Processing Plan for the Fiscal New Year:
1. Set Up New Fiscal Year Information on the Manage Fiscal Years, Manage Accounting Periods, and Manage Subperiods Screens
Complete these tasks before you begin processing in the new year. Make sure that the entry edit status for your transaction screens is set to “open” so that you can begin to enter transactions.
2. Set Up Allocation Group One for the New Fiscal Year
Update the Allocation Group Number field to 1 on the Manage Allocation Groups screen to reflect pool structure changes so that you can calculate indirect rates in the new fiscal year. You must perform this step before you can clone your pools.
3. Clone Cost Pools
Clone all cost pools so that you can calculate indirect rates in the new fiscal year. Keep in mind that you should clone the first screen of the cost pool (the Manage Cost Pools screen) and use the Save/Continue option on the File menu to clone the subtasks. If you do not do this, the result is partially cloned pools.
However, you should generally not clone the Pool Rates subtask because rates are usually different between fiscal years. You will set up your pool rates in Step 4 below. See Manage Cost Pools for more detailed information on cloning pools.
Note: The Clone function does not copy Service Center subtask information.
Deltek recommends that you keep the same pool numbers from one fiscal year to the next because the pool numbers are used for printing purposes on the Project Status report. Do not reuse a pool number in a subsequent year for a different kind of indirect expense.
4. Enter Target and Provisional Rates in the Pool Rates Subtask
Rather than clone this subtask (on the Manage Cost Pools screen), enter the target and provisional rates for the new cost pools created in Step 3 for the new fiscal year because rates typically change each year.
5. Bill Prior Year Costs Correctly
If you incurred costs in a prior year that you need to bill in the current year, Costpoint applies the correct provisional rates based on the year in which you incurred the costs. If you want to bill these costs on the same invoice, they will be properly burdened. You may, however, want to bill them separately so that you can easily determine the rates that were applied. Retroactive billings for rate revision purposes are available in Costpoint Billing.
6. Clone Burden Ceilings/Overrides
Clone your burden ceilings and overrides on the Burden Cost Ceilings screen in Manage Project User Flow. These records are tied to a specific fiscal year, so you need to set up a new fiscal year for each project as necessary, and add the new fiscal year’s ceiling and override data.
7. Check Billing Formats
Check your billing formats on the Manage Generic Billing Formats screen to see if you listed any fiscal years in the Accounts subtask. If you did, add new lines with the new fiscal year. You can leave the Fiscal Year column in this subtask blank if you want to include all fiscal years. If you did so, you can skip this step.
8. Choose a Default Budget Revision If Necessary
If you use budgets, enter new budgets and choose a new default budget revision so you can include budget information on project reports.
If you’re running late on year-end closing tasks, there’s still time to set your financial records straight. Call on the GovCon experts at CAVU to help you get ready for a prosperous new normal in 2021.