FloQast vs. AuditBoard for Federal and Defense Contractors

Overhead, fringe, and G&A pools each accumulate specific cost categories that then allocate to contracts based on a defined base, and a pool that isn't reconciled to the general ledger monthly means the provisional billing rates charged to the government all period are working off numbers that might not hold up once the actual rate is calculated. Reconcile each pool separately, tie it to the ledger every month, and compare the provisional rate against the trending actual rate so a significant variance gets caught and communicated before the annual incurred cost submission, not discovered during it.

Labor charged to a specific contract has to be supported by a timesheet the employee entered and approved themselves, on the day the work was performed, with any correction documented and separately approved, a standard significantly stricter than most commercial timekeeping systems enforce by default. A reconciliation that ties labor cost in the ledger back to approved timesheets monthly catches a system or process gap before it becomes a finding in a government audit.

Cost Accounting Standards, where they apply, care as much about whether your company applies its stated cost accounting practices consistently period over period as whether any single period's numbers are technically correct, so a change in how a cost is classified or allocated needs to be documented and, in some cases, formally disclosed, not made quietly. Confirm CAS applicability and disclosure requirements for your specific contracts with a government contracts specialist, since the rules depend on contract type and dollar thresholds that change.

Indirect rate pool reconciliations, labor-to-timesheet tie-outs, and monthly variance tracking against provisional billing rates are recurring, checklist-driven work that fits FloQast's model well: a named preparer and reviewer per reconciliation, with a variance that stays open until explained, instead of a controller reassembling the rate picture from scratch before every incurred cost submission.

A government contractor's compliance expectations go beyond reconciled numbers into documented, testable controls almost by default, given how DCAA-style audits and incurred cost reviews actually work, which makes AuditBoard's controls library relevant earlier here than in most other industries: who reviewed each pool allocation, who approved each timesheet correction, and on what cadence, held as evidence a government auditor can sample directly.

• If indirect rate pool and timekeeping reconciliations are the recurring mess at close, start with FloQast to get the mechanics right first.
• If your business has already been through, or is preparing for, a DCAA audit or incurred cost review, AuditBoard's formal controls library is likely worth building now rather than after the first finding.
• If CAS applicability to your specific contracts hasn't been confirmed with a specialist, resolve that question first, since it determines requirements no reconciliation tool can substitute for.

Say your overhead pool's provisional billing rate is set at the start of the year, and by the third quarter, reconciled pool costs against the ledger show the actual rate trending meaningfully higher than what's being billed to the government on active contracts. Left uncorrected until the annual incurred cost submission, that gap means the government has been underbilled all year, and true-up billing months after the fact tends to draw more scrutiny than a rate adjustment communicated proactively once the trend became clear. Reconciling the pool monthly and comparing it against the provisional rate is what surfaces that gap in September instead of the following spring.

Costs from a subcontractor performing work under your prime contract have to flow through your own indirect rate pools correctly, and a subcontractor invoice applied to the wrong cost category, direct labor treated as an indirect cost, for example, distorts both your rate calculation and the specific contract's cost reporting to the government. Reconcile subcontractor costs against their contractual classification before they hit the pools, since correcting a misclassification after several months of incurred cost reporting is considerably harder than catching it at the point the invoice is first coded.