Government Contracting Software Cuts Environmental Firm's Admininstration Time

An environmental contractor has substantially reduced the amount of time needed to track and report revenues and expenses by implementing software specially designed for government contract accounting. In the past, the contractor managed job expenses and revenues to be reported to various government agencies on spreadsheets, which took huge amounts of time and ran the risk of errors. The company switched to new software that automatically keeps track of individual jobs while also providing integrated financial accounting. One major advantage is that the new software makes it easy for users to customize reports, so it can automatically generate reports in the format preferred by key managers. The new software also offers a special module designed to meet the special needs of government contractors that, for example, tracks actual fringe benefits compared to the provisional fringe benefit rate agreed upon in the contract. It also makes it easy for users to enter their time over the Internet, eliminating a substantial data entry task. "We are saving huge amounts of time by automating the job costing and reporting process," said Lisa Miller, Senior Accountant for Portage Environmental. "I can now provide reports in the exact format required by each division manager without having to create them one by one in Excel. Finally, the software helps automate the special reporting requirements of government contractors."

Portage Environmental, Inc. is a Native American-owned environmental engineering and consulting firm incorporated in Idaho in 1992. The majority owner and president of Portage is Michael J. Spry, a Mississippi Band member of the Minnesota Chippewa Tribe. Portage was formed by Mr. Spry and two partners, who share a vision for a full-service environmental consulting business with a focus on providing the best value to its customers and challenging and rewarding work for employees. Portage has grown to over 170 professionals in Portage offices located nationwide providing comprehensive technical solutions in the areas of operational safety and health, waste and environmental characterization, environmental remediation, technology development and demonstration, performance assessment, composite analysis, dose and risk assessment, transport and compliance modeling, environmental impact analysis, safety analysis, regulatory analysis and compliance, nuclear facility permitting and closure, stakeholder and community involvement, decontamination and decommissioning, process and project engineering. Some of the company's clients include: U.S. Air Force Center for Environmental Excellence, U.S. Department of Defense, U.S. Department of Energy, U.S. Forest Service, and State of Idaho Dept. of Transportation.

Implementing project management software
When the company began operations, it tracked the costs of each job in QuickBooks and on spreadsheets to generate financial reports. But the company's rapid growth to $24 million in sales last year, which earned a place on the Inc. Magazine 500 list for the last three years, caused it to rapidly outgrow these methods. Management evaluated two of the leading project accounting software packages. The first package they looked at, one of the leading tools on the market, was quite expensive, offered a limited number of canned reports, and made it difficult for users to create their own custom reports. The other package, the Wind2 Financial Management System (FMS) from Wind2 Software, Inc., located in Fort Collins, Colorado, was available at a more reasonable cost, offered more canned reports and allowed users greater flexibility in creating their own reports with Crystal Reports. This program fully integrates general accounting functions with project invoicing and reporting, budget control, profit analysis, employee management, cost proposal development, accounts receivable tracking, and government contract management. The company easily configured the Wind2 system to match its three-tiered cost structure. The three indirect cost pools consist of fringe, overhead and G&A such as rent and salaries of people not working on projects. The company currently has five divisions organized along geographical lines. Miller's responsibilities include tracking revenues and expenses for each project, providing frequent reports to project managers, and generating financial statements. She developed custom reports that meet the special requirements of each of the division manager because the managers feel that the canned labor and expense analysis report has more details than they want to see. She removed certain fields such as the billing group description, task descriptions, labor categories, cost types, and expense types. Then she made further customizations to each manager's report because some managers require more details than others and all of them like the information to be labeled and formatted in special ways. "The Crystal Reports module included with Wind2 makes it very easy to create reports in almost any format that is required," Miller said. "You only do it once and then the report can be generated any time you need it with a few keystrokes. This makes it possible to keep all of the reports within the boundaries of a single software package and eliminates the need for manual manipulation. The result is that we spend much less time on administrative tasks and the chances of errors are greatly reduced." More recently, Miller was asked by a new company manager to reevaluate Wind2 against the other major financial management software solution on the market to assure they were using the best product for them. After an extensive review of both products, she came to the conclusion that Wind2 still provided superior features, reporting flexibility, and government contracting capabilities at a lower cost. She also noted that Wind2 has enhanced capabilities for exporting reports to Excel format, which is useful because it allows managers to manipulate their data into their own formats if they desire.

Managing government contracts
Portage recently implemented the Wind2 Government Contract Management module which provides an advanced suite of features designed to help meet the rigorous contract accounting requirements of federal, state, and local government agencies. It tracks and reports on a variety of indirect cost data that are required for compliance with CAS, FAR, ICE and DCAA requirements and allows project costs to be invoiced on standard government forms DD250, SF1034 and 1035. "We are far from taking advantage of the full capabilities of this module," Miller said. "But we have already found it very useful in tracking indirect expenses. The Defense Contract Audit Agency typically approves a provisional fringe benefit rate as a percentage of direct payroll cost for a fiscal year. If during that fiscal year, your actual fringe rate rises above the provisional rate, then you need to take immediate corrective action. The Wind2 government contract management module monitors and compares the provisional and actual fringe rate in order to help keep managers, who have a tendency to focus on direct costs, informed of any problems that might be sneaking up on them." Now employees enter their time daily from their PCs using the software's timesheet module, sparing the accounting staff the task of compiling this data. The information is instantly charged to the appropriate project, making it possible for each project manager to generate current status reports in seconds. These reports are generated by the software's business management module, which accesses employee time records, as well as project expenses and client receipt information, to show where labor costs stand in relation to the project billing. Because the reports are available at all times, there is plenty of time for corrective action to prevent overruns. If a manager sees that a project is 50% complete, for example, and that 75% of the labor costs have already been incurred, he can work on remedying the problem prior to final billing.

Invoicing according to customer requirements
Once the time and expense information has been entered, it can be used to create invoices with hardly any additional effort. The invoices are more complete because, for example, if an engineer has entered an expense charge into the software, the billing module picks up that item up the next time a bill is generated for that client. The format of the invoices is defined in advance using Crystal Reports so every client receives the exact information they are looking for. The Government Contract Management module also automates the generation of invoices in government-approved formats, although Portage hasn't taken advantage of this capability yet. Project management information also moves seamlessly into financial accounting, eliminating the need for time-consuming consolidating entries and making it possible for management to obtain a real-time picture of business performance any time they wish. "Wind2 has assisted us in managing our rapid growth by giving us a tool to accurately track our revenues and expenses on a project and company basis that dramatically reduces administrative effort," Miller concluded. "The integration of project and financial accounting saves time and reduces errors by dramatically lowering the amount of manual intervention and duplicate data entry. The flexibility of the software, particularly its ability to produce reports in a desired format, automates the process of meeting the specific formatting requirements of our division managers and clients. The Government Contract Management module adds a new dimension that we are just beginning to take full advantage of. It offers a wide range of methods to distribute cost to target accounts and to assign actual and provisional rates to projects. Finally, the excellent technical support provided by the software developer has made it easy to take full advantage of the program's capabilities."