Preparing for Success: Year-End Accounting and Financial Planning for Government Contractors
As the end of the year approaches, government contractors face a critical time for financial planning and accounting. A well-executed year-end close not only ensures compliance with regulations but also sets the stage for a strong and strategic start to the new year.
Key Areas of Focus for Year-End Planning
1. Year-End Close and Reconciliations
Finalizing accounts at year-end is essential for maintaining accurate financial records. Reconciliation of all accounts ensures there are no discrepancies, enabling a seamless transition into the next fiscal year.
2. Indirect Rates Reconciliation
Indirect rates play a significant role in government contracts, affecting pricing and profitability. Analyzing and reconciling rates for 2024 ensures compliance and provides an opportunity to refine rate structures for 2025.
3. 1099 & W-2 Processing
Proper preparation of 1099s and W-2s is not only a regulatory requirement but also a key part of maintaining strong vendor and employee relationships. Accurate and timely payroll year-end processing minimizes stress and potential penalties.
4. Leave Balances Reconciliation
Closing out leave balances ensures accurate tracking of employee benefits and prevents carryover issues. This step is crucial for financial and operational clarity.
5. Time & Expense Year-End Close
Government contractors rely heavily on accurate timekeeping and expense tracking. A thorough year-end audit ensures compliance with DCAA and prepares you for any future audits.
6. Budgeting and Projections for 2025
Year-end is the perfect time to evaluate past performance and set the course for 2025. Creating realistic budgets and projections provides a financial roadmap that supports strategic decision-making.
7. Compliance and Year-End Reporting
Meeting reporting requirements, including those mandated by the DCAA, is non-negotiable. Comprehensive year-end reports ensure you stay in compliance and avoid penalties.
8. System Consulting, Support, and Training
Efficiency begins with the right tools and expertise. Leveraging accounting systems can streamline operations, but only when users are properly trained and systems are optimized.
Why Year-End Planning Matters
For government contractors, the stakes are high. Inadequate year-end preparation can lead to compliance violations, financial mismanagement, and missed opportunities. By dedicating time and resources to these tasks now, you can start 2025 on a solid footing.
Checklist to help get you started
| Step | Description |
| 1 | If on-premise, install year-end update. |
| 2 | Make a complete backup. |
| 3 | Run normal month-end close process. Do not close until year-end is complete. |
| 4 | Setup new calendar/fiscal year, periods and subperiods. |
| 5 | Reconcile unbilled receivables and balance sheet accounts. |
| 6 | Roll forward general ledger balances and update retained earnings. |
| 7 | Enter budgets for new year. |
| 8 | Roll project balances forward. |
| 9 | Copy cost pools and service centers to new year. |
| 10 | Update new year cost pools and service centers, as required. |
| 11 | Add new year timesheet, leave and payroll period. |
| 12 | Run 1099’s. |
| 13 | Run W-2’s. |
| 14 | Close month and close calendar/fiscal year. |
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Ready to Close Out the Year with Confidence?
At Iuvo Systems, we’re here to help you navigate year-end complexities with ease. Whether it’s reconciling accounts, processing payroll, or planning for the year ahead, our experts are ready to assist.
Let’s make 2025 your best year yet. Contact us today to discuss how we can support your year-end accounting and financial planning needs.
Learn more about our Outsourced Accounting Services and our Deltek Premier Partnership.
About Iuvo Systems
Iuvo Systems is the premier GovCon accounting services firm that provides DCAA compliant outsourced bookkeeping, consulting, implementation and staffing to government contractors. In addition to working with large prime contractors we specialize in working with 8(a), SBA, HUBZone, Women, Minority and Veteran owned firms utilizing QuickBooks, Deltek Costpoint and other industry specific applications.
