Category Archives: General Accounting

SBIR Accounting Myth #18: “I have an FFP Contract, I don’t need an adequate accounting system.”

Remember, best practices. Also remember, future work may not be fixed prices. Therefore, if you’re in business awhile and go for a CPFF contract, the government would expect a functioning accounting system as a recurring contractor. Also, being able to … Continue reading

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SBIR Accounting Myth #17: It’s Okay to Wait Until the Last Minute to “Plug” My Indirect Rates into my Proposal

Not a good idea. First of all, plugging the difference between the solicitation limit and your direct costs is gives no indication of what your costs will really be. Second, waiting until last minute doesn’t give you enough time to … Continue reading

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SBIR Accounting Myth #16:”The Safe Harbor Indirect Rates Are the Best for My Business”

Not necessarily. As I say to my clients, don’t you want to know the truth? While some solicitations will limit your indirect rates to the safe harbor, other agencies and phases provide more flexibility. Time and time again, awarded underestimate … Continue reading

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SBIR Accounting Myth #15: “I Don’t Need a Payroll Service”

Yes you do. This is one I never understand. For a very affordable price, it makes sense to have your employees’ withholding taxes timely deposited, unemployment taxes paid, paychecks properly classified, and W2’s and tax returns timely filed. The cost … Continue reading

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SBIR Accounting Myth #14: “I Can Change My Employees’ Timesheets”

Never! Only your employee can change their timesheet, with a signature and explanation (adequate automated systems require this). Employee timesheets should not look like a creative canvas of numbers and doodling, but rather, should be well organized and structured so … Continue reading

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SBIR Accounting Myth #13: Research & Experimentation Tax Credits are for the Big Firms

Not true. This is a nice benefit for small firms that engage in qualified research activities and have unfunded research. For corporations, unused tax credits may be carried back 2 years and forward 20. For S-corporations and LLC’s, the credits … Continue reading

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SBIR Accounting Myth #12: “Being a Cash-Basis Taxpayer Makes the Most Sense”

Sometimes. If your business has a cost-plus-type contract (CPFF), this may not be a big problem as long as your expenses are paid and your federal voucher payments are received in the same accounting period. Fixed price contracts (FFP) tend … Continue reading

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