The United States government spent $835 billion in contractual services in 2018, making it the world's largest employer for contract work. If you or your business can meet the government's requirements, you could end up with a healthy revenue stream. But every job has its pros and cons, and government contracting is no different.
Whether you choose to become a government contractor could involve a mixture of circumstance and personal preference. There are some who swear by this type of work and others who wouldn't touch a government job if offered one. Still, others have more government work than they can handle and long for something else.
While government contracting can be an excellent way to start or sustain a business, it's not without its downsides. As with any risk, you must evaluate all factors to determine if the reward is worth the effort. Here are some of the pros and cons of contracting with the government.
A FAR compliant accounting system is a common prerequisite for becoming a pre-qualified consultant for a state transportation department.
Your accounting system must, among other functions, properly segregate direct and indirect costs in accordance with the Cost Accounting Standards (CAS) of Federal Acquisition Regulation(FAR) Part 31 for you to work government contracts.
If you do not have a FAR compliant accounting system, you could fail to get or keep pre-qualified consultant status and perhaps miss opportunities to bid on transportation contracts all together.
Engineering firms must provide annual reimbursement rate audit reports to the Florida Department of Transportation to bid on contracts larger than $500,000.
FDOT Reimbursement Rate Audit Guidelines contain specific Departmental requirements in addition to the general guidelines contained in the American Association of State Highway and Transportation Officials (AASHTO) Uniform Audit and Accounting Guide.
The Florida Department of Transportation requires consultants requesting professional services prequalification at the unlimited level (greater than $500,000 in fees) to certify the establishment of an accounting system that separates and accumulates direct and indirect costs, and identifies and records labor charges and expenditures for specific projects or jobs.
Technically known as a firm's "indirect cost rate," the more familiarly known "overhead rate" is the percentage of general expenses that consultants can bill to contracting government agencies. More specifically, it is the ratio of allowable indirect costs to total allocable direct labor costs.
During tax season the same question always resurfaces among executives, business owners, and independent contractors – who should prepare my taxes?
While this question depends on each circumstance, the primary benefits of using a tax professional will always be time savings and improved accuracy. Individuals with more complicated tax needs will obviously benefit more from hiring someone to do their taxes, but everyone will benefit to some extent.
Fifty years after The Beatles first sang, “Will you still need me, will you still feed me, when I’m 64?” baby boomers are asking the same question of the businesses they own.
Pre-recession business owners busied themselves growing their companies, often assuming their values would increase with a go-go economy and that they eventually could cash out with ample sums to live in comfortable retirements.
Unfortunately, those assumptions did not always hold true. Boomer business owners must now decide whether to sell their companies for less than they had once hoped or to work longer than they had planned.
The Work Opportunity Tax Credit (WOTC) is a Federal tax credit available to employers who hire individuals from eligible target groups with significant barriers to employment. Each year, employers claim over $1 billion in tax credits under the WOTC program. The success and growth of this income tax credit for business is beneficial for all who participate, while increasing America’s economic growth and productivity.
Planning your exit from your business can feel at times like planning your will. Why do it today when you can do it tomorrow? After all, you are not planning on leaving this earth today, right?
Your exit from your company, however, is assured. Whether you leave it feet first or walk through the door, you will leave your company someday. Why not do it on your terms?
Owners depend on their businesses to support them today, and more importantly, they depend on them to support their families, their retirement, and their way of life in the future. What assurances do you have that things will go as planned? Reports have shown that 8 out of 10 business owners do not know what they need to do today to have a successful business transition in the future.
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