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Every year, thousands of small businesses win their first government contract and immediately make the same critical mistake: they assume their existing accounting system will work fine. After all, accounting is accounting, right? They’ve been tracking revenue, expenses, and profits for years. How different could government work be? The answer: dramatically different. Government contract accounting…

A major aerospace contractor faced $47.2 million in questioned costs after DCAA auditors discovered systematic violations of Cost Accounting Standard 420 regarding Independent Research and Development (IR&D) cost accounting. The contractor’s failure to properly segregate IR&D costs above the statutory ceiling resulted in contract termination, suspension from federal contracting, and civil penalties under the False…