Customize Your Indirect Rate Model
Federal contractors must accumulate and allocate indirect costs in a logical and consistent manner. ICAT (short for Indirect Cost Allocation Tool) enables contractors using QuickBooks to compute indirect rates and allocate indirect costs to their final cost objectives, consistent with the requirements of FAR 31.2.
ICAT is designed to be flexible. The Rate Model Editor enables you to map cost pools and allocation bases according to your company's indirect cost allocation policy. You can choose from included templates, or customize an indirect rate structure to fit your unique needs.
ICAT reads your QuickBooks Chart of Accounts and recognizes any cost of goods sold and expense type account at the parent/root level as a cost pool. A listing of your QuickBooks accounts in ICAT's Rate Model Editor enables you to define the pool and base components for each indirect cost pool. Your indirect rate model configuration is the basis for automatically calculating your indirect rates and allocating indirect costs to final cost objectives from your QuickBooks general ledger data.
Charge Costs to Final Cost Objectives
Charging direct costs and allocating indirect costs to the appropriate final cost objective is a fundamental requirement for federal contract cost accounting. You will need to set up contracts, CLINs, or other unique identifiers for each final cost objective in the QuickBooks Customer Center.
For each contract in the Customer Center, you will enter additional information specific to government contracts in ICAT, such as contract type, inception date, funded amount, and contract value. Accounts are also assigned expense categories in ICAT for accurate reporting. These details enable ICAT to generate your contract cost reports and incurred cost proposal.
General Ledger-Based Reporting
Gain essential financial insights with timely reports from your QuickBooks general ledger data. With your indirect rate model and contracts defined in ICAT, you can quickly see direct and indirect costs in real-time, for any timeframe. View indirect rate calculations and allocations, run a P&L by job that includes indirect cost allocations, track contract status against funding limitations, and more. Click here to see ICAT's reporting capabilities.
You can also generate your Incurred Cost Proposal with cost data from QuickBooks automatically populated into the appropriate schedules. You'll save a hours of work and simplify this tedious annual report.
Does ICAT send data to QuickBooks?
In most cases, no. ICAT reads your current QuickBooks data to calculate indirect rates, allocate indirect costs, and generate reports. Accounting data from these activities is not written back to QuickBooks.
There is one scenario in which ICAT sends data back to QuickBooks. For companies just getting started, ICAT offers a Chart of Accounts Wizard that generate a chart of accounts formatted specifically for government contractors. This populates the accounts based on one of the included ICAT templates. For most contractors, this feature is not needed (and not advised) because they have an existing chart of accounts.
Choose the timekeeping solution that fits your business
Your time data is an input into QuickBooks. ICAT reads your time data from QuickBooks, but does not directly connect to your timekeeping software. This gives you the flexibility to choose a DCAA-compliant timekeeping application that fits your budget and requirements. Certain time data elements must be imported into QuickBooks to use ICAT's labor distribution reporting features.