Full time employees vs. as-needed Contract Help ?

There is no need to clue in any single business owner out there how tight the economy is. Many of you are wisely looking at government contracting as a viable way to diversify your revenue streams.

Businesses expanding their revenue streams to include government contract work might immediately think they need to hire staff to write proposals and manage contract deliverables and think they need to hire a Controller + with Govt contracting experience to replace / augment their bookkeeper or accountant.

Not so! Companies that have a small number of contracts (less than 20) generally do not need a full time contracts manager. Until the organization takes on Cost type contracts they do not need full time senior level financial management.

The proposal cycle is just that – cyclic – so once the proposals have been written and the contracts negotiated, the contract management piece is not an everyday task.

Depending on the vehicle types – Fixed Price, Time & Materials, Cost Plus; the financial reporting requirements will vary in complexity. Generally speaking the FP and T&M contracts do not need accounting systems built with the same level of cost reporting capabilities as do Cost Type Contracts. Certainly systems must be in place to ensure that the costs that are being charged to FP and T&M contracts are legitimate and proper for those contracts, but the billing requirements are not as sophisticated until you start using Cost Type Contracts.

So if you are a small contractor that has a few contracts and they are FP or T&M, a better investment would be to team with knowledgeable experts who can provide your administrative staff with the training necessary to carry out the routine functions of contract management and accounting; while providing strategic guidance to management as the organization grows.