Government Contracting
GovCon Case Study:
Storage Hawk is a woman-owned small business that provides government and commercial IT solutions. As Storage Hawk began to grow, the company CEO Joel Salamone contacted Wendroff & Associates for consulting on categorizing their services into different states and classifying sales by individual consultants to optimize job costing. Storage Hawk also needed assistance creating an automated job costing accounting system.
Storage Hawk was already using QuickBooks Online, and we helped them develop the system to create a class system that would classify the accounts from the Profit & Loss into individual states, with each class acting as a state. The consulting revenue account could then be reviewed by state, allowing Storage Hawk to be compliant with the employees that live in other states who generate revenue. Revenue is one of the factors that need to be broken down by state to prepare each individual state tax return.
Storage Hawk also resells their products to the government using the drop ship method. The QBO system easily allowed them to purchase a product by check/cc, etc, assign it to a job/contract, and to automatically markup the cost of the product on the invoice by percentage or amount. The company has not been required by the DCAA to have an audit, however, if an audit were necessary, the accounting system could easily be modified to have classes acting as contracts and create a class system for general and administrative expenses (i.e., rent, utilities, accountant, etc.).
Solution:
Using QBO, we were able to offer Storage Hawk a cost effective accounting solution that meets all of the company’s needs and the DCAA’s requirements, as well as allowing Storage Hawk’s three principal officers seamless accessibility to the accounting system from their offices in Florida and Washington DC as well as while traveling around the country.
Wendroff & Associates is also helping Storage Hawk create a revenue strategy for distributing the company’s revenues to a state that does not tax individual income tax, while maintaining DCAA compliance. This should equate into tens of thousands of dollars in tax savings annually.
Company Response:
“Wendroff & Associates has been extremely prompt in helping us figure out multistate sales and use tax issues dealing with subcontractors and the federal government. Their strategic advice is insightful and effective, and has cleared up many of the worries we had.”
