As most Deltek GCS Premier users already know, Deltek has begun to discontinue support for their widely-used legacy product that has become synonymous with government contractor accounting. While some companies have already established transition plans and determined which accounting solution to implement, countless companies remain on GCS Premier and will need to decide in the near future what their plan is to replace GCS Premier. The upcoming start of the new year will be a popular transition date for current GCS Premier users to allow for a clean accounting cut-off. For companies that are yet to decide which accounting solution to switch to, this article outlines some of the options for small and mid-sized businesses in the government contracting industry. Those options can be segmented into three primary categories that we will discuss:
- Switch to an alternative Deltek product
- Move to a mid-tier accounting software provider that offers competitive solutions and pricing compared to GCS Premier
- Implement a lower-cost accounting solution such as QuickBooks
Alternative Deltek Products
Deltek has the largest presence in the government contractor accounting software industry. Their products were built to handle cost reimbursable contracts, to assist with the preparation of an incurred cost submission, and to address a variety of other accounting and operational issues pertinent to government contractors. Many GCS Premier users either have, or will shortly, transition to one of Deltek’s other products, primarily CostPoint. Staying with Deltek offers many positives; users will have familiarity with the accounting software, the transition/implementation should be painless since it is still a Deltek product, and the company will continue to use what is widely considered the premier accounting software for government contractors. And CostPoint is not just an accounting system, but rather can be used as a full ERP system. On the other hand, we do come across many companies where a Deltek product is simply not the right fit. This may be because of the nature of operations, the size of the company, or the make-up of the accounting department. Some of the most common complaints about Deltek are that it is not user-friendly or intuitive, it can be inefficient for processing transactions, and that it can be expensive compared to some other available options. The discontinuance of support for GCS Premier may be a perfect opportunity for companies to evaluate if a Deltek product is truly the right fit for their organization, or if one of the options below is a more logical choice for their next accounting solution.
Mid-Tier Accounting Solutions
As we just mentioned, one of the biggest downsides to Deltek products are complaints about ease of use. This specific issue is a large reason that some competitors, such as Unanet and Sympaq, have gained traction in the market. Pricing can vary quite a bit depending on the specific features you require, the number of users, and whether the delivery is cloud based or not, but in general these systems are priced near or slightly below Deltek GCS Premier. Unanet was a very popular timekeeping system amongst government contractors, but a few years ago they built out a full accounting solution that seeks to provide a seamless cloud experience, advanced project management capabilities, and an easy-to-use interface. Sympaq is offered both on-premise and through cloud delivery, and offers a similar platform compared to GCS Premier, but with some significant improvements to enhance efficiency and usability. These software systems were built with government contractors in mind, and allow for integrated timekeeping systems, billings modules to generate all major types of government invoices, and indirect rate calculations. You can visit either of their websites to watch webinars or request a demo, which may help you decide if they are worth investigating further.
QuickBooks
At some point during your search for an accounting system, you may have heard that QuickBooks is “not DCAA compliant”. However, that is simply either misinformation, or a marketing tactic by some of the other players in the government contracting industry. No system, on its own, is DCAA compliant. A DCAA compliant accounting system requires properly designed and implemented policies and procedures, among other things. While certain accounting systems were designed to assist with achieving DCAA compliance, such as the Deltek products and other systems discussed above, there is nothing inherit about QuickBooks that would prevent a company from using the system and achieving DCAA compliance. QuickBooks is widely used by government contractors that have successfully passed DCAA reviews such as the Pre-Award Survey of Prospective Contractor Accounting System. The main appeal of QuickBooks for companies currently using GCS Premier is the potential cost savings and the improved efficiency. There are multiple versions of QuickBooks with different delivery methods which impact price, but if switching from GCS Premier to QuickBooks a company could likely achieve between $5,000 – $15,000 in annual savings on the software and storage alone. That is in addition to potential cost savings achieved by using what is widely considered a much more user-friendly and efficient accounting system when compared to any of the Deltek products. QuickBooks also now has hundreds of applications, including timekeeping systems and expense report systems, that seamlessly integrate with QuickBooks. There are also applications built specifically for government contractors that integrate with QuickBooks, such as ICAT Systems, which can calculate indirect cost rates and help generate reports used in preparing an incurred cost submission. The main factors that need to be considered when evaluating a potential switch to QuickBooks are the size and complexity of operations of the company. QuickBooks does lack certain functions that Deltek has built to address the needs of government contractors. This may lead to a reliance on spreadsheets and other manual functions when using QuickBooks. If your company is on the smaller side and lacks certain complexities, such as the presence of cost reimbursable contracts, then the reliance on certain manual functions may not be a significant burden. If on the larger and more complex side, the time and cost savings from certain aspects of QuickBooks may be lost because of the functions it lacks in comparison to Deltek and the other systems discussed above.
Next Steps
Unfortunately, there is no easy formula to follow to determine which accounting solution is the best for your company. There are a wide range of options in terms of functionality, customization, and pricing. Talk to your colleagues and see what their thoughts are on the accounting system they use, consult your CPA to see if they have any advice, and take demos of some of the different options. Cost is important, especially given the current LPTA environment. But equally important is the where the company is headed in the next two, five, and ten years. If there are aspirations for significant growth, make sure to factor that into your decision so that the company has a solution that it can continue to use as it expands operations in the future.