What is a virtual CPA?

A virtual CPA provides the same services as a traditional CPA firm — tax preparation, bookkeeping, audits, financial planning — but delivers them remotely using secure cloud technology. You get expert-level service without visiting a physical office.

How much do virtual CPA services cost?

Pricing depends on the complexity of your financial situation and the services you need. We provide transparent fee estimates during your initial consultation. Virtual CPA firms typically have lower overhead than traditional firms, which translates to more competitive rates.

Do I need an audit for my nonprofit?

Many states require nonprofits to have an independent audit once they exceed certain revenue thresholds, often $500,000-$750,000. Grant-making organizations and government agencies frequently require audited financial statements. We can help determine your specific audit requirements.

What is the difference between an S-Corp and an LLC for tax purposes?

An LLC provides liability protection and pass-through taxation by default. An S-Corp election can provide additional tax savings by allowing owners to split income between salary (subject to payroll taxes) and distributions (not subject to payroll taxes). The right choice depends on your income level, business structure, and state tax laws.

What does a virtual CFO do?

A virtual CFO (fractional CFO) provides high-level financial strategy and oversight on a part-time basis — budgeting, forecasting, cash flow management, financial analysis, KPI reporting, and strategic financial planning. You get C-suite financial leadership without the full-time cost.

Can you help if I'm behind on bookkeeping or taxes?

Yes. We offer catch-up bookkeeping services to bring your books current and can help resolve back tax issues including IRS notices, unfiled returns, and payment plans.

What accounting software do you work with?

We work with QuickBooks Online, Xero, FreshBooks, Wave, and other major cloud accounting platforms. We can also help you select and set up the best software for your business.

How do I prepare for tax season?

Organize financial records throughout the year, keep receipts for business expenses, track mileage and home office usage, make quarterly estimated tax payments, and schedule a year-end tax planning session before December 31.

What is DCAA compliant accounting?

DCAA (Defense Contract Audit Agency) compliant accounting is a system that meets federal government requirements for contractors. It includes proper timekeeping, job cost accounting, indirect cost allocation, and specific internal controls required for government contract work.

Do I need a CPA or a bookkeeper?

Bookkeepers handle day-to-day recording of financial transactions. CPAs handle higher-level work — tax planning and preparation, audits, financial analysis, and strategic advice. Many businesses need both. Our firm provides both services so you have one team managing everything.

What's the difference between an audit, review, and compilation?

An audit provides the highest level of assurance through independent verification of financial statements. A review provides limited assurance through analytical procedures and inquiries. A compilation presents financial information in statement format without assurance. The right choice depends on your stakeholders' requirements.

Do you serve businesses outside the DMV area?

Yes. While our primary service area is Washington DC, Maryland, and Virginia, we serve clients nationwide through our 100% virtual model. Our cloud-based systems allow us to work with businesses anywhere in the United States.

When is the Incurred Cost Proposal due?

Within 6 months of your fiscal year-end per FAR 52.216-7. For calendar year companies, the deadline is June 30.

What format does DCAA require for the ICP?

DCAA requires the ICE (Incurred Cost Electronically) model — a specific Excel workbook with prescribed schedules. The model is available for free download from DCAA's website.

What happens if I miss the ICP deadline?

Contracting officers may withhold 5-10% of cost reimbursements until the ICP is submitted. Persistent late filing can result in contract suspension and loss of future cost-type contracts.

What costs are typically disallowed in DCAA audits?

Common unallowable costs include: entertainment and alcohol, personal use of company assets, advertising (certain types), contributions and donations, fines and penalties, and certain executive compensation above reasonable levels.

Do subcontractors need to file ICPs?

Subcontractors with cost-type subcontracts generally have the same ICP filing obligations as prime contractors. Pass-through costs from subcontractors must be properly accounted for in the prime's ICP.

What is the DCAA ICP backlog?

Many contractors fall years behind on ICP submissions. DCAA has a process for resolving backlogs through negotiated settlements, but unresolved backlogs create risk and prevent contract closeout.

How does DCAA select ICPs for audit?

DCAA uses risk-based selection. Larger contracts, contractors with prior audit findings, first-time submissions, and significant rate fluctuations increase audit likelihood.

What is an indirect cost rate?

An indirect cost rate expresses the ratio of indirect costs (overhead, G&A, fringe) to a direct cost base. For example, a 150% overhead rate means for every $1 of direct labor, $1.50 of overhead is billed to the government.

Can a CPA represent me during a DCAA audit?

Yes. A CPA can respond to DCAA information requests, defend cost allowability positions, and negotiate settlements. CPA representation is recommended for any full-scope DCAA incurred cost audit.

DCAA Incurred Cost — Northern Virginia & DC Specialists

DCAA Incurred Cost Audit Support for Northern Virginia & DC Government Contractors

ICP preparation, FAR Part 31 allowability review, and DCAA audit defense for cost-type government contractors. Meeting the June 30 deadline — and defending your submission if DCAA selects it for audit.

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What is a DCAA incurred cost audit and who is required to file?

Government contractors with cost-type contracts (CPFF, CPAF, T&M) must submit an Incurred Cost Proposal (ICP) to DCAA within 6 months of fiscal year-end per FAR 52.216-7. DCAA audits the proposal to verify that costs were allowable, allocable, and reasonable under FAR Part 31. Contractors with over $15 million in flexibly-priced contracts undergo mandatory audits; smaller contractors may use an alternative ICP submission.

ICP Problems We Solve

ICP deadline missed — now facing contract closeout penalties and disputes with the contracting officer

DCAA selected your ICP for full audit — unallowable costs buried in your G&A pool could trigger significant repayment

Your incurred cost submissions are years behind (the "ICP backlog") — DCAA is threatening to freeze new contract awards

Cost-type contract just ended and you don't know how to calculate the final settlement

You're a small GovCon that just crossed the $15M threshold — first ICP submission due and you don't know the format

Key Terms

Incurred Cost Proposal (ICP): An annual submission required by FAR 52.216-7 from contractors with cost-reimbursable contracts. The ICP reconciles estimated costs used for billing during the year with actual allowable costs incurred, establishing the final contract settlement.

FAR Part 31: Federal Acquisition Regulation Part 31 — the cost principles that define which costs are allowable and reimbursable under government contracts. Costs must be allowable, allocable, and reasonable to be included in an ICP.

Flexibly-Priced Contracts: Contracts where the government reimburses actual costs (plus fee) rather than a fixed price. Includes Cost-Plus-Fixed-Fee (CPFF), Cost-Plus-Award-Fee (CPAF), Time-and-Materials (T&M), and Labor-Hour contracts.

DCAA Incurred Cost Services

From first-time ICP preparation to multi-year backlog remediation and active audit defense.

ICP Preparation and Review

Complete preparation of the Incurred Cost Electronically (ICE) model in DCAA's required format. Includes schedule preparation, rate calculations, and reconciliation to financial statements.

Allowability Analysis (FAR Part 31)

Pre-submission review of all claimed costs against FAR Part 31 allowability standards. Identify and segregate unallowable costs before DCAA does — preventing findings and repayment demands.

Direct vs Indirect Cost Classification Review

Verify proper cost classification between direct and indirect pools. Misclassification is a leading cause of DCAA audit findings and can trigger multi-year lookbacks.

DCAA Audit Defense and Representation

CPA representation during DCAA fieldwork. We respond to information requests, defend allowability positions, and negotiate settlements on your behalf.

ICP Backlog Remediation

Catching up on multiple years of unfiled ICPs. We prioritize submissions by risk, negotiate with DCAA for efficient resolution, and help clear the backlog before it affects new awards.

Final Contract Settlement Calculation

When a cost-type contract ends, the final settlement reconciles all billings to actual allowable costs. We calculate the amount owed (or refundable) and prepare the documentation for closeout.

Types of DCAA Audits — Which Applies to You?

Feature	Incurred Cost Audit	Forward Pricing Audit	Accounting System Audit
Trigger	Annual ICP submission required	Bidding on new cost-type contracts	New contractor or system change
FAR reference	FAR 52.216-7	FAR 42.1701	DFARS 252.242-7006
Timing	Annual; ICP due 6 months after FYE	Pre-award; before contract execution	One-time; periodic re-evaluation
Risk	Disallowed costs, contract underpayment	Lower rates accepted; competitive disadvantage	System disapproval; ineligible for cost-type contracts
CPA role	ICP preparation + audit defense	Rate proposal support + negotiations	System documentation + gap remediation

ICP Preparation Process — 5 Steps

Contract Review

Analyze all active cost-type contracts; identify billing rates used vs. actual rates. Determine which contracts require ICP settlement and calculate the exposure.

Cost Pool Analysis

Organize costs into proper pools (direct, fringe, overhead, G&A) and identify potentially unallowable costs per FAR Part 31 before they appear in the submission.

ICP Preparation

Prepare the Incurred Cost Electronically (ICE) model in DCAA's required format. All schedules, rate calculations, and reconciliations to your financial statements.

Pre-Submission Review

Internal audit for unallowable costs, mathematical accuracy, and rate reconciliation before submission. Catch issues before DCAA does.

Audit Support

Provide DCAA with requested documentation; defend allowability positions; negotiate settlements. CPA representation throughout the audit process.

Serving the DMV GovCon Community

The DC, Maryland, and Virginia area has the highest concentration of government contractors in the United States.

Northern Virginia Defense Corridor

Tysons Corner, Reston, Herndon, Falls Church — the densest concentration of defense IT and professional services contractors in the US. DCAA has a regional office in Springfield, VA serving this corridor.

Maryland Government Agencies

Fort Meade (NSA, Cyber Command), Bethesda (NIH, DARPA), Aberdeen Proving Ground. Contractors supporting these agencies frequently hold cost-type contracts requiring annual ICP submissions.

DC Federal Headquarters

DoD, GSA, DHS, and other federal agency headquarters are in DC proper. Contractors supporting these agencies often have the most complex cost structures and highest DCAA audit risk.

DCAA Regional Coverage

DCAA has regional offices in Rockville, MD and Springfield, VA specifically serving the DMV contractor community. We know the local DCAA offices and their audit priorities.

Related Services

Government Contractor Audit

Full DCAA compliance services overview.

DCAA Forward Pricing Rate Audit

Forward pricing rate proposals and FPRA negotiation.

Attestation Services

SOC 1, SOC 2, and SSAE 18 engagements.

SOC 2 Audit

Security controls attestation for tech companies.

Virtual CFO Services

Strategic financial oversight for growing GovCons.

Book a Consultation

Talk to a DCAA specialist about your ICP.

DCAA Incurred Cost Audit FAQs

Common questions from government contractors in Northern Virginia, DC, and Maryland about ICP filing and DCAA audits.

ICP Deadline Approaching? Let's Get It Done.

Whether you're filing your first ICP or catching up on years of backlog, we prepare defensible incurred cost proposals and stand by you through DCAA audit.

Schedule a Call

Serving government contractors in Reston, Herndon, Tysons, Chantilly, McLean, Rockville, Bethesda, and across the DC metro area.