Build the project code around the contract
Create a project code when the contract is signed. Record the customer department, contract and purchase-order references, approved value, milestones and invoice instructions. Keep amendments with the original contract so a new scope does not become an unexplained budget overrun.
Use the contract’s actual requirements for time records, expense support and acceptance. Not every federal contract uses the same cost rules or billing method, and bookkeeping setup does not certify compliance with a procurement requirement.
Show margin and collection as different questions
Illustrative Ottawa consulting project: a $24,000 milestone has $11,000 of employee costs, $5,000 of subcontractor costs and $1,000 of directly attributable travel. The preliminary project contribution is $7,000 before overhead and tax. That does not mean $7,000 is available in the bank.
If the deliverable is awaiting acceptance, distinguish unbilled work from an issued receivable. Once an invoice is raised, connect it to the acceptance evidence and track its payment status. Your accountant should confirm the revenue-recognition policy appropriate to the engagement.
A useful project file
- Signed contract, amendments, purchase order and billing instructions.
- Approved timesheets coded to the project and work period.
- Subcontractor agreements, invoices and evidence that the work was received.
- Receipts and approval for reimbursable expenses.
- Deliverable acceptance, invoice copies and payment references.
- A budget-to-actual report that separates direct cost, overhead allocation and unbilled work.
Make month-end exceptions visible
Review costs posted to a general suspense account, invoices without project codes and time entered after billing. A cost belongs to the period and project supported by the evidence, not simply the month it cleared the bank.
For teams working on several government and private-sector engagements, use the same basic coding discipline but retain each contract’s separate reporting requirements. A short monthly exceptions list helps the owner resolve approvals before year-end.
Put this into practice
Sources and current guidance
A practical next step
Bring the records you have.
We can identify missing information, agree on the scope and organize the next bookkeeping step.
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