Start with the awarded or proposed contract, not a generic checklist
Identify the contract type, agency, prime or subcontract position, statement of work, labor categories, period of performance, tasks and CLINs, funding structure, invoicing or voucher requirements, incorporated clauses, flowdowns, and customer reporting. The right timekeeping and accounting process depends on the actual terms.
A firm-fixed-price contract, time-and-materials contract, labor-hour contract, and cost-reimbursement contract create different billing and cost-accounting pressures. FAR 52.232-7, for example, describes individual daily job timekeeping records as one form of voucher substantiation for T&M and labor-hour contracts. Review the exact contract with qualified contracts, legal, and accounting advisers.
Name accountable owners before configuring software
Assign responsibility for contracts, work authorization, timekeeping, project management, payroll, accounting, billing, funding, system administration, employee training, and evidence retention. In a ten-person company one person may hold several roles, but the responsibilities and incompatible actions should still be visible.
Decide who can create a charge code, authorize an employee, approve time, change a closed record, process payroll, post labor, submit an invoice or voucher, and communicate with the contracting officer. Avoid a universal administrator who performs every step with no independent review.
Map the complete labor-data flow
Draw the path from employee work to daily time, certification, approval, labor distribution, payroll, project or job-cost records, the general ledger, billing or voucher support, and funding reports. Label the system of record and owner at every step.
For each interface, define record identifiers, mappings, timing, rejected records, duplicate prevention, corrections, reconciliation, and retained evidence. A CSV can be a controlled interface; an undocumented spreadsheet that changes every month is not a dependable process.
Build contract and indirect charge codes
Create the contract, task, CLIN, project, or other direct objectives required for labor accumulation and management. Create approved indirect codes that cover the whole workday. Give every code a clear description, owner, effective dates, accounting mapping, and employee authorization.
Test whether employees can distinguish similar work. Do not create a generic holding code that finance plans to redistribute later. If funding is low, management addresses the funding issue while employees continue to record the objective that reflects the work performed.
Approve the policy and train every role
Issue the timekeeping and labor-charging policy before live contract work begins. Cover daily employee entry, all hours worked, authorization, missing codes, corrections, certification, approval, locks, secure-site and absence exceptions, monitoring, and escalation.
Train employees, supervisors, finance, and administrators using scenarios. Retain the policy version, attendance, role, acknowledgment, assessment, and remediation. New hires should train before receiving live codes; new managers should train before approving time.
Run a complete test period before the first required close
Use real employees and representative codes in a controlled or live pre-contract period. Test daily entry, missing time, a wrong code, a post-approval correction, manager delegation, leave, overtime where applicable, period lock, labor distribution, payroll reconciliation, accounting posting, and evidence retrieval.
Record every failure, owner, correction, and retest. A policy and configured application do not prove the system operates. SF 1408 explicitly asks whether the accounting system is in full operation.
Set a daily and period-close operating calendar
Publish the daily entry cutoff, reminder and escalation times, period end, employee certification deadline, supervisor approval deadline, payroll cutoff, labor-distribution run, reconciliation review, accounting posting, invoice or voucher preparation, and final lock.
Leave enough time for honest correction. A schedule that requires payroll to close before managers can review creates recurring estimates and emergency overrides. If timing differences are unavoidable, document the preliminary record and mandatory final reconciliation.
Create funding and ceiling controls from the contract
Enter the funded amount, estimated cost or ceiling, effective modifications, period covered, and the level at which funding is controlled. Track approved labor and other applicable costs at the same contract, task, or CLIN level used in management and required notices.
FAR 52.232-20 and 52.232-22 contain notice mechanics for fully funded and incrementally funded cost-reimbursement contracts, including configurable percentage and day windows. FAR 52.232-7 contains a separate ceiling notice for T&M and labor-hour contracts. Use the clause in the actual contract; do not apply one generic alert threshold to every award.
Prepare the first evidence package
For one employee and one closed period, retrieve the policy and training record, work authorization, daily time, corrections, employee certification, supervisor approval, labor distribution, payroll reconciliation, accounting reference, contract or CLIN total, and related system history.
For the whole period, retain control totals, exception reports, integration or export logs, unresolved items, reviewer approval, and superseded versions. Use the package internally; do not wait for a customer request to learn that the records cannot be joined.
First 30 days after contract start
Review daily completeness and authorization exceptions every working day. Hold a short weekly control review with contracts, program, finance, and payroll. Correct system or training issues while the sample is small.
- Confirm each employee entered all direct and indirect hours daily.
- Review unauthorized, closed, or newly requested codes.
- Resolve corrections through the documented process.
- Compare staffing and labor categories with the contract assignment.
- Reconcile the first approved period through payroll and accounting.
- Review funding consumption and forecast with the applicable notice clause.
- Record root cause and corrective action for every repeated exception.
Days 31–90: stabilize and test
Move from implementation monitoring to a repeatable monthly control. Sample employees, contracts, indirect codes, corrections, approvals, rate changes, and integration failures. Run a mock floor check and retrieve the evidence without advance cleanup.
Review whether the chosen software remains the right scope. A focused QuickBooks-based stack may be enough when accounting and reconciliation are controlled. If billing, indirect rates, multiple entities, procurement, and interfaces are becoming the dominant risk, begin a structured ERP evaluation rather than adding permanent spreadsheets.
The final readiness test
Ask an employee to explain today's charge, ask the manager to explain approval, ask finance to trace the labor through payroll and accounting, and ask the contract owner to explain the funding position. Then compare every answer with the retained records.
If the explanations and records agree, the company has a working control to maintain. If they do not, document the gap and fix the process. Do not relabel a deficiency as a software feature request when the real issue is ownership, policy, training, or accounting design.