Step 4: Payroll and Time Cards

meets the following DCAA Requirement:

  • Timekeeping system that identifies employees’ labor by cost objective

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Sample excel time sheet

Synopsis

You will need to review your current timekeeping system, identify any deficiencies and make corrections. We discuss compliance requirements for DCAA timekeeping.  Payroll items are set up in Quickbooks. A sample time cards in entered into Quickbooks.  We provide a sample excel time card and recommend an electronic DCAA compliant timekeeping system.

DCAA requirements for timekeeping

DCAA will evaluate your timekeeping system to ensure that it meets their requirements for accuracy and internal controls.  Your timekeeping system may be "paper-based" or "electronic" but regardless of the type of system, the following requirements must be met:

  • Daily recording of time
  • Recording all hours worked even if it is more or less than a standard 8 hour day
  • Record all paid leave
  • Record all non-billable time worked
  • All employees must record time, including executives and owners who work in the company
  • Time sheets must be signed and dated by the employee
  • Time sheets must be reviewed, signed and dated by an approver or supervisor
  • Corrections to time sheets must be made by the employee, and then resigned by approver
  • Time sheets must display the project name, charge code or paid leave account used in the accounting system
  • Time sheets must be approved before payroll is run
  • Time sheets must be retained until contract close out

Sample Excel Time Card

Here is an example of an excel time sheet.  To properly use this template, you would need to print it to paper, and sign and date the paper copy, which should be retained for your records.

Download the excel time sheet template here.

Entering a time sheet into QuicKbooks

You will need to enter the time sheet into Quickbooks in order to create the labor distribution and record labor costs to the various projects.  This is accomplished by running payroll in Quickbooks. If you use an outside payroll service such as ADP, you will run a "mock" payroll in Quickbooks to mimics the live payoll.

Open a blank time sheet in Quickbooks. Select the employee name, and the customer:job (project). Select the service item and the payroll item.  The service item is the item that will be used on the customer invoice if the time is billable.  The payroll item is the one the that is linked to the correct general ledger account for labor costing.

Creating Payroll Items

Payroll items link the time sheet to the general ledger accounts for labor costing.  The payroll items are set up in the Payroll Item screen.  You will need to create a payroll item for type of labor cost that you may record on a time sheet.  Direct labor, overhead labor, G&A labor, vacation pay and holiday pay are examples of types of labor that will require a payroll item.

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