How to Record FAR Professional Service Costs
Records the accrual of allowable professional and consultant service costs under FAR 31.205-33, ensuring proper segregation from unallowable legal/contingency fees.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| G&A Expense - Allowable Professional Services | Debit | 8,500.00 | - |
| G&A Expense - Unallowable Consultant Fees | Debit | 1,500.00 | - |
| Accrued Liabilities | Credit | - | 10,000.00 |
💡 Accountant's Note
Professional services must be supported by evidence of the nature and scope of the service. Costs related to defense of fraud or certain legal proceedings are unallowable and must be segregated.
Practitioner & Systems Framework
💻 ERP Architecture
Use specific project codes for consultant agreements to automate the split between allowable and unallowable pools.
⚠️ Audit Flags
Lack of consultant work products (reports, memos) during DCAA audit; excessive hourly rates compared to market benchmarks.
📄 Required Documentation
Consultant agreement, detailed invoices, and tangible work product demonstrating service rendered.
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Expert Analysis by Qusai Ahmad
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