Automated Client Receipts in PROCAS author avatar

1. Intro Sessions                                                                     (0:00 - 1:09)

2. Accounts Receivable Report                                            (1:10 - 2:56)

3. Record Client Payments                                                    (2:57 - 6:23)    

4. Finalizing Cash Receipt Journal Entries                         (6:24 - 8:34)


Entering client receipts has been made easier than ever with our new Record Client Payments process. This process starts with a selection screen of what bills are outstanding, followed by the generation of a cash receipts journal transaction to record the amount of cash received in your bank account.

If you have experience paying vendor invoices using PROCAS, you should be familiar with the touch and feel of the new receipt forms. If not, follow along with the detailed breakdown below.


Recording Client Payments

To access Record Client Payments, go to Accounting --> Accounts Receivable --> Record Client Payments.

Record Client Payments in PROCAS

If you are using our integrated invoicing process for billing, or are recording revenue transactions manually, this screen will show you what bills need to be collected.

By default, the populated lines will only show outstanding amounts recorded against receivable accounts. If a receivable has already been collected and recorded, it will not appear.

Bank Payments PROCAS

This detailed information will update when you select the "Search" button and can be filtered by Receivable Account, Client, and Task.

Because there is only so much space here for a screenshot, I spliced the above image into the two key sections:


1) Descriptive Journal Information


Most columns in the first half of each row are read-only and provide descriptions for the Client, Payment Method, Account, Task (WBS), Transaction, Transaction Date, Invoice Number, and Invoice Date for each entry recorded in the system.

Select the checkboxes on the furthest left column to process the payments you have received from your client(s).

Tip 1 - You can filter or sort by each column to help find the receivable you are looking to process.

Tip 2 - You can "select all" or "deselect all" checkboxes simultaneously using the checkbox in the header.


2) Payment Amounts


Once you've selected the entries to relieve, it's time to determine how you would like to apply the cash received from your client(s). These columns on the right side of the form are more interactive and are broken down as follows:

Invoice Amt - The original invoiced amount recorded on the sales journal. (Read Only)

Open Amt - The remaining balance open to be received (Read Only).

  • This amount is original invoice amount less any payments already received.

Payment Amt - The amount of cash received (Editable).

  • Defaults to the Open Amt.
  • Should be overwritten if a different amount of cash was received from your client.

Remaining - The remaining balance of the Open Amt less the Payment Amt entered today (Read Only).

  • This amount will most often be $0.00.
  • If this amount is not $0.00,
    • Do nothing, this balance will remain in your AR for your client.
    • Proceed to one of the following checkboxes: Write-Off or Reclass.

Write-Off - If selected, the Remaining Amt will be written off to your default write off account.

  • Example 1 - If you do not expect to collect the remaining amount, write it off to 9803000U - Bad Debt
  • Example 2 - If you collected slightly more than expected, and your client does not expect you to record the difference to unearned revenue, write it off to 49000000 - Other Revenue (Immaterial)

Reclass - If selected, the Remaining Amt will be reclassed to your default reclass account.

  • Example 1 - If you received too much cash from your client, reclass to unearned revenue account 2600 - Advances from Customers on Contracts
  • Example 2 - If you do not expect to collect the remaining receivable for an unknown amount of time, reclass to 1240 - Accounts Receivable - Doubtful Accounts

Once the Payment Amts have been determined for each payment being received, proceed to the "Next" button in the bottom right-hand corner of the screen.


Processing Receipts

Once you've selected the receivable entries to be relieved, the next step is to process these receipts.

Accounts Receivable PROCAS

Payment Date will default to today's date. The Cash, Write-off, and Reclass accounts will auto-fill with your Default Accounts established under Setup --> Account Structure --> Default Accounts. These default accounts should be established before processing receipts.

You may overwrite any of these defaults if needed, and add a Cash Receipt Transaction Description if you'd like a header description to be added to the final journal entry transaction(s).

You also have the option to create one journal entry transaction for the receipts received, or multiple broken out by client, task, or invoice. We recommend creating a receipts journal transaction for each deposit recorded by the bank.

  • Example 1 - If checks are received by multiple clients and recorded on one bank deposit slip, then one cash receipts journal transaction should be recorded.
  • Example 2 - If payments are received by separate EFT or ACH deposits, then multiple cash receipts transactions should be recorded.

Recording one transaction per bank deposit will simplify the Bank Reconciliation process. Select the "Next" button to proceed to the Transaction Preview screen.


Cash Receipt Journal Preview

Bank Deposit PROCAS

The final step in the receipt process is the preview screen to create your entry. This screen displays your total Cash Balance as well as Total Payment Received per bank deposit. You can add descriptions by line item if preferred, or select "Back" if any information looks incorrect.

If everything appears in order, select "Create" to create your Cash Receipts Journal Transaction(s).


Cash Receipts Journal Transaction(s)

Cash Receipt Journal in PROCAS

Congrats, your cash receipt journal entries have been created in PROCAS! To access them, go to Accounting --> Accounts Receivable --> Cash Receipts Journal. If you need to modify your entries in any way, they can be edited on this screen.

For further assistance using Record Client Payments, you can reach out to us at

Utilizing PROCAS to Help Streamline your 1099 Process author avatar

PROCAS has built in procedures to help clients automate their 1099 & 1096 process.

Every January, accounting staff & business owners walk into the same old confusing process as they wake up from their holiday slumbers…

*Grabs coffee and begins annual research*

“What is a 1099 again?”

“How do I determine who should receive a 1099?”

“What are the different types of 1099s that need to be reported?”

“Ok… (takes deep breath), what in the world is a 1099-NEC?


“I don’t remember ever having to split out 1099-MISC payments from 1099-NEC (sighs).

*Completes reading new rules*

"I think I get it now, time to print these forms out.”

“THAT’s right, I can’t print them online. Need to swing by Staples to pick some up.”

*Purchases 1099-MISC & 1099-NEC forms*

“I only bought a box of 50 forms, why are there a billion papers in here.

"Oh yeah... I need to complete 5 form types for each vendor (facepalm)."

“When are all of these due and who do I send them to?”


Frustrated accountant attempting 1099 reporting

Fear not! We will break down this process in detail below and explain how PROCAS can help you simplify the reporting requirements. So, keep the Tylenol up in the cupboard, we aren’t going to need it!

The IRS offers a comprehensive breakdown of the changes made to 1099s and all associated forms, deadlines and penalties.


Editor's Note

This post takes into account the creation of the 1099-NEC (Nonemployee Compensation) form and changes made to the 1099-MISC forms by the IRS for the 2020 fiscal year, covered under the Forms & Deadlines section.

The IRS offers a comprehensive breakdown of the changes made to 1099s and all associated forms, deadlines and penalties.

If you have been using PROCAS to produce your 1099s in the past, we have already done the work in adjusting your system to the new forms and alignment. If not, proceed to learn how the process is completed!


What is a 1099 and why is it important?

1099-NEC & 1099-MISC forms are used to track income of organizations who are not established as corporations (or LLCs taxed as C or S corps). For most companies, 1099 forms will be used to provide an accurate representation of how much non-employees, vendors, sub-contractors, and consultants have been paid throughout the prior year. Because these people and businesses do not receive W-2’s for work performed, 1099s are what the IRS depends on to know how much they owe in taxes for the calendar year.


Who receives a 1099?

Determining who receives a 1099 can be a tricky process. To help, we’ve broken the decision-making tree into the following points:

1) Is the person in question an employee of your organization?

  1. YES – No need, they should have received a W-2.
  2. NO – Independent contractors and consultants will most likely need a 1099, proceed to Question 3.
  3. NOT SURE Consider the following questions:
    1. Do you provide benefits to this individual?
    2. Do you provide equipment, office space, or materials for the individual to complete their job?
    3. Do you reimburse business expenses incurred by the individual?
    4. Are you the sole client or primary client of the individual? And do you completely control their weekly workflow?
  4. NOT SURE – If you answered NO to all the above sub-questions, proceed to Question 3.
  5. NOT SURE – If you answered YES to any of the above sub-questions, you may be considered that individual’s employer in a court of law and may need to start providing W-2 information. Consider seeking a labor lawyer’s advice.

2) Is the vendor you purchased services from a corporation?

  1. YES – No need to send a 1099.
  2. NO – Sole Proprietorships and Partnerships will most likely need a 1099, proceed to Question 3.
  3. NOT SURE – LLC’s are the most confusing of the bunch. To determine how the company is taxed, please send a W-9 to that vendor’s accounting staff. Once returned,
    1. If taxed as S Corp or C Corp, no need to send 1099.
    2. If taxed as sole proprietorship or partnership, proceed to Question 3.

3) How much money was paid to individual or vendor?

  1. Anything less than $600 total for the calendar year does not require a 1099.
  2. Any payments totaling $600 or more will require a 1099.
  3. Common Exceptions:
    1. $10 or more in royalties will require a 1099
    2. In general, payments made to law firms will require a 1099
    3. If paid via credit card, a 1099 is not required (even in excess of $600). The credit card company will take care of the reporting for you.
    4. Business expense reimbursements for employees will not require a 1099.


Forms & Deadlines

For fiscal year 2020, the IRS has separated out nonemployee compensation from other standard types of miscellaneous payments into two forms – 1099-NEC & 1099-MISC.

1099-NEC forms now require the following payments be submitted:

  • Cash payments made to nonemployees
  • Prizes and awards for services performed by nonemployees
  • Cash payments for fish
  • Payments by a federal executive agency for services
  • Gross oil and gas payments for a working interest
  • Taxable fringe benefits for nonemployees

All other types of payments will still be listed on the 1099-MISC forms. Alignment of the remaining boxes on this form has shifted, which we have already adjusted for you in PROCAS! Please see Utilizing PROCAS to complete your 1099s for how we’ve modified to the new forms.

1099 Forms

Each set of forms contain 6 parts to be filled out and sent to their appropriate recipient(s):

  1. Copy A - For Internal Revenue Service Center
  2. Copy 1 - For State Tax Department
  3. Copy B - For Recipient
  4. Copy 2 - To be Filed with Recipient's State Income Tax Return, When Required
  5. Copy C - For Payer
  6. 1096 - Completed with each set of 1099s


While these forms can be generated around the same time, they typically are sent separately at different deadlines:

  1. January 31st
    1. File 1099-NEC Copy A forms and 1096 with the IRS
      1. DO NOT mix in 1099-MISC Copy A forms
      2. Can also e-file if preferred
    2. Send 1099-NEC Copy B forms to recipients
  2. February 28th
    1. File 1099-MISC Copy A forms and 1096 with the IRS
    2. Send 1099-MISC Copy B forms to recipients
  3. March 31st
    1. Deadline to e-file to the IRS for 1099-MISC Copy A forms and 1096



Failure to submit accurate 1099 forms by the required deadlines can be costly for businesses. The below charts are taken from the IRS's publication on potential penalties and fines for failure to submit 1099s.

Large Businesses with Gross Receipts of More Than $5 Million

Small Businesses with Gross Receipts $5 Million or Less

As you can see from the above charts, proper submission of 1099 forms to the IRS is one that should not be taken lightly.


Utilizing PROCAS to complete your 1099s & 1096s

PROCAS currently supports four types of 1099s: 1099-NEC (nonemployee compensation), 1099-MISC (all other payments), 1099-INT, and 1099-DIV, as well as 1096s. Each form can be generated out of the system by following these 3 steps:

  1. Determining which vendors/subcontractors require 1099s
  2. Establishing 1099 form type and box by vendor/subcontractor
  3. Generating 1099/1096 forms from PROCAS


1) Determining which vendors/subcontractors require 1099s

In order to find out who you paid money to in the prior year, please go to the following:

Accounting --> General Ledger --> General Ledger

Here, use the parameters next to the orange arrows below to generate a report for cash payments made in the following year.

  • If you conduct electronic batch payments (ACH or EFT), open up the account range to include AP accounts along with cash.

Once you’ve printed your report, please follow the above section “Who receives a 1099” to whittle down your list of possible vendors to those who should receive a form.


2) Establishing 1099 Form Type & Box by Vendor or Subcontractor

Now that you have your list of vendors and subcontractors, time to label their records as to which type of form they should receive. Please navigate to:

Setup --> Purchasing --> Vendors

And select the “Find” button or “F8” function key to begin searching for those vendors/subs. Once on the record of an applicable vendor/sub, select the “Payment Info” tab of the record to locate a box called “1099 Type & Box.”

If you click in this box, you can then select the “Lookup” button or “F9” function key to see the list of possible 1099 types.

From the above list, make the appropriate selection for each vendor/subcontractor as needed.

Editor's Note - 2021

1099-NEC in PROCAS

If you have established this list in prior years, we have remapped your vendors to the new form & box types. 1099-MISC07 has been modified to 1099-NEC01 for Nonemployee Compensation and remaining 1099-MISC boxes have been modified for the new form alignment. You do not have to complete any extra work in remapping existing vendors!!


3) Generating 1099 & 1096 forms from PROCAS

Once all 1099 types and boxes have been determined, navigate to the final menu:

Accounting --> Accounts Payable --> Forms 1099/1096

This screen will be broken into two separate parts to get the appropriate items needed to print your forms:

The header section of Forms 1099/1096 has specific parameters to determine which items will generate in the detail grid:

  • Reporting Year Date - Use the prior calendar year for as is required for reporting 1099/1096 amounts.
  • Cash Account - Use the cash account recorded in the GL for payments made to each vendor/sub (if left blank, all accounts will generate).
  • Batch Liability Account - If you make payments in batch from your bank account, enter the liability account used here. Leaving this area blank will populate all possible payments.
  • 1099 Type - Choose applicable 1099-NEC, 1099-MISC, 1099-DIV, or 1099-INT.
  • Minimum Amount - This will limit the results by taking the sum of all payments by vendor, and exclude them if the total is less than the minimum entered.
  • Search - Will populate below details.

In this detailed grid, select the payments made to each vendor if you are looking to include them on your forms. When all appropriate rows have been selected, print the proper 1099 or 1096 report from the below report bar.

  • Each column has the ability to sort items if you click the column header
  • Each column also has the ability to filter items if you select the filter icon to the right of each column header


Extra Help & Form Alignment

For additional help completing your 1099/1096 forms using PROCAS:

  • In the upper right hand corner there is a "?" symbol, which will provide in-system help for detailed instructions on any of the menus!
  • Feel free to reach out to our Support Team at
    • We can help align your report forms to your printer specs as well as help explain the process.



Types of DCAA Audits for Government Contractors author avatar

Audit Procedures

Being the largest purchaser of goods and services in the world, it is no wonder that businesses large and small want to work with the United States Federal Government. With an average of $500 billion spent annually, many view federal contract procurement as a potential revenue stream to grow their business. However, many of these companies do not consider all of the rules, requirements, and oversight that come with that potential revenue. Before jumping headfirst into government contracting, let’s take a look at the types of oversight a company can expect when doing business with the government.


What is a DCAA audit?

The Defense Contract Audit Agency is the auditing branch of the federal government. Under control of the Secretary of Defense, the branch’s main purpose is to make sure federally procured funds are being spent accurately and appropriately.

According to DCAA’s Information for Contractors publication, “DCAA performs all necessary contract audits for the Department of Defense and provides accounting and financial advisory services regarding contracts and subcontracts to all DoD Components responsible for procurement and contract administration.”

Essentially, what this means is that their primary goal is to ensure taxpayer dollars are spent on fair and reasonable contract prices. It is DCAA’s responsibility to serve public interest first and foremost.

In order to accomplish this, DCAA has a multitude of audit procedures to ensure that government contractors are kept in line. DCAA is especially concerned with contractors working on cost reimbursable contracts as opposed to those who provide fixed price work. This is because there is more room for error (and even fraud) when billing at cost.

Common DCAA Audit Types

Some of the most common DCAA audit types for companies providing cost-type work are as follows:

  1. Accounting System Requirements (Pre & Post Award) Audit
  2. Real-time Labor Evaluation Audit
  3. Provisional Billing Rates Audit
  4. Public Vouchers (Progress Payments) Audit
  5. Incurred Cost Submissions Audit

We will break down the first 4 of these common audit procedures below.


  • Incurred Cost Submissions are too involved to cover in an overview post. This audit type will be covered in a detailed post to follow.
  • There are many more types of audits that do take place, such as financial capacity, proposal adequacy, contract briefs, monitoring subcontracts, contract close outs, etc. The above 5 were selected for the accounting heavy folks in your organization!


1. Accounting System Review

Government agencies want to make sure your company is operating using proper accounting policies and procedures before providing funding for any cost type work. To do this, a contracting officer from said agency for said contract will request DCAA perform an accounting system audit on your company, which is broken down into two phases – the pre-award & post-award audits.

         Pre-Award DCAA Audit

The pre-award audit takes place before any cost type contracts are awarded to your company. This is the preliminary check that DCAA reviews to see if you have a proper accounting system in place to be able to handle the proposed contracts.

To start the process, a contacting officer or DCMA (Defense Contract Management Agency) will have you complete standard form 1408, which lists what’s required for your accounting system. Some requirements include segregation of direct costs from indirect costs, identification and accumulation of direct costs by contract, ability to allocate indirect costs consistently across cost objectives, etc. For a full list of what is required, please see our prior blog post How PROCAS Addresses the SF1408.

Once the SF1408 is completed and returned to the contracting officer/DCMA, DCAA will meet with your company to see if you have the capacity to perform on what was completed in the form. This is an upper level review that does not get into the nitty gritty of the system, but ensures you have the proper policies and procedures included with your accounting system. For more on what DCAA audit requirements will be necessary of your system, please see their related documents here.

         Post-Award DCAA Audit

The post-award audit takes place after your company has been performing on the awarded contract for some time. Typically, this is not too long after being awarded and is around 3-6 months (but can be earlier or later). The purpose of this phase of the audit is to make sure you are complying with the accounting policies and procedures specified in the pre-award.

During the post-award audit, you can expect the auditors to dig around your system more than the pre-award. This is a total accounting system review, which will include testing of your policies and procedures as well as data entry. Some examples of areas they could test include: segregation of duties, proper levels of access to data, correct revenue and expense recognition, trailing transactions from general ledger to invoicing, accurate labor distribution from timesheets to general ledger, etc. 

At the end of the day, DCAA wants a vote of confidence that you are operating as you said you would in the pre-award. Therefore, the auditor will take their time and conscientiously look through your system to make sure it does not have any holes.


2. Real-time Labor Evaluations

Also known as the “Help! DCAA auditors showed up at my door unannounced, and I don’t know what to do!” audit, real-time labor evaluations are checks to see if your people are working when they say they are working. For service-based contractors, labor is the largest piece of what is billed to the government, so it is of major concern to be monitored by the DCAA.

In these time check or “floor check” audits, the auditors are going to randomly select employees of your company and ask them simple questions to see how timesheet procedures are performed. Some of these procedures include completing time entries, determining how charge codes are created/selected, submitting timesheets, correcting/adjusting time entries, the approval process, access to employees’ timesheets, etc. Once these are confirmed, the auditors will meet with the accounting staff to see how timesheets are collected and labor is distributed with cost. They will want to see that specific cost journals in the general ledger match historic timesheets!

Some common deficiencies in timekeeping compliance that can lead to the failure of a real-time labor evaluation include:

  • The ability of more than 1 person to access an employee’s timesheet to record time
  • Improper selection of charge codes for work being performed (inaccurate use of labor categories, projects, etc.)
  • Inconsistent charging of time across contracts
  • Failure to track changes to employees’ time by audit trail (without reason)
  • Approvers overriding subordinate time without employee consent
  • Inconsistent method of applying labor cost to employee timesheets

In this DCAA audit, there is no warning for when the auditors are going to stop by. Therefore, it is important that your employees know your company’s policies and procedures at all times. We recommend having supervisors and management review these policies with your staff as frequently as possible. For more information to prepare for this surprise DCAA audit, please see click here.


3. Provisional Billing Rates

If specified in the provisions of a cost-type contract, contractors are allowed to be reimbursed for indirect costs via interim payments as opposed to waiting until the end of the contract. FAR 42.704 governs the procedures and guidance for establishing provisional billing rates, which is the effective way to approximate a contractor’s final year-end rates (adjusted for any unallowables). Provisional billing rates pose as an estimation of these final year end rates, which are trued up to actual indirect rates at the end of the contract’s fiscal year. More information on FAR 42.704(b) can be found here.

One major criterion for an adequate accounting system is that it provides for billings that can be reconciled to cost accounts for current and cumulative amounts claimed. The auditor is going to check to make sure your system can handle this process within the Accounting System Review audit. However, once approved, the contractor is still going to have to submit provisional billing rates to its DCAA Office or administrating contracting officer every fiscal year included in the contract.

According to DCAA audit requirements, provisional billing rates should be:

  • Submitted at the beginning of each fiscal year or when established billing rates are no longer accurate in representing final year rates (unforeseen circumstances)
  • Representing a 12-month period (contractor’s fiscal year)
  • Submitted at least annually and electronically (if possible)
  • Provided in an Excel format

According to DCAA audit requirements, provisional billing rates should contain:

  • Proposed billing rate calculations (including rationale)
  • Prior fiscal year pool and base
  • Current fiscal year to date pool and base
  • Current fiscal year budget pool and base (if available)
  • Comparative analysis with explanation of significant differences (if applicable)

Penalty: If the above measures are not taken, vouchers and progress payments can be held/returned until appropriate measures are taken to adjust billing rates. This not only hurts your cash flow but can affect all future invoices!


4. Public Vouchers (Progress Payments)

Following the same thought process described above, contractors can claim interim payments on work performed throughout their fiscal year. According to DCAA, cost type contracts allow for payments for costs on a Standard Form 1034 public voucher or equivalent. Typically, contracting officers have slight variations on how they would like their invoice to look, however the audit process will look similar for checking how the records of each invoice are maintained. For a look into all of the contractor’s and DCAA’s responsibilities in establishing progress payments, please click here.

Voucher audits are conducted by DCAA to determine the accuracy of costs billed to the government. DCAA auditors will use sample testing to track individual invoices from submitted government invoice in WAWF to the general ledger and job cost report and eventually to the source documents supporting the billed voucher.

Looking at your accounting records, an auditor will check for:

  • Compliance between the invoice and contract terms
  • Accuracy of billed costs to recorded costs (current and cumulative)
  • Consistent application of labor distribution
  • Consistent allocation of indirect rates using established provisional billing rates
  • Segregation of unallowable costs from allowable costs (unallowables cannot be invoiced)
  • Timely payments to vendors and subcontractors
  • Appropriate source documentation for billed costs

Penalty: If the above measures are not taken, vouchers and progress payments can be held/returned until appropriate measures are taken to adjust your invoices. This not only hurts your cash flow but can affect all future invoices!


At the end of the day, DCAA wants to make sure the public’s money is being spent appropriately. The above measures can seem very intimidating, so it is important that your company is aware of all the rules and regulations that need to be followed. Remember, you always have the right as a contractor to ask why an auditor needs what they are requesting from you. If anything appears to be unrelated to the measures described in each audit above, you have the right to know why it is required. If any PROCAS clients need help through any of the above audits, feel free to reach out to our consulting team at