Set up indirect cost plans to simulate and determine the indirect cost composition and target rates as required by FAR Subpart 31.2-Contracts with Commercial Organizations.
To set up an indirect cost plan, you need the setup for:
| Name | Responsible | Description |
|---|---|---|
|
Set up indirect cost plan |
Accounting manager |
Set up indirect cost plans to simulate and determine the indirect cost composition and target rates as required by FAR Subpart 31.2-Contracts with Commercial Organizations. You can have several indirect cost plans with different dates, rates, structures, and formulas. |
|
Set up account structures for indirect cost plan |
Accounting manager |
For the indirect cost plan, link the applicable cost pools to the applicable general ledger account structures. For example, link the overhead cost pool to the general ledger account structure for overhead expenses, such as rent or utilities. Note: Before you can link general ledger account structures to cost pools, you must have set up your account structures in the general ledger. |
|
Set up tiered indirect costs structure |
Accounting manager |
You can apply a tier structure to indirect cost pools, also called cascading or waterfalling pools. You can set up indirect cost pools that apply allocations to other indirect cost pools. For example, apply overhead costs to fringe benefits or apply general and administrative expenses across other indirect cost pools. |
|
Set up formula for indirect cost plans |
Accounting manager |
Set up the formulas for the indirect cost plan to calculate target rates. These formulas are used in the month-end rate update process and to create cost adjustments. |
|
Simulate and define target rates for indirect cost plan |
Accounting manager |
Run simulations for different indirect cost pools as related to the direct costs to calculate target rates. Run simulations for each combination as needed to determine the value to use for your target rates. |
|
Add target rates manually to indirect cost plan |
Accounting manager |
You can manually add target rates to your indirect cost plan. |
|
Submit indirect cost plan for approval |
Accounting manager |
If an indirect cost plan is properly set up, submit the indirect cost plan for approval. |
|
Approve indirect cost plan |
Chief financial officer |
Approve or reject the indirect cost plan following the applicable workflow. |
|
Activate indirect cost plan |
Accounting manager |
Once approved, you can activate the indirect cost plan. This will make it ready for use. |
| Name | Responsible | Description |
|---|---|---|
|
Set up indirect cost plan |
Accounting manager |
Set up indirect cost plans to simulate and determine the indirect cost composition and target rates as required by FAR Subpart 31.2-Contracts with Commercial Organizations. You can have several indirect cost plans with different dates, rates, structures, and formulas. |
|
Set up account structures for indirect cost plan |
Accounting manager |
For the indirect cost plan, link the applicable cost pools to the applicable general ledger account structures. For example, link the overhead cost pool to the general ledger account structure for overhead expenses, such as rent or utilities. Note: Before you can link general ledger account structures to cost pools, you must have set up your account structures in the general ledger. |
|
Set up tiered indirect costs structure |
Accounting manager |
You can apply a tier structure to indirect cost pools, also called cascading or waterfalling pools. You can set up indirect cost pools that apply allocations to other indirect cost pools. For example, apply overhead costs to fringe benefits or apply general and administrative expenses across other indirect cost pools. |
|
Set up formula for indirect cost plans |
Accounting manager |
Set up the formulas for the indirect cost plan to calculate target rates. These formulas are used in the month-end rate update process and to create cost adjustments. |
|
Simulate and define target rates for indirect cost plan |
Accounting manager |
Run simulations for different indirect cost pools as related to the direct costs to calculate target rates. Run simulations for each combination as needed to determine the value to use for your target rates. |
|
Add target rates manually to indirect cost plan |
Accounting manager |
You can manually add target rates to your indirect cost plan. |
|
Submit indirect cost plan for approval |
Accounting manager |
If an indirect cost plan is properly set up, submit the indirect cost plan for approval. |
|
Approve indirect cost plan |
Chief financial officer |
Approve or reject the indirect cost plan following the applicable workflow. |
|
Activate indirect cost plan |
Accounting manager |
Once approved, you can activate the indirect cost plan. This will make it ready for use. |
| Related to | Notes |
|---|---|
|
Set up indirect cost plan |