(Editor’s Note. The high number of relevant questions received lately along with our unusual letter to DCAA means we will not provide a feature article this issue but will provide an expanded Q&A section.)
Q. As President of a small business, in what instances should I charge my time to Overhead and what instances should I charge my time to G&A? Can you give me examples of the type of activities in each category?
A. Yes, the President should be able to charge his time as G&A, overhead or direct. If you have them, you should follow the guidelines reflected in your written policies and procedure. If you don’t have them, G&A is considered to be effort related to overall management of the company while overhead is in support of contract work that can not be identifiable to a particular contract. Examples of G&A would be board meetings, marketing effort, overall corporate activities. Examples of overhead might be meeting with project management, contracts activities, Q&A. In practice there is a great deal of flexibility in how to handle these costs. If you want to be more certain of avoiding challenges, write up some policies related to labor charging of executives.
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