Inquiry: I would like to go through the process of reviewing our numbers and setting up the allocation spreadsheets so that I am confident regarding our percentages (Fringe, OH, G&A, etc).  What do you propose is the most efficient & least costly method to accomplish this?  Thank you. Senior Engineer CCNA

Response: It is good to see another engineer seeking to understand the cost and pricing side of the business.  You will definitely increase your value to the company and all current and potential customers.

First, you can develop your own spreadsheets in excel to match the ones included in the workbook exercise solution materials.  Then input your numbers and use the reconciling figure on the G&A schedule to tie into the financial statement on the first page. Some have done this, but most people who are looking to get a quick and accurate look at results will try the second option as follows:

Secondly, to save time and money, you can download the e-file of the exercise solution as a template.  It is very inexpensive and is available at a discount to registered community members (see Summary below).  The low price is really to recoup some of the administrative costs to develop the spreadsheet and on-site carrying costs.

With the electronic spreadsheet, many people have went in and replaced the numbers on the Income & Expense Report (Page 1) for the current year-to-date period, with their own numbers (placing their expenses in accounts as close to the ones listed as possible or even change the descriptions to match theirs and then putting zeros in those that do not apply.

Make Sure You Do Not Over Write Any Formulas!  I would recommend you lock or protect any cells that have a formula in them until you are ready to change the cell to meet your needs. 

Once you do this you will find many of the percentages will be calculated for you for your actuals on the supporting pages.  You can then go in and input any projected changes on the spreadsheets for out years and get a good basic estimate of what your percentages will look like. 

Dont forget to account for any increase in Direct Costs and Indirect Costs in the out years.

If you have accounted for all of your expenses, the G&A spreadsheet total on the bottom will tie out to your total on the Income and Expense Report on the first pages after adjusting for Unallowables.  If the numbers do not tie in then that means you forgot to put a number in the right place or you left one out.  When I go through this process and the numbers do not reconcile, I merely go through each item carefully again, and the oversight (nice word for error) always pops up.

Its pretty neat to work through and see the results

So, In My Humble Opinion, that is the most efficient and definitely least costly way to review your numbers straight from your financials.

Let me know how things turn out!