What a DCAA Timesheet Should Capture
A timesheet should contain enough information to identify the employee, reporting period, hours worked, and activities to which labor is charged. The exact fields vary by contractor and contract environment, but the underlying principle is that recorded labor should be traceable to actual work performed.
- Employee identification and applicable reporting period.
- Hours worked by contract, project, task, or authorized charge code.
- Direct and indirect labor classifications where applicable.
- Leave or other non-worked time according to company policy.
- Employee submission and appropriate supervisory approval.
- Documented corrections that preserve the history of the original entry.
Employees should record their own time based on actual work rather than adjusting hours to match a predetermined budget, billing target, or expected cost distribution.
Employee and Supervisor Responsibilities
Employees are responsible for entering time accurately and within the organization's established reporting schedule. They should understand charge codes, project assignments, direct and indirect activities, leave procedures, and the approved method for correcting errors.
Supervisors provide an important review control by confirming that submitted hours reasonably correspond with the employee's assignments and known work activity. Approval records should identify the reviewer and provide evidence that the timesheet was reviewed through the established process.
The DCAA Timekeeping & Labor Cost Tracking Guide provides educational guidance on DCAA timekeeping requirements, labor cost tracking, compliance practices, and maintaining audit-ready labor records. It can help contractors connect timesheet procedures with broader labor-cost controls.
Corrections and Audit Trails
Timesheet corrections should be handled through a controlled process. When an employee identifies an incorrect charge, the organization should retain enough information to establish the original entry, corrected entry, person making the change, timing of the adjustment, and applicable approval.
An audit trail is especially useful when labor information flows into payroll, project accounting, billing, or government contract cost reporting. The record should allow authorized reviewers to understand how the final labor amount was derived without losing the history of earlier entries.
Timesheet Approval Checklist provides a related framework for reviewing approval activities within broader finance and business workflows. Contractors can adapt similar review principles to their own timesheet approval procedures and control environment.
Timesheet Systems and ERP Integration
Timesheet data often becomes part of a larger accounting workflow. Approved labor can feed payroll, project costing, billing, indirect cost allocation, and financial reporting. The integration should preserve key information such as employee, project, contract, task, labor category, charge code, hours, approval status, and accounting period.
Organizations evaluating their broader ERP environment can use DCAA-Compliant ERP: 2026 Buyer's Guide + AI Audit Tips to understand ERP selection, migration, ERP integration, clean-core architecture, and extending finance workflows around an ERP.
Timesheet Software Finance describes the use of timesheet software within broader finance and business workflows. For government contractors, system configuration should reinforce documented labor policies and preserve appropriate records throughout the accounting process.
Procurement and Tax-Related Controls
Timesheet requirements primarily govern labor reporting, but government contractors also need coordinated financial controls. Procurement workflows should maintain clear authorization for requisitions, sourcing, approvals, and spending. When project spending is associated with a purchase order, finance teams can maintain appropriate links between authorized purchases and the projects or contracts they support.
Tax controls may also intersect with project-related financial transactions. Finance teams should validate applicable jurisdiction rules, nexus, exemptions, tax classifications, and potential overcharges. The distinction between sales tax and use tax can be relevant when determining the appropriate treatment of taxable purchases and supporting documentation for an audit.
Related Software and Compliance Practices
Legal Timesheet Software covers software used for timesheet activities within legal and broader business workflows. Although government-contract labor requirements have their own considerations, reviewing related software concepts can help organizations distinguish general time-recording capabilities from controls specifically designed around government contracting.
Organizations should also keep their timesheet procedures aligned with written policies, employee training, system permissions, supervisory review, and applicable record-retention requirements. A timesheet system is most useful when the technology, documented procedures, and actual employee practices consistently reinforce one another.
Best Practices for DCAA Timesheets
Contractors should periodically review sample timesheets, approval histories, corrections, charge-code usage, access permissions, and the transfer of approved labor data into accounting systems. These reviews can identify whether documented procedures remain consistent with actual operating practices.
Training should explain that employees record actual work performed, use the correct charge classification, submit time promptly, and correct errors through the approved process. Supervisors should understand their responsibility for reviewing submitted time rather than treating approval as a purely administrative step.
Maintaining clear evidence at each stage helps contractors support accurate labor costing, reliable financial reporting, contract billing, and organized audit preparation.
Summary
DCAA Timesheet Requirements focus on accurate recording of actual labor, appropriate contract and activity classification, timely submission, supervisory approval, controlled corrections, audit trails, and record retention. When these practices are supported by suitable software, ERP integration, and documented procedures, contractors can maintain traceable labor records and stronger financial reporting throughout the contract lifecycle.