How the Deadline Works
The deadline is tied to the contractor's fiscal year-end rather than a universal calendar date. For example, a contractor whose fiscal year ends December 31 generally has a six-month submission period following that year-end, making June 30 the end of that six-month period.
Contractors should establish an internal Submission Deadline Management process that tracks the fiscal year close, supporting schedules, management review, certification, and final submission. FAR permits reasonable extensions for exceptional circumstances when requested in writing and granted in writing by the contracting officer.
What Must Be Ready Before Submission
Meeting the deadline requires more than completing a cover document. The final indirect cost rate proposal should be supported by financial records that reconcile claimed costs with the accounting system and explain the pools, allocation bases, and rates used. Typical supporting information includes G&A and overhead pools, allocation bases, direct costs by contract, cumulative claimed and billed costs, subcontract information, payroll reconciliation, and other required schedules.
Contractors should also verify costs classified as Business Expense Incurred and Employee Expense Incurred so that the underlying accounting records support the amounts included in the proposal. Accurate source data helps finance teams complete schedules and respond efficiently to subsequent audit questions.
Deadline Preparation and Financial Controls
A practical preparation process begins before fiscal year-end. Finance teams can establish a close calendar, assign schedule owners, reconcile the general ledger, review indirect cost pools, validate allocation bases, and maintain documentation throughout the year.
Procurement records can also affect the quality of supporting data. The procurement process should maintain clear requisitions, approvals, sourcing records, purchase orders, and spend documentation so costs can be traced to the appropriate accounting treatment.
For purchasing controls, a Duplicaton Check can check for duplicate purchase requests using current inventory and existing PR data across cost centers. A purchase order should also be connected to the underlying approval and accounting records when it supports a claimed cost.
Payments, Reconciliations, and Supporting Evidence
Payment records are another part of maintaining reliable financial evidence. Finance teams can review supplier invoices, payment timing, approvals, discounts, and cash outflow while reconciling transactions to the accounting records. vendor payment controls can help maintain consistent evidence for transactions included in financial reporting.
A Purchase Order Inventory Management System can connect purchase orders with inventory information and support vendor integration, compliance, and cost-control workflows. These records can help finance teams trace purchasing activity when preparing supporting schedules for an incurred cost submission.
Managing Cash and Payment Timing During Close
Although the incurred cost submission deadline focuses on the final indirect cost rate proposal, the close process also provides an opportunity to coordinate payment decisions with financial reporting. Early Payments Recommendations can review early payment discounts, vendor terms, and cost of capital to recommend when to pay, while supporting payment approvals and processing.
For receivables workflows that contribute to broader financial reconciliation, AR Automation Software can automate manual collection followups and matching of payments with invoices to reduce DSO by 40% and reconciliation cost by 80%.
After the Submission Deadline
Submission is followed by an adequacy review and, when applicable, an audit and negotiation process. FAR 42.7 states that the cognizant auditor reviews whether the proposal is adequate for audit and identifies inadequacies that need resolution. The required content and supporting data can vary according to the contractor's business type, size, and accounting system capabilities.
After final indirect cost rates are settled, FAR 52.216-7 requires the contractor to update billings and the cumulative schedule of direct and indirect costs claimed and billed within 60 days. For a physically completed contract, the contractor generally must submit a completion invoice or voucher within 120 days after settlement of final annual indirect cost rates for all applicable years, unless a longer period is approved in writing.
Best Practices for Meeting the Deadline
- Set the internal close calendar well before the six-month regulatory submission period ends.
- Reconcile the general ledger, claimed direct costs, indirect pools, and allocation bases before final schedule preparation.
- Maintain supporting documentation throughout the fiscal year instead of waiting until the submission window.
- Assign owners and review checkpoints for each required schedule and certification.
- Use Unlimited Access to support finance workflows with automated onboarding, role-based configurations, and 24/7 availability for users.
Summary
The Incurred Cost Submission Deadline generally falls within six months after the expiration of a contractor's fiscal year under FAR 52.216-7. Meeting it requires accurate actual-cost data, reconciled accounting records, complete supporting schedules, appropriate certification, and timely coordination with the contracting officer and auditor. A structured close process helps contractors maintain reliable financial reporting while supporting final indirect cost rate settlement and subsequent contract closeout activities.