INDIRECT COST RATES
Maintaining effective indirect cost rate management
WHAT IS AN INDIRECT COST RATE?
Simply put.....it's a rate, expressed as a percentage, used to recover overhead and administrative costs.
Five Common Rate Structures:
Fringe and F&A Rate
Modified Fringe and F&A Rate
Overhead and G&A Rate
Fringe, Overhead and G&A Rate
WHY YOU NEED ONE
Your funding may require one and it's a good business practice.
Some agencies and funding types, require you to have a negotiated rate. For example if you have FAR clause 52.216-7 in your award, you need one and they are subject to audit.
If not required to negotiate a rate, you should develop one so that you know all of your costs.
It helps you prepare better budgets and manage cash flow.
THE #1 MISTAKE
Using a rate that is too low, resulting in insolvency.
It is critical to develop an appropriate rate for your particular business.
Continuously monitor, understand and manage your rates, so that you can make informed strategic decisions.
I CAN HELP
I work with my clients through the entire indirect cost rate cycle; from development through audit and closeout.
Develop indirect rate for your particular business.
Negotiate rates with the Federal Agency on your behalf.
Establish provisional rates.
Monitor your actual rates, comparing budgeted and provisional.
Rate planning and analysis for strategic decisions.
Final rate application and closeout.
Prepare incurred cost submissions/ICE. (Due 180 days after your fiscal year end)