Recently, I surveyed government contracting (GovCon) companies to better understand how confident they are in their accounting practices. The results were eye-opening, but not entirely surprising. Over the years, I’ve often heard casual reassurances from business leaders about why rigorous accounting practices weren’t viewed as critical. Common responses included:
- “We’re too small…no one is going to care.”
- “I have resources available to pitch in if we need more help”
- “We have a CPA doing our books, so we’re fine.”
- “We don’t need to follow GAAP because we’re a small business.”
- “What we’re doing is good enough.”
- “We have an accounting system that gives us what we need”
While these perspectives may feel reasonable in the moment, they overlook an important reality: expectations around accountability, transparency, and compliance in government contracting continue to rise regardless of company size. And this has never been more evident than in 2025.
A Shifting Environment for Accountability
Over the past year, a clear trend has emerged that GovCon businesses should not ignore. There has been increased emphasis across the federal landscape on understanding how public funds flow, how they are managed, and whether they are used as intended. This scrutiny often begins at the agency level, focusing on oversight, internal controls, and program integrity. Historically, that attention does not stop there.
When federal dollars are examined, the natural next step is to follow those funds downstream. Ultimately, they reach contractors—prime and subcontractors alike. This means that even organizations that previously felt insulated from oversight may now find themselves subject to closer review.
Larger government contractors often have the infrastructure, systems, and resources to absorb heightened scrutiny with minimal disruption. Small and mid-sized contractors, however, can feel the impact much more acutely—particularly if their accounting practices were built informally or have not evolved alongside regulatory expectations.
Lessons from Recent Reviews and Audits
Recent reviews of small business programs, including audits of the SBA 8(a) program, reinforce an important message: examinations are not limited by company size, tenure or socio-economic status. Participation in these programs brings opportunity, but it also brings responsibility. Organizations that previously assumed their existing practices were sufficient are now facing pressure to demonstrate compliance, documentation, and financial discipline at a higher standard than before.
For companies that once believed they were “too small to matter”, or “what we do is good enough”, these developments can feel sudden and overwhelming. In reality, they are part of a broader, long-term shift toward stronger financial governance across the GovCon ecosystem.
Why Quality Accounting Is a Strategic Imperative
This is why we consistently emphasize the importance of using a qualified organization to manage government contracting accounting. Strong accounting is not just about compliance—it is about protecting your business. Poor or underdeveloped practices can expose companies to unnecessary risk, including:
- Increased audit findings
- Program eligibility challenges (such as status changes in small business programs)
- Payment delays or questioned costs
- Reputational damage
- In the worst cases, contract loss
Many companies assume they will have time to fix issues if scrutiny ever comes their way. In practice, by the time problems surface, the window to respond is often very small.
Even organizations with capable internal accounting teams can benefit from an independent, third-party review. An objective assessment can identify gaps, validate existing processes, and help ensure that systems and controls are aligned with current and future expectations.
Looking Ahead
The takeaway is simple: quality accounting is no longer optional, and it is no longer something that can be deferred until later. The environment is evolving, and early preparation is far less costly than reactive correction.
If you want to avoid a potential “car crash” scenario for your business, now is the time to take a hard look at how your accounting practices are structured, documented, and managed. Partnering with a qualified organization—such as BlueStreet—can help you strengthen your foundation, mitigate future risk, and position your company for sustainable growth in an increasingly accountable GovCon environment.