Contract Closeout — Controller Guide
Closeout is the formal end-of-life of a contract. After the work is done and the period of performance is over, the contract still needs to be settled: the final invoice sent, subcontracts closed, any government property disposed of, and — on cost-reimbursable work — the indirect rates finalized. This guide explains what closeout involves, then walks the exact clicks in Arcvue to track a contract through its closeout checklist. It assumes you run a business but aren't necessarily a career government accountant.
For: controllers · Time: ~10 minutes · You'll need: the Accounting module.
The closeout queue is at Accounting → Contracts → Closeout (/accounting/closeout, page header: Contract Closeouts). A single contract's closeout checklist is at /accounting/closeout/:contract_id (page header: Contract Closeout — contract {id}). The easiest way to start one is from Accounting → Contracts → Contracts (/accounting/contracts). A contract whose period of performance ended 90+ days ago with no closeout open carries an amber Start closeout control beside its period of performance. The Closeout Due button above the list narrows it to exactly those contracts.
Part 1 — The ideas you need first (read once)
Why a contract needs a formal closeout
When a contract's work ends, it isn't automatically "done" in accounting terms. There can be a final invoice still to send, subcontracts still open, government property to dispose of, patent/rights reports to file, and — on cost contracts — indirect rates to finalize. Closeout is the disciplined process of settling all of that so the contract can be closed with no loose ends, and so it stops showing up as an open obligation. Arcvue tracks closeout as a six-item checklist you work down until it reads 100%.
The three closeout types
When you start a closeout, Arcvue asks which kind it is. The choice is recorded on the closeout and shown in the queue:
- Standard — the ordinary full closeout: final invoice, subcontracts, property, reports, and final indirect rates all settled.
- Quick closeout (FAR 42.708) — the faster route the FAR allows for eligible contracts (smaller ones, or where the unsettled indirect amounts are within the FAR 42.708 thresholds). It lets you close on negotiated/settled rates without waiting for the full incurred-cost audit cycle. The queue flags which contracts look eligible.
- Final indirect rate — used when the closeout is being driven specifically by the settlement of final indirect rates.
Provisional vs. final rates (why the last checklist item matters)
Cost-reimbursement and T&M contracts bill during the year at provisional indirect rates. At closeout, once final (audited/settled) rates are known, the billed amounts are trued up — you may owe money back or be owed more. The checklist's Indirect rates finalized item is where you confirm that settlement has happened. Arcvue does not decide final rates for you; those come from your settled/negotiated indirect rates (see the Indirect Rates guide), and the closeout simply records that they're locked in.
What this page does — and what it doesn't
The closeout screen is a tracking checklist, not a calculator. It records that each closeout obligation is complete; it does not itself generate the final invoice, compute the rate true-up, or produce the SF-1034 voucher. Those live in their own modules (Invoices, Indirect Rates, ICS). Think of the checklist as the controller's single source of truth for "is this contract actually ready to close, and what's left?"
What Arcvue deliberately will not do
- It won't invent a closeout for you — you initiate one explicitly, choosing the type.
- It won't decide final rates for you — those come from the settled/negotiated indirect rates; the checklist only records that they're finalized.
Part 2 — How to run it
Step 1 — Open the closeout queue
In your browser, go to /accounting/closeout. The page header reads Contract Closeouts, with the subtitle "FAR 42.708 closeout queue. Click a row to view the checklist + finalize."
The table lists every contract that already has a closeout, one row each, with these columns:
- Contract — the contract number (a teal link) and, if set, its name.
- Type —
standard,quick_closeout, orfinal_indirect_rate. - Closed as — why the contract closed, as stated when it was closed: Completed, Expired, Terminated for convenience, or Terminated for default (blank when the close predates the kind).
- Status — a colored badge:
initiated,in_progress,co_approved, orclosed. - Initiated, CO Approved, Closed — the dates each milestone was reached (a dash if not yet).
- Checklist — how far down the six-item checklist this contract is, as a percentage.
- Quick? — a green ✓ when the contract looks eligible for quick-closeout under FAR 42.708, a dash otherwise.
Use the status dropdown in the top-right (default All statuses; options Initiated, In progress, CO approved, Closed) to narrow the list to one stage.
If the page reads "No closeouts yet. Initiate one from a contract detail page," nothing has been started. Start one with Step 2. The contract's own detail page has no closeout control; the start is on the Contracts list.
Step 2 — Initiate a closeout for a contract
To start a new Standard closeout, go to Accounting → Contracts → Contracts (/accounting/contracts) and click Closeout Due above the list. That shows only the contracts, within the status you have selected, whose period of performance ended 90+ days ago with no closeout already open. Each carries an amber Start closeout control beside its period of performance:
- Click Start closeout. Arcvue asks you to confirm: "This opens a closeout record and its checklist. It does not close the contract or touch any money."
- Confirm. A Standard closeout starts, a toast reads "Closeout initiated" with an Open checklist action, and the control disappears from that row because the closeout now exists.
For a Quick closeout (FAR 42.708) or a Final indirect rate closeout, go to the contract's closeout page instead, /accounting/closeout/{contract_id}. Its header reads Contract Closeout — contract {id}. With no closeout yet you'll see "No closeout exists yet for this contract," a Type dropdown, and an Initiate closeout button:
- In the Type dropdown, choose Standard, Quick closeout (FAR 42.708), or Final indirect rate (see Part 1 for which applies).
- Click Initiate closeout. A toast confirms "Closeout initiated," and the page reloads into the checklist view.
Step 3 — Work the six-item checklist
Once a closeout exists, the page shows three summary cards across the top — Type, Status, and Checklist (the percent complete, in green) — and below them the checklist table. Tick each item as you complete the real-world work behind it. Each checkbox saves the moment you click it.
The six items, in the order they appear:
| Checklist item | What you're confirming |
|---|---|
| Final invoice generated | The final invoice/voucher for the contract has been produced (in the Invoices module) and sent. |
| All deliverables accepted | Every CDRL/deliverable has been delivered and formally accepted by the customer. |
| Subcontracts closed | Every subcontract under this prime is itself closed out. |
| Property disposed | Any government-furnished or contractor-acquired property has been dispositioned per contract terms. |
| Patent reports submitted | Required patent/rights and final reports (e.g., DD 882) are filed. |
| Indirect rates finalized | Final (or quick-closeout) indirect rates are settled and the provisional-to-final true-up is resolved. |
| Termination settlement proposal submitted | Shown only when the contract was closed as Terminated for convenience: the termination settlement proposal (FAR 49.206) has gone to the contracting officer. A completion or an expiry has no such item, and the Checklist percent counts this seventh item only for a termination. |
As you check items, the Checklist card and the queue's Checklist column tick upward. When all six are checked it reads 100% — that's your signal the contract is genuinely ready to close.
Do Indirect rates finalized last on cost-reimbursable work. It depends on settled rates, and the true-up (a refund to the government or an additional amount to you) has to be worked in the Indirect Rates / ICS modules first. See the Indirect Rates guide for developing and filing final rates.
Step 4 — Track it to closed
The closeout's Status advances as the work and government-side approvals progress — from initiated → in_progress, then co_approved once the contracting officer signs off, and finally closed. The queue shows the CO Approved and Closed dates as they land, so you can see at a glance which contracts are waiting on the CO and which are done. A closed closeout is the record that the contract carries no remaining obligations.
Part 3 — When something looks wrong
"A finished contract still shows an open obligation"
Its closeout isn't complete. Open its checklist at /accounting/closeout/{contract_id} and read which of the six items is still unchecked — a final invoice not yet generated, a subcontract still open, property not dispositioned, reports not filed, or indirect rates not finalized. Each is a loose end closeout exists to settle.
"The contract isn't in the Contract Closeouts queue"
The queue only lists contracts that already have a closeout. If a finished contract is missing, no closeout has been initiated for it yet — start one with Step 2 (with Start closeout on the Contracts list, or by going to its /accounting/closeout/{contract_id} page).
"Am I eligible for quick-closeout?"
Look at the Quick? column in the queue — a green ✓ means the contract looks eligible under the FAR 42.708 thresholds (contract size and the size of the unsettled indirect amounts). If eligible, choose Quick closeout (FAR 42.708) as the type so you can close on settled rates without waiting for the full audit; if not, the contract waits for final rate settlement.
"The final invoice differs from what I billed during the year"
That's expected on cost/T&M contracts — you billed at provisional rates and the final invoice reflects final rates. The difference is the true-up (a refund to the government or an additional amount to you). It should tie to the rate change applied to the year's costs; work and file those rates in the Indirect Rates and ICS modules, then check Indirect rates finalized here.
"I can't find where to generate the final voucher or record the deobligation on this page"
Those aren't on the closeout checklist — this page tracks whether each obligation is done, not the mechanics. Generate the final invoice/voucher in the Invoices module, finalize rates in Indirect Rates / ICS, then return here and tick the matching checklist item.
One-line summary
Closeout tracks a finished contract to a clean end: start a closeout (Standard from Start closeout on the Contracts list; Quick FAR 42.708 or Final indirect rate from the contract's closeout page), then work the six-item checklist — final invoice generated, deliverables accepted, subcontracts closed, property disposed, patent reports submitted, indirect rates finalized — to 100% and on to closed, so no completed contract keeps carrying open obligations.
Related
- Develop and file final indirect rates → Indirect Rates — Controller Guide
- Freeze a month before you settle final numbers → Close a Month (Period Close)
- Generate the final invoice/voucher → Invoices