1. What Steightment is
Steightment is an AI-assisted bookkeeping + fractional-CFO platform with a specialty most bookkeeping tools ignore: organizations that spend federal grant or contract money.
A coffee shop's books answer "are we profitable?" A grant recipient's books must also answer, per award, "did every dollar go to an allowed purpose, can I prove it, and can I produce the reports the government requires?" Steightment is built to answer the second question.
2. Why grant bookkeeping is different — the one big idea
Ordinary bookkeeping tracks money by category (rent, payroll, software). Grant bookkeeping must additionally track money by award — each grant/contract is its own little ledger with its own budget, rules, time period, and reporting. The same $4,000 flight is simultaneously a "Travel" expense and a charge against a specific award's Travel budget line.
Three consequences that shape the whole product:
- Every dollar needs a home. Expenses are tagged to an award (and often a site/project). Untagged federal spend is a finding waiting to happen.
- Not every dollar is allowed. Federal rules declare some costs unallowable — you spent the money, but you may not bill the government for it.
- The books must produce specific documents — a SEFA, an SF-425, a payment request — on the government's terms.
3. How grant money actually flows
Most federal awards are cost-reimbursement: you spend first, then ask to be paid back.
Award issued (budget + period of performance) -> you incur costs (payroll, travel, consultants, supplies...) -> you tag each cost to the award + verify it's allowable -> the responsible person approves it (the PI) -> you draw down / request reimbursement (payment request or PMS drawdown) -> you file financial reports (SF-425); at year-end everything rolls into the SEFA -> if federal spend crosses $1,000,000 in a fiscal year -> a Single Audit
Steightment instruments each step. The rest of this primer maps features onto this flow.
4. The direct / indirect / unallowable split (learn this cold)
Every expense a grant touches is one of three things:
- Direct — assignable to a specific award (a consultant on that project). Billed to the award.
- Indirect (F&A, overhead) — costs that benefit many awards and can't be pinned to one (rent, admin, IT). Recovered through an indirect rate, not line-by-line.
- Unallowable — costs the government will never pay for (alcohol, entertainment, lobbying, fines, first-class airfare). You can spend the money; you just can't charge it to the award, and it's excluded from indirect math too.
In Steightment: the Cost Classification screen tags each chart-of-accounts category; the AI unallowable flag catches individual transactions that look unallowable even inside an allowable category.
5. Indirect cost recovery in one worked example
Your award has a 15% de minimis rate. This year you booked $100,000 of allowable direct costs, of which $5,000 was equipment. Equipment is excluded from the indirect base (a rule). So:
MTDC (base) = $100,000 − $5,000 = $95,000
Indirect recovery = 15% × $95,000 = $14,250
You bill $95,000 direct + $14,250 indirect = $109,250 (equipment is billed as direct but earns no indirect on top).
Steightment computes this for you and puts it on the award report and the payment-request PDF. Done wrong or in a spreadsheet, this is exactly where small grantees leak money or get findings.
6. The approval workflow (the "PI")
On research/grant awards, a Principal Investigator (PI) is personally accountable for how the money is spent ("the go-to-jail person"). So Steightment supports a PI approval step: when it's on, expenses above a threshold (or any award-tagged expense) don't become final until the PI signs off.
Roles: an advisor/bookkeeper prepares; the PI (client role) approves; an external accountant can review and raise questions but cannot change the books.
7. Period close & the audit trail
Once a month is reviewed, you close it — after that, its booked transactions are locked; corrections happen through a reopen, not a silent edit. Every change is written to an append-only audit log, and supporting documents (invoices, receipts, timesheets) link to the transactions they justify.
This is what "audit-ready" means in practice: an auditor can trace any number on a federal report back to a locked transaction and its evidence.
8. The reports Steightment produces (and who wants them)
| Report | Who wants it | What it shows |
|---|---|---|
| Budget vs. actuals (per award) | PI, program officer, you | Spent vs. budgeted by category, % consumed, burn rate, projected exhaustion |
| Payment request (PDF) | Grantor, for reimbursement | Line-item expenditures + evidence + indirect recovery + certification |
| SF-425 | Federal agency, periodically | Authorized vs. expended vs. unobligated, cash position, indirect block |
| SEFA | Single Auditor, annually | All federal spend for the fiscal year, grouped by agency & ALN |
| Single Audit banner | You / your board | Whether the year's federal spend crossed $1,000,000 |
9. What Steightment does NOT do (by design)
It doesn't move money (bill-pay, payroll, tax filing) — those go to partners (Melio, OnPay, Avalara) so Steightment never touches KYC/AML or the IRS. It keeps the full detail; when it pushes to QuickBooks it sends summaries (the minimum an outside auditor needs). Where it doesn't yet track something (unliquidated obligations, cost-share), it shows $0 with a footnote rather than inventing a number.
10. A day-one mental model
Bookkeeping tells you if the business is healthy. Grant bookkeeping proves to the government that you spent its money correctly. Steightment does both from one ledger: tag every dollar to an award, keep allowable and unallowable apart, let the responsible person approve it, lock the month, and press a button to produce the exact federal document someone is asking for.
Ready for specifics? Browse the Glossary →