When we received our first Phase I award, we dutifully attended the NSF Phase I conference several months into the project. At the conference, we were regaled with the joys of SBIR Phase II accounting. Accounting is only interesting to accountants. Unfortunately, it is essential to everyone else! And doing your Phase I accounting properly is foundational to getting your Phase II award. I know, you thought it was your technical work plan. And it is.
But it is also doing the accounting right to show that you can properly run a research program and deserved to be trusted with the big money!
At the time, during that Phase I conference, I wished very strongly that we’d had this boring but crucial training BEFORE we started our award.
So, to give you a leg up, I’ve gathered some very helpful resources on SBIR/STTR accounting for your viewing pleasure. I advise teams that I am coaching to watch no more than 20 minutes at a time! It helps, I promise. BUT, understanding these issues will help you during Phase I and ensure that you maximize your Phase II award. Remember, after you are recommended for Phase II funding, your proposal goes to accounting. The “name” of this review varies by agency, but it’s purpose is the same. The agency accounting team will review your books to make sure you can properly steward roughly a million dollars of taxpayer funds. And if they don’t think you can do it, you don’t get the money.
Our Program Director assured me that if we didn’t pass the accounting review, there was nothing he could do!
The NSF provides detailled written help on Phase I Accounting.
Additional help on Phase II Accounting is also available.
I’ve also collected several videos of “walk throughs” of Phase I and/or Phase II accounting that can be very helpful!
An NSF webinar on Phase II Financial Reviews
SBIR Advance Session 2 – Accounting for SBIR Companies, 4/20/21 – by the Wisconsin CTC
I’ve got some additional materials on budgeting review in our online course and here is a brief playlist with some other videos on Phase I and Phase II Accounting!
Now, what’s happening with SBIR/STTR funding?
- SBIR/STTR authorization ended on Sept 30th. See my post for my discussion earlier this year on the various bills to re-authorize SBIR/STTR
- The federal government is shut down, and this impacts most federal agencies, including those that fund under the SBIR/STTR program.
- Until both the federal government re-opens and the SBIR/STTR programs are re-authorized, I am recommending to our VentureWrench community not to try and submit a proposal. And to recognize that future solicitations may take several months to open!
Here’s what the NSF had to say via email:
Lapse in Appropriations – Information for NSF Community
Dear Managing Organization Cognizant Points of Contact and Colleagues,
This email provides notification that the appropriations under which the U.S. National Science Foundation (NSF) has been operating expired on September 30, 2025. Consequently, NSF will shut down its operations with limited exemptions for specifically excepted activities.
Please review the Assistance and Contract-Related Policy and Systems Issues During a Lapse in Appropriations page at https://www.nsf.gov/shutdown/recipients for more information.
Interested in creating an SBIR proposal?
Click to Get our free guide “40 Ways to Improve your SBIR/STTR proposal!
If you are planning to raise funding for your startup,
Click to Get our FREE VentureWrench Guide to Investor Capital
50 pages of insider insights to help you succeed!
