PPP stands for Paycheck Protection Program. It referred to a loan program integrated into the CARES Act to inspire businesses during the COVID-19 crisis to continue the maintenance of wages and other utilities. They can easily “apply for PPP loans in Sage 50” and spend the funds on suitable things. Let’s discuss thoroughly this program.
PPP loans are considered as a direct incentive for small organizations to keep their employees on the payroll without any interruption.
- 1 Who all are allowed to Use the PPP loan amount?
- 1.1 Requirements to apply for PPP loans in Sage 50:
- 1.2 Key steps that need to Applied for a Paycheck Protection Program (PPP) Loan in Sage 50:
- 1.3 Create a new account to monitor loan:
- 1.4 Set up a vendor account:
- 1.5 Create nominal ledger accounts:
- 1.6 Record Receipts of the loan proceeds:
- 1.7 Now you have recorded receipt of the loan
Who all are allowed to Use the PPP loan amount?
When you receive the funds you can use for the following:
- Payroll expenditures along with benefits
- Services adequacy started previously 15 February 2020
- Interest on mortgage agreements, induced before 15 February 2020
- Rent under a lease contract incurred before 15 February 2020
Requirements to apply for PPP loans in Sage 50:
To apply for the payroll protection loans you need to satisfy certain conditions that are given below:
- Payroll expenditure confirmation files
- Payroll report summary with accurate bank statements
- The organization with up to 20 % stake and its relevant documents
- Form 1099-MISC
- Residence proof certificate
- Utility & bank invoices
- IRS forms 940 & 941
Key steps that need to Applied for a Paycheck Protection Program (PPP) Loan in Sage 50:
It is suggested to create an independent cash account for the PPP loans in Sage 50 and at financial institutions like a bank. This helps to deposit the loan funds, track the complete COVID 19 expenditures, and maximize loan forgiveness.
Create a new account to monitor loan:
Below are the steps:
- Navigate Maintain and then choose Charts of Accounts
- Fill an updated new number in the field named Account ID
- The account should be liable
- Follow existing liability accounts to select a new number matching the type
- If the loan is for more than 12 months it is termed long term liability else it is a current liability.
- Fill the details including the account ID, description and select the account type
- When the account is established, you require to set-up the balance of the account.
- Avoid using the account beginning balances option
- After this, you require to post a transaction to track the loan
After following the above-written procedure deposit the loan amount and create the cash account in sage 50. The liability account is used to track the status of the funds that need to be forgiven.
Set up a vendor account:
This includes creating a PPP lending account and the account set up as a default expense account
Below-mentioned is the list of steps:
- Create a vendor account to record the transaction
- Enter payment and embed the entire amount to interest Expense
- Fill a reference number to create the electronic payment
- You are required to integrate some portion of the payment for an interest expense and liability account
- The bank permits the amortization table to display the breakdown of each transaction
- The amortized table make a transaction more simple
- You need to memorize GL accounts that filled in the amounts.
Create nominal ledger accounts:
Follow the steps:
- Go to Settings and then click on Financial Settings option hit on Chart of Accounts
- Select New Ledger Account and fill the following fields:
- Lender name
- Display name
- Nominal code
- Category and Category Group
- VAT Rate
- Select Save and then choose New Ledger Account and fill the information like Category, overheads range, and code, display name, account, etc.
Record Receipts of the loan proceeds:
Whenever you received the loan funds, the next step is to submit it into a bank account and then record the transaction in Sage 50 through receiving a money dialog window.
Follow the below-points:
- Discover banking then hit the preferred bank account and then select New Entry
- Locate the Sale/receipt listed in a drop-down button
- Choose other receipts option and fill the information including date received, details, amount received and reference
- Write the loan information which includes loans etc.
- Hit on Save.
Now you have recorded receipt of the loan
Make sure you collect accurate information, created an individual account, and liability account. Embed this detail in Sage 50 through journal window
Input a loan in Sage 50:
- Discover the General Journal window
- Click on the liability account
- Hit on post
- Locate the payment journal and hit Make other payment
- Choose Vendor
- Pick the bank loan liability located below Account column
- Click on an interest expense account
- Fill the interest amount and click ok
For further information, don’t hesitate to call Sage 50 support professionals. The team is available 24*7 to provide the updated guidance and assist you to resolve your entire sage-based issues. Experts are very police and carrying years of experience in handling Sales 50. Moreover, you can email them you will get an instant response to address all your Sage issues.