The Payroll Protection Program from the CARERS Act authorities up to $349 billion in forgivable loans to small businesses to pay their employees during COVID-19 crisis. The terms of loan are the same for everyone.
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Information about Paycheck Protection Program Loan
The Paycheck Protection Program (PPP) is a loan intended to provide the small businesses with a direct incentive to keep their employees on payroll. SBA can repay loans if all workers are placed on the payroll for eight weeks and the money is used for salaries, rent, mortgage interest, or utilities.
You can apply through any current SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating. Once accepted and enrolled in the system, other limited lenders would be eligible to make such loans. You can contact your nearest lender to see if they are involved in the program.
In order to record and track from care acts H.R. 748 Payroll Protection Program in Sage 50, you need to first set up your loan account, loan vendor, record receipt of the loan, and record loan expenses. After this, you can easily track and manage this act from your Sage account.
Let’s get started with a loan account set up. Just follow the mentioned processes that help you to easily set up your loan account.
Set up the loan account
It is suggested to establish a separate cash account, both in Sage 50 and at the bank, to deposit the loan proceeds and track the corresponding Covid-19 expenses for optimum record keeping. A separate account is more audit-friendly, stops funds flowing in and provides a simple audit trail. This can assist with the full repayment for loans.
Create new accounts for tracking the loan
- Open a new bank account and deposit the loan funds
- Then, set up your new cash account in Sage 50
- After that, create a new liability account for the loan
- Until you know how much of the loan will be forgiven, it must be tracked as a liability
Set up the loan vendor
Set up the Payroll Protection Program lending institution as a new vendor and enter the loan liability account as the default expense account.
Record Receipt of the Loan Proceeds
When you receive the money, deposit it into your new account and record the transaction in Sage 50 using the Receive Money window.
Record Loan Expenses
Keep using your daily Business Checking accounts to pay the costs as you would normally. If you have direct payroll deposit, you don’t need to adjust the cash account you have created. But make a transfer from your PPP cash account to your daily business checking account as a refund for the permissible cost after payment of each cost.
- Do not combine a transfer with one transfer for services and for payroll.
- Make a separate transfer per cost for through- one transfer.
- Take a decision on what does make sense to put into a single combined transfer.
- This combination makes sense that is payroll wages + payroll taxes.
- This combination does not make sense that is Payroll + Utilities + Rent in a single transfer instead of making three separate transfers.
So, to record and track from care acts H.R. 748 Payroll Protection Program in Sage 50, you may need to perform the above-mentioned procedure. For further information, you can connect with Payroll Protection Program toll-free helpdesk number. As they are available 24*7 to assist and provide all the beneficial information related to PPP loans so that you can avail the benefits of the loan with ease. You can also drop an email at this email address or do live chat with professionals.