Set up the Loan Payment into Sage 50

The loan provided by PPP can be forgivable; if you justify that you spend all money on needed and right things.

Where You Spend the Loan Payments

To maintain the business financial management, you are applicable to use this loan for specific things

• Payroll prices including all benefits
• Spend on all utilities and services that began before February 15, 2020
• Rent costs, make sure under the lease agreements before February 15, 2020
• All interest is based on the mortgage obligations but before February 15, 2020

What is included in Payroll Costs?

• It mainly includes wages, salary, commissions, or tips but specifically for each employee who is capped at $100,000 annually
• All employee advantages throughout the year such as cost for family, and parents. Holiday trips or taken sick It also includes all health care payments with insurance Premiums and includes retirement beneficial payment
• It also handles all state and local tax payment issues with more accuracy
• An independent contractor or a sole proprietor also gets access including commission, wages, income, or annual earnings for each employee.

How to Set up the Loan Payment?

As per record-keeping instructions, make sure first you create a separate cash account in the bank as well as in Sage 50 for loan deposits and to track all expenditures that are related to Covid-19. A new separate account is considered to be audit friendly which avoids all complex issues, and commingling of funds, and makes an audit trail very clear vision. This will lead to your loan forgiveness approach. To create a new account, follow the below steps

• To track the record of the loan, create a new account and enter all mandatory information
• After that, open your new bank account and then deposit the total loan funds
• Then go to Sage 50 and set up a new cash account
• For this loan, the user has to make a new liability account. Until you get the complete details of how much the loan is forgivable.
• Then set up a new account for the loan vendor
  • In the PPP lending section as a new setup with all necessary information enter all required details about the liability account as per according to the default expenses account.
• Track record the receipt of all proceeding loans
  • After receiving the money, firstly deposit it into the new bank account and save the record of all transactions in Sage 50 with the “Receive Money Window” approach.

How to Record all Loan Expenses

• Make sure you continually check and use your business accounts to manage all pay expenses.
• If you are using payroll direct deposit, then there is no compulsion to change the established cash account
• But must save the record of each expense after the completion of payment processing and transfer it from your PPP cash account to your regular business accounting.
• In Sage 50, you can prefer the “Write checks transactions” to track the record of all transfer money.
• In addition, you can add all label expenses such as “PPP transfer for an electric bill”.

The Payroll Protection Program from the CARERS Act authorities up to $349 billion in forgivable loans to small businesses to pay their employees during the COVID-19 crisis. The terms of the loan are the same for everyone.

Setup the Loan Account in Sage 50 Accounting

Let’s get started with a loan account setup. 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 of 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 a 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.

Experts Suggestion

• Do not combine a transfer with one transfer for services and payroll.
• Make a separate transfer per cost for through one transfer.
• Decide 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 the Payroll Protection Program toll-free helpdesk number. 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 a live chat with Sage 50 professionals.