Paycheck Protection Program Loan into Sage 50

In today’s article, we are going to talk about the Setting up of the paycheck protection program loan account, prepare for paycheck protection program and applied for a paycheck protection loan in Sage 50.

Sage can give you the most advanced and latest tool. It can Consultant you with the latest information and security for your business. PPP loans are a much-needed lifeline for small businesses. The loans can be for 2.5-time payroll costs. , up to $10 million and features with the enriched and streamlined application process and fewer requirements.

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Where you can use PPP Loans

Once the PPP Loan is with you, it can be used for below :

  • Payroll costs, including benefits
  • Interest on mortgage obligations, incurred before 15 February 2020
  • Rent under a lease agreement in force before 15 February 2020
  • Utilities for which services start before 15 February 2020

How to Set up the Paycheck Protection Program Loan Account in Sage 50

It is always recommendable to create a separate cash account, both in Sage 50 and at the bank, to deposit the loan proceeds and track the related COVID 19 expenditures. A separate account is more audit-friendly and creates a clear audit trail. This will help in maximum loan forgiveness.

Step 1: Create a New Account for Tracking the Loan

  • Open a bank account and deposit the loan amount.
  • After that set up the cash account in sage 50.
  • Create a new liability account, it should be tracked as a liability until you know how much the loan will be forgiven.

Step 2: Set up the Loan Vendor

  • Set up the PPP lending institution as a new vendor and enter the loan liability account as the default expense account.

Step 3: Record Receipts of the Loan Proceeds

  • After receiving the money, submit it to your new bank account and record the transaction in Sage 50 using the receive money window.

Applied for a Paycheck Protection Program Loan in Sage 50

PPP loans are considered a direct incentive for small organizations to keep their employees on the payroll without any interruption.

Who all are allowed to Use the PPP loan amount?

When you receive the funds you can use them for the following:

  • Payroll expenditures along with benefits
  • Services adequacy started previously on 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:

Small organization:

  • 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 apply 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 loans:

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 in 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 in 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 makes 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 the 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
  • Visibility
  • VAT Rate
  • Select Save and then choose New Ledger Account and fill in the information like Category, overheads range, 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 in the information including the date received, details, the 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 and create an individual account, and liability account. Embed this detail in Sage 50 through the 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 the Account column
  • Click on an interest expense account
  • Fill in the interest amount and click ok.

Set up the Loan Payment in to Sage 50

The loan provided by PPP can be totally 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 includes 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, parental. holiday trips or taken sick It also includes all health care payments with insurance premium  and also includes retirement beneficial payment
  • It also handles all state and local taxes payments 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 which 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 deposits the total loan funds
  • And 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 set up with all necessary information and 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 it 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”.

For more information, Sage 50 experts are available 24*7 to consultant you with the latest information and help you to solve all Sage-related problems. Sage experts are professional, polite, and have many years of experience in the same domain.

Speak to a Specialist about Your Sage Software

Get instant assistance with Sage accounting software. Our Sage experts are available 24x7 and resolve issues within minimum turnaround time. We support both US & Canada Editions of Sage 50 Software.

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