In Sage 50, the Paycheck Protection Program introduces to handle all loan programs which are embedded under the CARES ACT. It specifically set up to provide financial support to all small and medium-sized businesses to handle and maintain all wages, pay rent, salaries, and utilities during the Covid-19 crises.
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-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 capped with $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 get access including commission, wages, income or annual earning 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, commingling of funds, and make 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 loan, create a new account and enter all mandatory information
- After that, open your new bank account and then deposits 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 how much loan is forgivable
- Then set up a new account for loan vendor
- In the PPP lending section as a new set up with all necessary information and enter all required details about liability account as per according to the default expenses account.
- Track record the receipt of all proceed loans
- After receiving the money, firstly deposit it into the new bank account and save the record of all transactions in Sage 50 with “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 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”
Need any Help or Advice?
I hope the above information is enough to know about Paycheck Payment Protection but want to know more or any suggestion. To take a wise decision, clear your queries first. Without any second thought, drop your all queries at this email address or do LIVE CHATS. Sage 50 support experts always active to help you to guide and to resolve your queries.