Many of my clients are hearing regarding their PPP applications this week, especially the ones who have a business account with mid to medium size banks. So, money is starting to move in the right direction.
Now is the time to put your plan into action, some are using the funds to keep; productive, loyal individuals, others are rehiring employees they had to let go, and some are hiring and training new best of class employees. The stipulation is that you must use 75% of the funds for payroll costs, the remainder can be used for utilities, mortgage interest, and rent. If not, you must pay the money back to the bank.
So, this should be the time to get your act together. Below are some recommendations that will make the documentation you will have to share with the bank to demonstrate you used the money correctly.
Payroll Service – there are some very inexpensive payroll services out there. Many of my clients utilize Gusto to pay employees and contractors. They provide direct deposits into bank accounts, file payroll taxes, and produce state of the art reports. This will save you a lot time and aggravation! The service is offered at a flat with a minimal fee for each additional employee.
Self Employed – put yourself on a salary. If you are a S-crop, you will need to be on a salary to show that 75% of your funds went to the PPP loan.
No more “Boxes of Receipts” – there are many ways to track receipts; one very popular and easy way to track receipts is through mobile applications. For example, QuickBooks has an application that you can use on your phone, you take a photo of the receipt and upload into your QuickBooks accounting system. This allows you to track all your expenses while on the road. It is important to be organized and confident that you know where and how you are spending your money.
Get a Bookkeeper – all these recommendations plus many more are done daily by a professional bookkeeper. This adviser will help you determine how to put a process in place, make sure your accounting system matches your bank account records, and track and report on how you are using your funds as a business owner to communicate with a bank.