SBA paycheck protection program permits forgivable loans (up to $349 billion) for small businesses. This forgiven loan is promoted during the COVID-19 crisis to let small business easily pay their employees. They can use the loan amounts to cover the significant mortgage interest, utility costs, and payroll costs after the loan has been created. The PPP loan application needs particular reports. Once received the loan using PPP you have to set up the Paycheck protection program loan in the Sage 50. The below article is rounded up the Sage 50 SBA PPP loan setup procedure.
How to Set Up the PPP loan Account in Sage 50?
Set up the loan Account:
- It is recommended to generate a particular cash account in both bank and Sage 50. It helps to deposit the loan proceeds and monitoring the COVID-19 expenditures. The separate account is audit-friendly which prevents funds from comingling and generates a clear audit trail. This results in maximizing the loan forgiveness.
- Firstly create a new account for tracking loan
- Open the new bank account and then start loan funds depositing
- Next, set up Sage 50 new cash account
- After this make a loan liability account to track liability
- Setup the loan vendor for PPP lending institutions
- Fill the loan liability account set as a default expense account
- Now start recording the loan proceeds receipt
- Once you get the money then start depositing it into the bank account
- Use the Receive Money window to record the transactions
- Records the expenses of the PPP loan
- Now start using the regular Business checking accounts for expense payments
- For payroll direct deposits it is not mandatory to modify the cash account. However, after expense payments, create a PPP cash account transfer to the required business checking account
- After this, move the reimbursement expenses in real life
- Open the Sage 50, use the transaction named Write checks for transfer recording
- Now add a description on the field named expense
- Note the PPP loan expenditures activity in the PPP cash account
Also Read: Integrate Payroll with Sage 50
Hopefully, the above article helped you to set up the SBA PPP loan in Sage 50. In case you feel any doubt or need to explore further assistance then contact the Sage 50 consultant team.
What Documents do I need for Applying SBA PPP Forgiveness Application?
- Documents providing the verification of full-time employees on the payroll with pay rates.
- Payroll provider’s payroll reports
- Tax filings Payroll
- Payroll, unemployment’s insurance filings, income from your state
- Document verifying health insurance and retirement contributions
- Documents confirming the rent, eligible interest, and utility payments
What do I Track the Pertinent Account’s Spending?
Use the General Ledger Report
How do I see the cash activities in Sage 50?
The Account Reconciliation report
When my loan is not forgiven?
- Your lender may permit you to provide extra documentation so re-check the request
- The outstanding balance will proceed to accrue interest at 1 %