Tracking the PPP Loan Proceeds

Unfortunately at this time much of the guidance on the forgiveness is unclear at this time. Technical guidance is expected to be forthcoming in the next few weeks.   While we await further direction here are some tips.

Where to Start?

  • Set up an efficient tracking system for tracking documentation
  • Keep detailed records
    • Use an excel sheet or your accounting software package
      • If you use QuickBooks this can be done by setting up class tracking and creating a class “COVID-19” and tagging all related expenses.
    • Keep 3rd party payroll records
    • If you do not use a 3rd party, keep your internal payroll reports that reflect gross wages
    • Keep copies of receipts, invoices, and bills for paper support

What is eligible?

Payroll – this will likely be utilized 75% or more as part of your loan amount:

  • Payroll
  • Health Insurance
  • Dental Insurance
  • Vision Insurance
  • FSA
  • HRA
  • Retirement plans
  • State and local taxes
  • Keep copies of your bank statement(s) and tie out the listed expenses claimed.
  • You may also wish to use and keep as part of your documentation your Form 941 or 940 and summarize the portion on the form that was used during the 8-week period.

Other qualifying expenses – These expenses will likely be limited to 25% of the PPP loan amount.

  • Keep invoices, statements, payment advices, etc. to validate the expenditures for rent, mortgage, utilities, etc.
  • You may be asked to provide a copy of your rent, lease, or mortgage loan to validate these obligations were in place before 02/15/20.
  • Keep copies of your bank statement(s) and tie out the listed expenses claimed.
  • Keep copies of the canceled checks for the invoices or bills paid with program proceeds.

Employee headcount:

  • Keep track of hours worked for hourly employees. Maintain timecards and/or pull reports from electronic timecard systems. These should be tracked the entire 8-week period.
  • Capture any new employees hires, regardless of status. Keep the Form W-4, as they may be required as support documentation.