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What can I do to track the Paycheck Protection Program (PPP) loan we received?

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Summary

Is there a way to track the Paycheck Protection Program (PPP) loan and payments made from that loan amount?

Description

TIP: You can utilize MyAssistant to send you a notification when the balance on the PPP bank account in CM reaches a certain amount. This is helpful if you want to be notified when the funds are getting low.

Note: MyAssistant is an add-on application that includes functionality to email information to a designated group of recipients in a scheduled task. To see a demo of MyAssistant and get pricing information, contact Sage 300 CRE Support to arrange to have an associate contact you.

Cause

The CARES Act and/or Paycheck Protection Program (PPP) is a loan program designed to provide small businesses with access to cash so businesses can keep paying their employees and other expenses such as health insurance premiums, rent or mortgage payments and utilities during this time of COVID-19 crisis.

Resolution

CAUTION: Sage Customer Support does not assist with issues related to third-party products or enhancements, hardware, report customizations, state or federal tax-related questions, or specific accounting questions. Please get in touch with your Sage business partner, network administrator, or accountant for assistance. Please refer to our Scope of Support document for details.

IMPORTANT CONSIDERATIONS:

  • It has not yet been determined what portion of funds may or may not be excused. Contact your Accounting firm for advice on what payments can be made using these funds.
  • It is recommended to have a separate bank account at your financial institution specifically for the PPP funds. You may need to order check stock for the new account if you are going to print checks using the PPP bank account. (Can I order checks through Sage or sageforms?)
  • With all the many custom setup and workflow scenarios that may exist, there may be additional considerations that are not accounted for in this article. Work with your Sage 300 CRE Consultant to determine if there are any considerations in regards to your own setup, workflow, and business practices.
  • You may need some custom reports created for the specific reporting that you may need. Refer to Who do I contact about creating or changing custom reports, inquiries and invoice forms?

SET UP THE ACCOUNTS AND ENTER THE LOAN FUNDS:

In General Ledger, create two (2) accounts:

Create a new cash account and loan account. See How do I set up an account in General Ledger?

  • Create an Asset account type for the cash received from the loan. This account will be used for the Bank account setup below.
  • Create a Liability account type for the loan that you may need to pay back later.
  • Note: Consult with your accountant or controller if these account types should be the "current" or "noncurrent" (long-term) type.

In Financial Statement Designer, add the new accounts to your designs:

Add the new accounts to your financial statement designs. See How do I add new accounts to a financial statement design?

In Cash Management, setup a PPP bank account:

  1. In Cash Management, Setup, Setup Assistant, create a new bank account for the PPP funds. See How do I set up a new bank account in Cash Management?
  2. Use the General Ledger Asset account created above as the General cash account on the GL Cash Accounts tab.
    • Note: If you use GL prefixes in your account format, you will need to determine if intercompany accounting should occur or not and if you should select Use separate cash accounts per application with the Base or Full account.
      • TIP: You may want to follow the settings used on the operating bank account normally used for paying Accounts Payable.
  3. Determine if the new PPP bank account will be used for Accounts Payable and select the appropriate application box on the GL Cash Accounts tab.
  4. Select the appropriate AP check format to use. You may want to use the same check format that you use on your regular bank account.

Enter the loan on the PPP bank:

  1. In Cash Management, Tasks, Edit Register, select the new PPP bank account.
  2. Enter a deposit transaction for the amount of the loan.
  3. In the Deposit entry window, verify the Debit account is the correct GL asset account.
  4. For the Credit account, enter the loan liability account.
  5. Click OK and Finish from the Edit Register entry.

Note: This will create entries to the General Ledger for the cash received and the loan.

USING THE PPP FUNDS FOR AP:

Option 1: Pay invoices using the new PPP bank account

This will allow you to track and report the specific invoices that were paid using the PPP bank account.

Option 2: Use a Distribution Code or Job Cost code to track costs on the invoices, pay the invoices from your regular operating bank account, then transfer funds from the PPP bank to the operating bank account

This will allow you to track and report the specific invoice distributions that are coded as eligible costs by either Job or Dist Code.

  1. Create a Job in Job Cost to code eligible costs on distributions in order to track and report these costs separately from non-eligible costs. If you do not own Job Cost, or do not want to create a job for tracking, you can use a specific distribution code (Dist Code) on the invoice distributions.
    • For information about using the Distribution Code, see What is the distribution code (Dist Code) field for in Accounts Payable?
  2. When you enter invoices with eligible costs, on the distributions you will code them to the job or dist code appropriately.
  3. Pay the invoices from your regular operating bank account as you normally do.
  4. In Cash Management, enter a Bank Transfer from the PPP bank account to the operating bank account for the amount needed to cover the PPP eligible costs that were paid. Refer to How do I enter a bank transfer in Cash Management?

USING THE PPP FUNDS FOR PR:

Information regarding how to track eligible Payroll (PR) expenses is outlined in How do I setup pays to continue paying employees using the Paycheck Protection Program (PPP) loan we received?



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´╗┐Coronavirus Aid, Relief, and Economic Security (CARES) Act FAQ