With many businesses still under lockdown, revenues are slow to recover. Therefore, in order to help small businesses stay afloat in the wake of mandates, Congress was able to push past gridlock to pass a new stimulus last month, including a new round of PPP funding.
Luckily a recent article from the AICPA Journal of Accountancy looked to offer tips and strategies to make the most out of the latest round of PPP funding. From taking on an aggressive approach to leveraging data, the article discusses important topics and approaches. Here are just some of the things you should know.
Take an Aggressive Stance
One of the first things mentioned in the article is the importance of being aggressive—and patient. Getting applications filled out in a timely fashion can help you to reduce hassles, because many expect the U.S. Small Business Administration (SBA) and Treasury to take more time processing these applications.
“Overall, the process isn’t new,” said Kari Hipsak, CPA, CGMA, a senior manager with the Association of International Certified Professional Accountants. “So at least there’s familiarity with the program and how to go through the program. There are changes, though, in the new round of PPP funding, so as before, everyone will have to stay cognizant of any new rules and regulations, but the familiarity of the program should help.”
Screening of applications to reduce the risk of fraud and eliminate unqualified claims has been an important sticking point for legislators and the public, so you’re going to want to take a clear approach to applying for funding.
It may take a bit more time for the SBA to approve PPP funding than it did the last time because reviews are being done more carefully in this round.
“Let’s keep in mind that everyone is trying to ensure that the funds are used appropriately,” Hipsak said. “That means that when you go into the PPP application, make sure the correct data is submitted to avoid drawing out the review process.”
Clean Data is Critical
In order to make the most out of an application, you’re going to want to make sure your application is bulletproof. The first step in applying for a PPP loan is gathering all the relevant data borrowers will need. Information such as average monthly payroll amounts and (for second-draw PPP borrowers) quarterly revenue comparisons is necessary.
“Take the time to make sure the correct data is submitted,” Hipsak said. “This program isn’t new anymore, but there are changes [in the second-round rules]. Make sure you’re aware of the changes. Make sure your clients are aware of the changes, and make sure that they’re integrated into any application you submit.”
Understand Forgiveness Changes and Challenges
Following the initial PPP rollout, both the business and regulatory community were left asking for clarity, and over the past few months, changes have been made to the old program. But the new program will feature even more change.
CPAs need to be aware of the differences between first-draw and second-draw loans and understand that second-draw applications require borrowers to prove they have experienced at least a 25% reduction in gross receipts as a result of the pandemic.
Changes Are Inevitable—Stay Up to Date with the Controllers Council
Changes over the course of the year will present even more questions. Whether it’s the forgiveness issues or the taxation fallout, it’s vital to have a place where you can keep up with all the latest guidance and discuss new approaches.
The Controllers Council was created for this exact reason. We launched as a place to share all the latest news and provide a place where you can discuss your approach with others in the community. Get to know more about our community here and learn about all the other benefits of joining today!