The COVID-19 pandemic has upended lives across the country as officials struggle to curb its spread. As cities and states have put restrictions in place to slow infections, businesses of all kinds have felt the financial squeeze.
Certified public accountants have helped guide their clients through this troubling time as they try to navigate the sudden financial strain the pandemic has brought. The CARES Act provided some relief for businesses, dispersing more than $525 billion through the Paycheck Protection Program. As the time comes for businesses to apply for PPP loan forgiveness, CPAs can provide vital assistance to ensure success for their clients. Here are some things to keep in mind while helping clients with PPP loan forgiveness.
Do your clients qualify?
Your client was able to secure a PPP loan early on in the pandemic that helped them stay afloat. But, are they eligible for loan forgiveness now? This is an important question that business owners are counting on their accountant to make clear for them. CPAs need to keep their clients informed of the requirements throughout the loan process to ensure they qualify for full forgiveness. Keeping the right number of employees on the payroll and avoiding big payouts are important factors that will affect a business’s qualification for forgiveness. A CPA can help clients meet this and other requirements before submitting their application.
Completing forgiveness applications
It’s no surprise that PPP loans can be confusing, especially for business owners dealing with a mountain of stress just trying to keep food on the table for themselves and their employees. Having a good CPA on their side is an invaluable aid for business owners during these difficult times.
Tobias Salinger is Financial Planning's chief correspondent, with nearly a decade of experience covering wealth management, regulation and the business of financial advice. He specializes in investigations and enterprise reporting on advisory firm strategy, regulation, conflicts of interest, and diversity and equality across the industry.
Tobias has been recognized for his investigations and original reporting on the conflicts of interest that affect wealth management firms, as well as systemic racism in finance, winning more than a dozen honors, including the Jesse H. Neal, Azbees, SABEW Best in Business and Folio Eddie awards.
His award-winning coverage includes:
- Building Black Wealth in St. Louis
- The wealth management industry's $1T conflict of interest
- A black eye for FINRA? Brokers with checkered histories cast doubt on enforcement efforts
- Access denied: Systemic racism in financial services
- From sealed transcripts, the inside saga of LPL Financial's largest termination ever
Before Financial Planning, Tobias reported for the New York Daily News, Commercial Observer and City Limits. He holds a master's degree from the Craig Newmark Graduate School of Journalism at the City University of New York (2013) and is an alumnus of the Fellowship at Auschwitz for the Study of Professional Ethics, an international program focused on how the lessons of history inform professional ethics today in journalism and many other fields.
Born and raised in Kansas City, Missouri, now based in Chicago, Tobias is an avid softball player, a novice bird watcher and reader of contemporary fiction.
Connect with Tobias on LinkedIn or reach him at: tobias.salinger@arizent.com.
Teresa Carroll is the vice president of PEO (Professional Employer Organization) at Paychex and the president of Oasis, by Paychex HR.
Matt Harmon has served as the senior vice president of claims for The MEMIC Group since 2015. In this role, he is responsible for all claim-related activities for MEMIC across 40+ jurisdictions. Matt brings more than 25 years of workers’ compensation claims experience to his position. Matt began his insurance career in 1994 after graduating from the University of Maine with a degree in Business Administration. Active in his community, Matt currently serves on the board of directors for the American Red Cross of Southern Maine and Boots2Roots. He is a 2019 graduate of Maine Development Foundation’s Leadership Maine program, and is a current MBA candidate at the University of Maine.
Keeping track of expenses and documentation after the loan is received and getting the correct paperwork put together for the forgiveness application is essential. Make sure clients meet deadlines, turn in the correct forms, and stay in touch with their lender throughout the application process. Give clients the confidence that their application is thorough and accurate to give them the best chance of their loan being fully forgiven.
Staying on top of changes
Of course, the confusion that has occurred with the Paycheck Protection Program doesn’t belong just to borrowers. Some CPAs may find they have a few questions along the way as well. Lawmakers hurried to get financial assistance to cash-strapped businesses when COVID-19 shut down the country; there were bound to be a few snags and revisions to the program. The federal government has put out notices and questions and answers to clear up issues along the way, and changes have been made to the program as the pandemic raged on through the year. It’s up to CPAs to stay apprised of these changes and updates to FAQs so they can properly assist clients. There are still more questions to be answered, including tax issues, so this is a continual process.
CPAs can provide valuable assistance to their clients who are doing their best to stay in business in the midst of a pandemic. Stay informed about the PPP loan forgiveness process and give clients a reliable adviser in their corner to guide them through the process.
