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.
Michael Liersch is head of Advice and Planning for Wealth and Investment Management, which is responsible for developing and propagating research-based methods to help advisors and clients most productively collaborate around their money decisions. Prior to joining Wells Fargo, Michael worked at JPMorgan Chase where he served as managing director and global head of Wealth Planning and Advice. Prior to his role at JPMorgan Chase, he served as head of Behavioral Finance and Goals-based Consulting at Bank of America-Merrill Lynch, and as head of Behavioral Finance at Barclays Wealth, Americas. He was also a faculty member at New York University, where he taught management and organizational analysis.
Indy Guha is chief marketing officer at Signifyd.
Jeffery is a senior analyst serving financial services digital strategy professionals, helping them evaluate the implications of digital innovation on their businesses. His research focuses on the intersection of secular trends and technological advancements, such as the internet of things (IoT) and sensors, artificial intelligence and machine learning, and natural language processing, as these advancements are changing the way financial services firms do business and interact with their customers.
Jeffery has more than 10 years of experience working with C-suite executives and senior business leaders to shape business strategy at insurance clients. Prior to joining Forrester, he was an associate director at Ernst & Young (EY), where he led EY’s Americas’ insurance sector market research and insights program, working closely with senior engagement partners to drive growth at key global and US accounts. Before EY, Jeffery was a senior manager at PriceWaterhouseCoopers (PwC), where he delivered insurance industry and company research, analysis, and thought leadership support to client service partners and their engagement teams during consulting pursuits and engagements. Prior to PwC, Jeffery was employed for five years as an equity analyst at global and regional investment banks, covering the retail and consumer and automotive aftermarket industries.
Jeffery holds an MBA from the Darden School at the University of Virginia in Charlottesville, Virginia. He received his bachelor’s degree in agribusiness from Florida A&M University in Tallahassee, Florida.
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.
