If you have received moneys associated with the Paycheck Protection Program, it is probably a wise thing to invent a temporary bookkeeping system and process to distinguish all financial activities associated with/utilizing these funds from the rest of your bookkeeping system. That way there can be no doubt that you can prove your PPP expenses/activities in order to enhance your eligibility to qualify for not having to pay back this loan (or much of it).

There are certainly different ways you can go about distinguishing your PPP financial activities in your current bookkeeping system (no matter what platform you utilize). It really just takes outside-the-box thinking and perhaps getting ideas from others on the internet.

So let’s briefly outline a few ways here:

 

  1. Create service items (not accounts) like you would for inventory or services when you create invoices to your clients. These service items could be activated and utilized when you process payroll (not the same as payroll or tax items, but time-tracking type of items). These service items of course could also be used for vendor bills, etc, etc. Just use your imagination here.
  2. Activate your class and/or location tracking functions in QuickBooks and create new ones for Paycheck Protection Program activities.
  3. Create a new fictitious temporary holding bank-type account in your bookkeeping system and be sure PPP activities have to travel in and out of this account, thus this temporary holding account should always have a net zero balance when the bookkeeping entries are completed.
  4. At the very least, deposit your newly received PPP moneys into a savings account where there is typically very little activity going on. Then just transfer funds over to your main operations (checking) account to replenish funds for PPP related expenditures (typically just a few times a month would probably do here to captures activities in summary fashion).

 

Note: AccuraBooks is a bookkeeping firm only, so please consult with your Certified Public Accountant or with a Certified Auditor for verification and clarification about the contents of this article.

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