PERSONAL LOAN FORGIVEN JOURNALY ENTRY HOW TO
PERSONAL LOAN FORGIVEN JOURNALY ENTRY UPGRADE
PERSONAL LOAN FORGIVEN JOURNALY ENTRY FULL

I’m the author of QuickBooks for Dummies.īut seriously, I’m not trying to gin up my book royalties with this statement.

PERSONAL LOAN FORGIVEN JOURNALY ENTRY FULL

PPP Loan Accounting Tip #2: A Real Accounting SystemĪ related suggestion: Maybe you should also use the whole PPP loan thing as the prompt to step up to a real small business accounting program: Quicken, Xero accounting, QuickBooks, FreshBooks, and so on.īy the way, full disclosure: I sort of have a horse in this race. I just want you to avoid screwing up your payroll costs.

No backdoor deal, no economic incentive, nothing prompts me to push you to call one of the payroll companies. Not even if you’re trying to save a few hundred bucks.Īnd just to say this? I have no horse in this race. Mostly.īut with the PPP loan forgiveness formula, your business must accurately account for its payroll costs, including timing and amounts. In the past, the ad hoc, informal payroll approach you’ve used? Sure, that worked. Like the system offered by one of the payroll services companies.

PERSONAL LOAN FORGIVEN JOURNALY ENTRY UPGRADE

(Restated another way, to get a $100,000 of forgiveness, you need at least $75,000 of payroll costs.)Īccordingly, you really want a good payroll system at least over the eight weeks your PPP loan covers.įor this reason, I suggest you upgrade to a good payroll solution if you don’t already have one. The formula limits the forgiveness you receive for non-payroll-costs to less than 25%. Mostly, you receive forgiveness for your PPP loan based on your payroll costs over the eight weeks that follow you receiving the loan funding. So I break the discussion that follows into a list of tips… PPP Loan Accounting Tip #1: A Good Payroll System (Probably a Payroll Service) The laundry list format usually works pretty well. And then the post provides some practical ideas related to you not losing forgiveness.

PERSONAL LOAN FORGIVEN JOURNALY ENTRY HOW TO

The post also discusses how to appropriately document the loan transactions. Roughly 2 months from now, you need to explain to the bank and the Small Business Administration how you spent the money.Īnd your explanation-both your accounting records and your documentation–will determine how much of the loan the bank forgives.Įxample: You borrow $100,000 using a PPP loan and do a good job on the PPP loan accounting? You don’t need to pay the loan back.Įxample: You borrow $100,000 using a PPP loan but do a bad job on the PPP loan accounting? You do need to pay the loan back.Īccordingly, this blog post discusses how to do good PPP loan accounting.

Your Paycheck Protection Program loan-let’s start calling it a PPP loan–includes a day of reckoning. Your initiative may help you comfortably march through the next few weeks of the COVID-19 pandemic.īut a bit of sort of bad news. Hopefully, in the next few days, you receive a paycheck protection program loan, or PPP loan.

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Personal loan forgiven journaly entry