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Level 2

Recording Payroll Protection funding

I received my funding thru the PPP but not sure how record the funds in QB.

Solved
Best answer May 01, 2020

Best Answers
QuickBooks Team

Recording Payroll Protection funding

Hi shalo. 


I thank you for coming to the QuickBooks Community with your questions about the Paycheck Protection Program, I'm happy to show you how to record it now that you've received the funds. 


What you'll want to do is credit the PPP as a liability. Name it something easily recognizable such as "PPP loan" and set it up as either a short-term liability or a long term liability. The short term liability will work as long as you know it'll be forgiven. If you think any of it may not be forgiven, for any reason, such as you didn't rehire enough full-time employees by the June 30th deadline then you can set it up as long term liability.


Also, don't forget to record it in the name of the bank you received it from, as you're paying back or being forgiven by that bank, not the SBA. 

 

Keep an eye on this post directly from Intuit, it highlights the Paycheck Protection Program and is updated regularly. 

 
- Get a quick start on your Paycheck Protection Program loan. 


If there's anything else you need, let me know below. 


Thank you for your time and patience, and have a nice Monday.

View solution in original post

Level 2

Recording Payroll Protection funding

Thank you for your response. Do I record the funds that were deposited into our bank account before I set up the liability accounts to track it?

View solution in original post

Community Champion

Recording Payroll Protection funding

You can do so at the same time since you must record a source for the funds.

View solution in original post

Level 2

Recording Payroll Protection funding

I set up the loan but what do I put for date of payment and payment amount?

View solution in original post

QuickBooks Team

Recording Payroll Protection funding

Hey, Shalo. 

 

For the date of payment and amount, you'll want to make sure your record the receipt of your loan when it's been funded. You'll add it to your Check Register and make the date the day you received the loan and for the full amount. If you have any questions or concerns regarding the recording process, check out this helpful video. It talks about adding the loan date and amount around the 3 minute mark. 

 

- Tracking your PPP loan in QuickBooks Desktop

 

If you need anything else, feel free to reach out down below. 

 

Have a nice evening. 

View solution in original post

Community Champion

Recording Payroll Protection funding

Breaking it down.  It is primarily your payroll reports that prove what you spent on payroll, not the activity in the bank account. Cancelled checks or a bank statement will back it up. You can keep the funds separate, but there is no actual reason to switch bank accounts for the 8 weeks (almost impossible if you have any payroll liabilities outstanding) just as there is no reason to segregate funds used for family leave.

 

The SBA says, in print, that the banks are not to question our documentation, just as they were not supposed to question or re-calculate our numbers for the loan (but many did)

 

My plan> I moved the loan amount out of my operating account into a side account we have at the same bank. My intention will be to move an account equal to gross payroll each pay period back into operating. But this is just for my own satisfaction. I am still working with a target for each pay run, and as long as I achieve that on average the add-ins of health insurance and retirement funding are just extra.

 

Your weekly target (as well as mine) is 75% of the loan divided by 8 (if weekly payroll).If you received $100,000 then you should aim to spend $9375 gross wage each week.

 

One more take home.  You CAN pay your employees to stay home, you can hire brand new employees to fill in, you could , in theory, pay everyone on FMLA 2/3 pay for the next 6 weeks, or have no payroll, and then blow the entire loan amount in a 2 week bonus payroll period. Nothing says you have to pay same amount steadily and you have until end of June to rehire or hire enough workers to meet you head count.

View solution in original post

17 Comments
QuickBooks Team

Recording Payroll Protection funding

Hi shalo. 


I thank you for coming to the QuickBooks Community with your questions about the Paycheck Protection Program, I'm happy to show you how to record it now that you've received the funds. 


What you'll want to do is credit the PPP as a liability. Name it something easily recognizable such as "PPP loan" and set it up as either a short-term liability or a long term liability. The short term liability will work as long as you know it'll be forgiven. If you think any of it may not be forgiven, for any reason, such as you didn't rehire enough full-time employees by the June 30th deadline then you can set it up as long term liability.


Also, don't forget to record it in the name of the bank you received it from, as you're paying back or being forgiven by that bank, not the SBA. 

 

Keep an eye on this post directly from Intuit, it highlights the Paycheck Protection Program and is updated regularly. 

 
- Get a quick start on your Paycheck Protection Program loan. 


If there's anything else you need, let me know below. 


Thank you for your time and patience, and have a nice Monday.

View solution in original post

Level 2

Recording Payroll Protection funding

Thank you for your response. Do I record the funds that were deposited into our bank account before I set up the liability accounts to track it?

View solution in original post

Community Champion

Recording Payroll Protection funding

You can do so at the same time since you must record a source for the funds.

View solution in original post

Level 2

Recording Payroll Protection funding

I set up the loan but what do I put for date of payment and payment amount?

View solution in original post

QuickBooks Team

Recording Payroll Protection funding

Hey, Shalo. 

 

For the date of payment and amount, you'll want to make sure your record the receipt of your loan when it's been funded. You'll add it to your Check Register and make the date the day you received the loan and for the full amount. If you have any questions or concerns regarding the recording process, check out this helpful video. It talks about adding the loan date and amount around the 3 minute mark. 

 

- Tracking your PPP loan in QuickBooks Desktop

 

If you need anything else, feel free to reach out down below. 

 

Have a nice evening. 

View solution in original post

Level 2

Recording Payroll Protection funding

Thank you for this video, it really dumbed it down for me.

Level 1

Recording Payroll Protection funding

Found the video link you posted above. Looks like it will answer may questions. Thank you so much.

Do I have my payroll deduct from this new account? If not, how do I make certain the money is used in the time allocated? Or if necessary, prove that it was used for payroll only.

Community Champion

Recording Payroll Protection funding

Breaking it down.  It is primarily your payroll reports that prove what you spent on payroll, not the activity in the bank account. Cancelled checks or a bank statement will back it up. You can keep the funds separate, but there is no actual reason to switch bank accounts for the 8 weeks (almost impossible if you have any payroll liabilities outstanding) just as there is no reason to segregate funds used for family leave.

 

The SBA says, in print, that the banks are not to question our documentation, just as they were not supposed to question or re-calculate our numbers for the loan (but many did)

 

My plan> I moved the loan amount out of my operating account into a side account we have at the same bank. My intention will be to move an account equal to gross payroll each pay period back into operating. But this is just for my own satisfaction. I am still working with a target for each pay run, and as long as I achieve that on average the add-ins of health insurance and retirement funding are just extra.

 

Your weekly target (as well as mine) is 75% of the loan divided by 8 (if weekly payroll).If you received $100,000 then you should aim to spend $9375 gross wage each week.

 

One more take home.  You CAN pay your employees to stay home, you can hire brand new employees to fill in, you could , in theory, pay everyone on FMLA 2/3 pay for the next 6 weeks, or have no payroll, and then blow the entire loan amount in a 2 week bonus payroll period. Nothing says you have to pay same amount steadily and you have until end of June to rehire or hire enough workers to meet you head count.

View solution in original post

Level 2

Recording Payroll Protection funding

Thank you, I ran our monthly payroll yesterday and based on the help here I hope it all works out in the end.

Level 1

Recording Payroll Protection funding

I've created the PPP long term liability account.  I've moved the loan deposit into this account.  The next question is how to track payroll under this new account?

 

  I use quickbooks payroll, so payroll categories were automatically created after my first payroll event.  

 

  Is there an ability in quickbooks to track these payroll 'costs' against both accounts?  

Level 1

Recording Payroll Protection funding

Thanks for the post, I had been thinking the same thing.  My loan originator had told me it had to be evenly disbursed, but that wouldn't make sense since the calculations were based off averages anyway.

 

 

Level 2

Recording Payroll Protection funding

I am the bookkeeper for a small business.  We received a PPP loan.  I have recorded it as a short term liability and also per the recommendation of Quickbooks Help, created a customized P & L report (with the date we received the loan through 8 weeks) so that we can easily track payroll expenses during this time period.  The owner of the company was thinking since payroll was being covered by a loan that the payroll expenses would not hit the P & L?  Unless I am missing something, I believed that payroll expenses are what they are and are recorded like any prior payroll expense which affects the P & L.  It is an expense that is being paid for by a loan?  Any feedback on this subject would be appreciated.  Thank you in advance.

Level 1

Recording Payroll Protection funding

We are using QB Online for our business. When I setup a new long term liability COA for our PPP Loan I had to enter the loan amount. When I moved the money from the liability account into our checking account in QBO, the loan balance in the liability account doubled. What did I do wrong? How do I properly move the loan from the liability account to checking account register so I can track payroll expenses using the loan funds?

Level 1

Recording Payroll Protection funding

How do you plan to record the Forgiveness of the PPP Loan?

QuickBooks Team

Recording Payroll Protection funding

Good Morning, QuickBooks Community!

 

To help with inputting the PPP Loan, I found some great Intuit articles. They go in depth on the process of payroll expenses, tracking your use of the loan, and even preparing the loan for forgiveness. They're great resources to assist with this arduous task of the loan. I'm here as well to assist with any other questions at any time. Simply reply below to contact me.

Level 1

Recording Payroll Protection funding

How will you record in QB the forgiveness of the loan should the SBA do so?

QuickBooks Team

Recording Payroll Protection funding

Hey, Filmteknik.

 

Thank you for reaching out to the QuickBooks Community. I found a couple articles you can use as a reference.

Please let me know if you have any other questions. Have a great day!

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