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Track how you use your Paycheck Protection Program loan

by Intuit• Updated 3 weeks ago

Learn how you can keep track of how you’re spending the funds from your Paycheck Protection Program (PPP) loan.

Note:  The SBA provided new guidance on PPP loan forgiveness on January 19, 2021. The SBA may issue additional guidance and we will update our resources accordingly. Please refer to the SBA and Treasury to confirm current program rules and how they apply to your particular situation.

With QuickBooks, you can keep track of how you use the funds you get from your PPP loan. As you use these funds, you may consider tracking them by creating expenses and running your payroll like you normally would. Then, when you want to see what you’ve spent, you can run a report to see all your spending from the time you received PPP funds.

Note
  • If you have any questions on PPP loan forgiveness, be sure to contact your accountant or legal professional.
  • Regulations and guidance from the SBA and the U.S. Department of the Treasury on the PPP are evolving rapidly. Please refer to the latest guidance from SBA and Treasury to confirm current program rules.

You should use your funds as mandated by the SBA and Treasury. This includes using the PPP loan funds for permissible uses and understanding when PPP loan funds may be forgiven.

Step 1: Continue to pay your employees

One of the main components of the Paycheck Protection Program is to help employers continue to pay or re-hire their employees. As you use your PPP funds, continue to run payroll and pay your employees.

Paying independent contractors is not an eligible forgivable use of PPP funds.

Note: If you want to include your contributions to your employee's health care, you need to make sure to set this up in your payroll.

QuickBooks Online Payroll

QuickBooks Desktop Payroll

Step 2: Track what you spend on other eligible operating expenses

You can track what you spend on other eligible operating expenses by recording expenses, checks, or bills as you normally would. Just make sure you're properly categorizing them.

Learn more about using PPP funds on eligible operating expenses.

Non-payroll expenses eligible for forgiveness include:

  • Interest payments on business mortgage obligations for real or personal property incurred before February 15, 2020
  • Business rent or lease payments on leases pursuant to agreements for real or personal property in force before February 15, 2020
  • Business utility payments for electricity, gas, water, transportation, telephone, or internet access pursuant to service agreements dated before February 15, 2020
  • Covered operations expenditures
  • Covered property damage
  • Covered vendor costs
  • Covered worker protection expenditures

For more detailed information about PPP Loan Forgiveness, including information about the documents you need to submit with your PPP Loan Forgiveness Application please view our Paycheck Protection Program loan forgiveness article.

Note:
  • Your lender may require additional information about these expenses. Be sure to collect and save your hard copies of bills, receipts, or invoices.
  • These in-product reports may not identify all expenses which are eligible for PPP loan forgiveness. These reports are intended to provide general insight into how you are using your PPP loan funds, and should not be relied upon for PPP loan forgiveness tracking purposes.
  1. Go to the + New icon and select Expense, Check, or Bill.
  2. In the Payee field, enter the business or person you bought the expense from.
  3. Fill out the Payment account fields.
  4. Fill out the Payment date and Payment method fields.
  5. (Optional) You can use the Ref no. field to enter an identifying number from the purchase receipt.
  6. Give the item a name, and from the Category ▼ dropdown, select the right expense category.
  7. Enter the full amount of the item in the Amount field.
  8. Select Save and close.
  1. On the Home page, select Enter Bills.
  2. Select the vendor, then choose the date.
  3. Select the Expense tab.
  4. Choose the right expense account.
  5. Enter the amount for the expense.
  6. Select Save & Close.
Note: Bill Due date is automatically populated based on your Bill preference (Select Edit then Preferences then Bills and then Company Preferences).

You can use tags to track the transactions you want to pay using the PPP loan funds.

Note: If you have the receipt for your expense, make sure to add it to the transaction.

  1. Go to Transactions, then select the transaction you want to track.
  2. On the transaction type, select if it’s Business or Personal.
  3. Select a category, then choose a similar category.
  4. From the Tags field, select the tag you want to use to track PPP loan transactions.
    Note: If you don’t see the Tags field, go to Settings ⚙ and select Set up tags.
  5. Select Save.

Step 3: Run a report to see how much you’ve spent

Once you’ve started to use your funds, you can create and save a report to check how much you're spending.

  1. Go to Reports and select Profit & Loss.
  2. On the Reports period ▼ dropdown, select Custom. Enter your covered period:
    • First date: the day your lender sent you the funds.
    • 8-weeks (56-days) or 24-weeks (168-days) after the date you received your PPP funds.
  3. Select the Customize button.
  4. Select the Change columns link found under the Column dropdown.
  5. After the Change column expando opens, select % of Column checkbox.
  6. Make sure the Accrual radio button is selected. Note, the default is for the report to identify expenses on an “Accrual” basis, but you may change this default, so the report identifies expenses on a “Cash” basis.
  7. Select the Filter dropdown, select the Distribution Account checkbox.
  8. Select all the categories that you’ve spent money on ( it’s okay if you select all the categories), and select Run report.
  9. Select the Vendor checkbox and select all the vendors that you’ve spent money on.
  10. Select the Save customization button, give your report a name, and select Save.
Notes:
  • Once you save your report, you can return to the same report by selecting Reports then Customized reports.
  • Don’t forget to confirm that you have tagged each expense in accordance with the guidance above about eligible expenses.  The categories you use may not be the same as the categories eligible for forgiveness.
  • As described above, the default is for the report to run on an “Accrual” basis.  We recommend that you run the report on both an “Accrual” and “Cash” basis to confirm you have identified all expenses that may be eligible for forgiveness.  In addition to expenses that were paid in the 8-week or 24-week covered period, expenses incurred during the covered period and paid on or before the next regular billing date, even if the billing date is after the covered period, are eligible for forgiveness.
  1. Go to the Reports menu, then Company & Financial.
  2. Select Profit & Loss Detail.
  3. Select Customize Report.
  4. From the Display tab, select the From date to match the date you received your PPP funds, and set the To date to 8 or 24 weeks after.
  5. Under the Display tab, select the ‘Report Basis’ as Accrual.  Note, the default is for the report to identify expenses on an “Accrual” basis, but you may change this default, so the report identifies expenses on a “Cash” basis.
  6. Select the Filters tab, then select the Multiple Account filter.
  7. Select the Account dropdown, then select the desired accounts as applicable to your business from the list of eligible expenses as described above.
  8. Select the Headers/Footers tab, and rename this report to “PPP Non-Payroll Expense Report for PPP Loan Forgiveness Determination”
  9. To run your report, select OK.
    • Note: To save the report settings, select Memorize then give the report a name and select OK.
  10. When you’re done, select either Print, Email, or Excel.
  1. Go to Reports.
  2. Look for Profit and loss, then select View.
  3. From the Tags ▼ dropdown, select the tag you used to track PPP loan transactions.
  4. From the Date picker ▼ dropdown, select Custom date.
    • Start date: Select the day your lender sent you the funds.
    • End date: Select 8 or 24 weeks after the date you received your PPP funds.
  5. Select Apply.

Note: This report doesn’t include home office expenses. If you’d like to view these expenses, you can use the filter from the Transactions page.

Disclaimers

Regulations and guidance from the SBA and the U.S. Department of the Treasury on the PPP are evolving rapidly and the above information may be outdated. Please refer to the latest guidance from SBA and Treasury to confirm current program rules and how they apply to your particular situation.

The funding described is made available to businesses located in the United States of America and are not available in other locations.

This content is for information purposes only and should not be considered legal, accounting or tax advice, or a substitute for obtaining such advice specific to your business. Additional information and exceptions may apply. Applicable laws may vary by state or locality. No assurance is given that the information is comprehensive in its coverage or that it is suitable in dealing with a customers particular situation. Intuit Financing Inc. (d/b/a QuickBooks Capital) does not have any responsibility for updating or revising any information presented herein. Accordingly, the information provided should not be relied upon as a substitute for independent research. QuickBooks Capital does not warrant that the material contained herein will continue to be accurate, nor that it is completely free of errors when published. Readers should verify statements before relying on them.

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