As the repercussions of COVID-19 continue to materialize, many businesses are exploring relief programs and options for keeping their doors open and financials stable. Whether you are just starting the application process, or you have already been approved for financial assistance, there are many ways a CPA can help you and your business get back up and running quickly, safely, and efficiently.
While you know your business best, your CPA should already have a clear picture of your business, giving them a unique position to offer objective perspectives and thoughtful recommendations. Here are a few of the current and future advantages of working with a CPA when seeking COVID-19 relief.
Determining the Right Program
Small businesses have a myriad of options to consider when it comes to federal, state, and even community-based resources and relief programs. While many companies have already applied for relief from the Paycheck Protection Program (PPP), Economic Injury Disaster Loan (EIDL), or the Employee Retention Credit, many are still struggling to determine the assistance program right for them. It’s times like these that a CPA can help you not only understand your options and select the plan best for your business, but also assist you in the application process and ensure you utilize funds appropriately and effectively along the way.
Whenever the government passes widespread legislation, like the COVID-19 stimulus package, it is the job of CPAs to thoroughly understand the mechanics of how such changes will affect their clients. In this case, selecting the right relief program requires comprehensive knowledge of your business’ financial standing, operational practices, and associated risks. Not every financial assistance option, tax credit relief program, or loan is right for every business, and a CPA can help you select the solution that best addresses your unique situation and financial circumstances.
Keeping Up with Evolving Rules and Regulations
If it seems like new relief guidance is coming out daily, that’s because the Small Business Administration (SBA) is continuously releasing new guidance and regulations for applying, receiving, and applying for debt forgiveness. Understandably, many businesses are finding it difficult, if not completely impossible, to tend to their business and simultaneously keep up the rapidly changing compliance rules.
Your CPA’s familiarity with the ins and outs of your operation, coupled with access to up-to-date information about SBA rules and regulations will keep you compliant with current regulations and ensure you are prepared for changes in the future.
It’s important to note that many relief packages, notably PPP, require specific documentation to be provided to receive debt forgiveness in the future. It’s also worth noting that debt forgiveness is not guaranteed, and there are a variety of factors that will determine whether or not a particular company will be approved for forgiveness. For businesses and lenders alike, the SBA’s requirements will undoubtedly spur some complications and confusion, and a CPA can serve as the liaison between the two parties.
Businesses will need to submit documents proving their loan funds supported payroll costs for the eight weeks following the loan origination date, including salaries, health insurance premiums, employer-paid retirement plan funding, and copies of lease agreements and loan statements. In some cases, businesses were forced to lay off or furlough workers before receiving their loan. In other cases, employees found it more financially favorable to seek unemployment than to return to work. Both of these scenarios create dilemmas for employers seeking debt forgiveness, and a CPA can help accurately interpret the SBA’s contingencies and ensure you follow the necessary steps to satisfy the requirements.
Additionally, smaller businesses may find it difficult to meet the spending levels required for the PPP loan. A CPA can guide you through what to monitor and help you strategically prepare a PPP spending plan that meets current and future requirements – both of which are key factors in providing the right calculations to maximize your debt forgiveness.
Aside from tackling your most time-sensitive needs, a CPA can also help you put together a business plan that takes into account the lasting effects of your new loan and expense deferrals. Things like rent, health care, payroll taxes, and even renegotiated leases or loans will play a role in how your new business plan is designed and executed. A CPA will also look at the role these changes will play in your 2020 tax season and beyond.
Finding Opportunities in Unchartered Territory
While keeping your business running and employees paid is (and should be) your top priority, a CPA can play a vital role in uncovering unlikely opportunities during difficult times. A CPA can shift their perspective and help clients rethink their business goals and take advantage of emerging markets and new industries sparked by the pandemic. Advancements in health care, e-commerce, remote technology, and distribution are just some of the many areas that businesses can explore as sources of future revenue and opportunity. This pandemic will also spark many companies to revisit their disaster and business continuity planning, processes that CPAs can offer immense support and guidance.
You’re Not Alone
With all of the hardship and difficulty COVID-19 has caused, it’s important to remember that you are not alone. Your CPA is there to guide and support you so you can focus on keeping your business and your employees strong and healthy.
CRI is always here to help you with whatever assistance you or your business may need. If you have questions about your COVID-19 relief options or are looking for additional relief resources, please do not hesitate to contact us.