Managing Payroll Costs Critical to PPP Loan Forgiveness
For small businesses in dire need of cash after 2020, there is good news from the US government. Paycheck Protection Program (PPP) loans are back to strengthen the economy and provide the much-needed support for small businesses to survive. However, these loans do come with a stringent set of criteria for securing loan forgiveness. Fail to manage payroll and expenses accurately and your application will end up on the rejected pile. You do not want that, do you?
Compliance with these rules can be particularly challenging for organizations that still rely on the old pen-and-paper method or spreadsheets. Those methods are often time-intensive and lead to errors and other problems during audits. When dealing with PPP loan forgiveness, those mistakes can become quite costly for you and your business.
This is where Replicon’s time tracking platform comes into the picture. By providing robust features and capabilities, our platform helps organizations of all sizes accurately process gross pay and expenses while maintaining a clear audit trail. Here is how Replicon helps with each aspect of PPP loan forgiveness.
Confidently Meet Payroll and Salary Criteria
The government provides PPP loans primarily to help businesses cover payroll costs, allowing employees to remain assured of a steady paycheck even during the crisis. As such, businesses must use 60% of the PPP loan, at minimum, for paying their employees, as established by the US Small Business Administration. Additionally, you must maintain 75% of the salary per employee. If the pandemic forced you to reduce employee salaries or hours, you must use the loan to improve them to at least 75% of what they were before.
Here are a few ways Replicon can simplify the fulfillment of the above criteria for you.
Monitor Payroll Data: Replicon’s time and attendance capabilities allow you to monitor all related labor costs in real-time, giving you an in-depth understanding of pay and other expenses incurred. With the click of a few buttons, you can easily fetch pay codes and hour data for each individual over any specified period. This makes it vastly easier to know if you are maintaining the specified 75% in salaries and hours. This data is all real-time, allowing you to immediately identify any issues and rectify them quickly.
Calculate Payroll Accurately: With the time-tracking features, all employee times are meticulously recorded with the help of validations and automatic pay rules which enable accurate pay calculation and reporting. The ability to configure timesheets as per business needs for each user and pre-populate them with data helps reduce human errors. All calculations can be automated, enhancing the accuracy of the data further.
Ensure Labor Compliance: Replicon’s ability to ensure compliance with labor laws will also benefit any organization that does business in multiple locations across the nation. Instead of trying to track all pay rules for each employee manually, Replicon will automate the application of relevant pay rules with its pay rule library and help with monitoring changes using the compliance dashboard. This simplifies the compliance process, ensuring every employee is paid correctly with zero errors. Replicon makes sure that its compliance library is always up to date with the latest changes in pay rules for every location.
Monitor the 24-Week Coverage Period
You will have 24 weeks to spend the entire amount you received as the PPP loan. The loan forgiveness will not cover any payments made after this coverage period ends. Do note that the coverage period starts on the date that you get the first payment from your lender. This date is not necessarily the same date that you sign the agreement.
With Replicon, you can monitor all relevant time and gross pay data effortlessly thanks to the following capabilities.
Get In-depth Payment Information: Replicon’s platform offers intuitive functionality that enables you to track gross pay, expenses, and hours at a glance. You can easily discover how much of the loan amount has been spent and even drill down into the associated labor costs and expenses by the week or other relevant filters.
Get Real-time Notifications and Reports: Replicon even provides notifications when certain user-specified thresholds in budgets are crossed. This enables you to remain vigilant about loan usage. You can generate reports on pay and expenses on a daily or weekly basis to ensure that the loan is used correctly and within the timeframe specified.
Track and Verify Expenses
The PPP Loan is also usable for paying off certain expenses as long as you are using 60% in payroll at least. A few of the expense categories covered by this loan include rent, utilities, operation expenses, mortgage interest, supplier costs, and worker protection costs. You can also use the loan to cover the costs of any property damages incurred due to public unrest in 2020.
As you will see below, Replicon’s features do make it easier to manage all expense-related functions.
Track and Approve Expenses: Replicon’s expense solution makes it easier to track and calculate all expenses. Expenses can be added by any user with the relevant permissions but they will always need to be approved by a supervisor. Approvals can be escalated automatically for faster approvals while keeping stakeholders notified in real-time. The approval workflows can be customized to meet business requirements. The presence of validation rules adds to the accuracy of the data.
Upload Receipts for Audit Compliance: Users can also upload receipts directly into the platform to be processed immediately. Apart from eliminating loss of information, it will be of help during audits and documentation down the line.
Specify Budgets: Budgets can be specified in Replicon’s platform, making it easier to compare actuals vs. estimates. In conjunction with the notification and validation capabilities, this allows you to ensure that your workforce spends only as much as you intended. Generate reports anytime to get a real-time view of spending and make necessary adjustments immediately.
Make Informed Decisions: With features like expense tracking, configurable reports, instant notifications, and more, you gain real-time visibility into the expenses. You will also have a dashboard to get a comprehensive view of all expense data and more, making it easier for you to make informed decisions for meeting PPP loan forgiveness requirements.
Ensure Proper Documentation
As per the SBA’s rules, you may have to submit a wide range of documents to support your loan forgiveness claim. Irrespective of the loan amount, you must declare the amount spent on payroll costs. For loans exceeding $150,000, you will need to submit payroll reports and tax filings, income and loss documentation, health insurance invoices, and more. Meticulous records and documentation are necessary to prevent any potential issues during audits.
Diligently maintaining documentation becomes easier with Replicon as you can see below.
Get Zero-error Documentation: Replicon does more than just capture data accurately. It ensures the veracity of that information through validation checks and audit trails. Any input or modification of data can be tracked whenever necessary which is invaluable during audits.
Leverage Configurable Reporting: Replicon’s flexible reporting capabilities enable you to configure and generate gross payroll and revenue reports on a daily or weekly basis. Those reports can then be used for the documentation necessary for the loan forgiveness process.
Store Documents Easily: With Replicon, you can easily attach receipts and other relevant documents to each expense or timesheet entry, minimizing the risk of misplacing them. Links to digital storage like Google Drive and Dropbox are also supported. This enables you to find all relevant documents quickly whenever needed from a single source instead of searching multiple systems.
Make PPP Loan Forgiveness Hassle-Free with Replicon
Replicon’s time-tracking software ensures error-free data by offering features to verify and review every bit of information that it captures. It offers an inbuilt rules engine that makes it easier to adhere to key organizational policies. Replicon even provides advanced analytics to enable business owners and managers to gain invaluable insights about their organizations’ time, payroll, and expenses. You also get mobile apps that allow users to enter time, expenses, and other details while on the go, adding to the overall accuracy and relevancy of your data.
With all of the capabilities mentioned above and more, you will find Replicon to be an invaluable tool when applying for PPP loan forgiveness.