There have been recent reports in the news concerning an executive order establishing a “payroll tax holiday” beginning September 1. Although we have seen very little in the way of details on the proposal it appears that it would take the form of a “deferral” of social security and possibly Medicare withholdings from an employee’s paycheck. It appears that this decision is voluntary for the employer.
Many clients have been asking us how to record their PPP loan once it is received. The correct answer is to record the deposit as a separate loan on the Balance Sheet. Only after the loan is forgiven should it be written off. When writing off the loan the corresponding account should be an income account called Loan Forgiveness. This will separate this income from all other business income you have for the year.
At Long & Long CPAs we find most small business owners are passionate about what they do. However, they might lack the knowledge to succeed financially and lose track of revenue and expenditures. With years of experience assisting start-ups and small businesses with accounting, bookkeeping and tax-preparation we've run across some common mistakes and some steps to avoid them. Most small business do not have a business plan and have not thought about how to price their products and services.
Every company has different accounting needs. The way we start is to understand your business and discuss your accounting needs and concerns. We can discuss this in our office, over the phone or at your place of business. We enjoy having field trips to visit new businesses. It helps us understand the revenue making cycle. After discussing your needs, we will discuss a plan for how best to serve you. Are you starting a new business?