How to Track Your PPP Loan Expenses in Sunrise

How to Track Your PPP Loan Expenses in Sunrise

If you’ve received a Paycheck Protection Program (PPP) Loan the next step would be to apply for Loan Forgiveness. To ensure that you receive forgiveness for your PPP loan, You will need to track EVERYTHING. Every dime, nickel, and penny. It is important to be diligent about categorizing all your PPP expenses.

We’ll walk you through how to track your PPP spending in your Sunrise account. This will help when it’s time to show how you’ve spent your PPP money.

Chart Of Accounts for Approved Expenses

We have configured a special PPP Approved Expenses Chart of Accounts. This will allow you to track your PPP forgivable expenses. Once all is said and done, you will have all the numbers you need to transfer directly to the PPP Forgiveness Application form.

To navigate to the special PPP Chart of Accounts, you will need to:

Step 1: Select More on the main navigation panel,

Step 2: Click Chart of Accounts.

Step 3: Scroll down until you see 8900 series.

These are the expenses you need to be aware of, below provides a more detailed description of them

  1. Expense - #8910: W-2 employee compensation. PPP Loan Expenses that include the gross amount of wages for employees.
  2. Expense - #8920: Employer healthcare benefit contributions. PPP Loan Expenses that include payment for the provision of employee benefits consisting of group health care coverage, including insurance premiums.
  3. Expense - #8930: Employer retirement plan contributions. PPP Loan expenses that include employer contributions to defined-benefit or defined-contribution retirement plans, such as 401K.
  4. Expense - #8940: State & local payroll tax liabilities. PPP Loan expenses that include payment of state and local taxes assessed on the compensation of employees.
  5. Expense - #8950: Owner compensation. PPP Loan expenses that include owner compensation for self-employed individuals.
  6. Expense - #8960: Business mortgage interest payments. PPP Loan expenses that include mortgage interest payments (but not payments on the mortgage principal).
  7. Expense - #8970: Business rent or lease payments. PPP Loan expenses that include business rent or lease payments.
  8. Expense - #8980: Business utility payments. PPP Loan expenses that include business utility payments.
  9. Other Revenue - #7910: PPP Loan Proceeds. PPP Loan proceeds include deposits received for the SBA Paycheck Protection Program

How To Track PPP Spending In Your Sunrise Account

Remember, the standard expense general ledger accounts referenced in the above transactions may be different from what you are using for your existing bookkeeping. Adjust as needed.

You’ll start with recording your PPP Funds Received.

Step 1: Navigate to your Bank Account, click Match Transactions.

Step 2: Find the PPP Loan Deposit in your bank.

Step 3: Select Create a Transfer.

Step 3: Enter a description of PPP Loan Proceeds and select the 7910 account.

Step 4: Click Match.

Process your bank feed transactions as normal, no changes, using the standard expense accounts you’ve been using.

Categorize and Match As Normal

From your connected bank feed you’ll want to create a transfer into the correct Chart of Account series.

For example, if you have Business Taxes you’ll want to categorize this expense in the new configured Chart of Accounts. It would go under Expense - #8940: State & local payroll tax liabilities.

Step 1: Select the PPP expense.

Step 2: On the right side column select Create a Transfer.

Step 3: Under Account, type in the corresponding account number list above.

Step 4: Click Match.

Continue this with your other PPP payroll expenses.

The Kicker!

However, for general payroll this is where it changes. Since we have to take the owner’s compensation out of the payroll expenses you will want to categorize that under the 6300 - Salaries and Wages series.

We will come back to this under manual transactions.

Download Payroll Reports

In order to process your PPP payroll you’ll want to download your company’s reports from your payroll processing system (ex: Gusto, BambooHR, Square Payroll, etc.) The SBA is requiring people to hold onto these documents for 7 years so you’ll want to make sure you have them saved and accessible.

Step 1: Log into your payroll service provider website.

Step 2: Download the reports that will allow you to access the following information

  • Employee Gross Wages
  • Officer Salaries
  • Employee benefits paid through payroll
  • Employer Payroll Tax Liability

Step 3: Navigate back to your Sunrise account.

Step 4: On the main navigation panel select More, then click Transactions.

Step 5: Select the New Transaction button in the top right corner.

Step 6: Choose Manual Transaction.

Note: The reports you just downloaded are just to reference. You will have to manually enter the information into Sunrise. There is no way to upload the reports so they would be entered for the correct PPP transactions.

Entering Your Payroll Transactions

Since we still have to account for the owner’s drawer. we will have to manually enter some payroll information. We’ve already reconciled the 6000 series, we now have to credit those and debit the 8900 series so they are in the correct location and your Profit and Loss Statement is accurate.Based on your payroll reports you’ll want to create the following entries that pertain to your business.

How to label your Payroll transactions:

  • Date: The date the transaction was accepted and approved by the bank
  • Description: Description: PPP Payroll (Pay Period Dates: 5-15 - 5-30-20 | PPP Forgivable Cost)

Now we will be filling in the Account, Debit or Credit portion:

  • Line 1 - Account 8910: Enter total gross wages as a debit. (Be sure to subtract any owner-employee wages).
  • Line 2 - Account 8920: Enter the employer matching contributions for your retirement plan as a debit. (Be sure to subtract any owner-employee employer contributions).
  • Line 3 - Account 8940: Employer Payroll Tax Liability. Enter the total of any state & local payroll taxes as a debit.
  • Line 4 - Account 8950: Debit gross wages paid to business owner(s).

NOTE: The accounts used for the next items will depend on the accounts you used when expensing your payroll.

  • Line 5 - Account 6300: Credit Salaries & Wages the same amount used for Line 1
  • Line 6 - Account 6210: Credit Pension and Profit Sharing Plans the same amount used for Line 2
  • Line 7 - Account 6260: Credit Business Licenses and Taxes the same amount used for Line 3
  • Line 8 - Account 6305: Credit Officers Salaries the same amount used for Line 4

If your debit and credits total the same amount, you did it right! Next, approve the transaction and repeat this process for each payroll process within the period covered by your PPP Loan (8 weeks or 24 weeks).

Note: Be sure to upload your payroll reports to Sunrise using the PDF attachment, you can attach them directly to the manual transactions so they are readily accessible when it comes time to complete that Forgiveness Application.

Other PPP Expenses (Mortgage, Rent, Utilities)

Whew, that was certainly some work! Thanks for bearing with us. The good news that the rest is much easier. We will still be using the manual transaction process for tracking your mortgage interest.

Business Mortgage Interest

Ideally your mortgage company provides you with a monthly statement of principal and interest payments, if not you’ll need your amortization schedule.

Step 1: Create a manual transaction (like we did with Payroll).

Step 2: The date and description is as follows:

  • Date: Date mortgage is paid
  • Description: PPP mortgage interest

Step 3: Debit Account 8060 for only the interest portion of the payment.

Step 4: Credit Interest, Mortgage the same amount.

Step 5: Approve.

Rent, Lease, Utilities

Your rent/lease and utilities can be processed right from your Sunrise bank feed.

Rent or Lease: When the rent/lease payment is in your Sunrise bank feed, add it to your PPP account.

Step 1: Navigate to your bank transactions.

Step 2: Identify your Rent or Lease transaction.

Step 3: Edit the transaction by changing the account from 6230 Rent to 8970 | Business rent or lease payments.

NOTE: Make sure the payment is within your PPP coverage period.

Utilities: When your Utilities payment is in your Sunrise bank feed, add it to your PPP account.

Step 1: Navigate to your bank transactions

Step 2: Identify your Utilities transaction

Step 3: Edit the transaction by changing the account from 6230 Rent to 8980 | Business utility payments.

NOTE: Make sure the payment is within your coverage period

We know this is a lot. We tried to simplify the process as much as possible. However, if you still need some assistance or just tired of trying it on your own. Hand it off to one of our Loan Forgiveness Specialists. We’ll pair you with a dedicated expert to do the work for you. Learn more here.

When to Submit for Loan Forgiveness

Monitor the total of the 8900 series expense accounts. When the accounts total matches the total of your PPP proceeds, you are ready to process the Forgiveness Application. Make sure that your payroll costs (accounts 8910 through 8940) meet or exceed 60% of the total proceeds.

Tracking
Monitor the balance in the 8900 series accounts. The individual journals can now be downloaded and sent to your Lender at the end of the 8 or 24 week period. This will reflect how the loan proceeds were spent.


Meet with a Loan Forgiveness Specialist

Need a little help making sure you have all your PPP documents in order? Meet with one of our Loan Forgiveness Specialists to get tailored advice specific to you are your loan, so you will be prepared when you submit to your lender. Sign up now to schedule an appointment.

Disclaimer and Helpful Resources

Disclaimer: Any guidance or information we've provided for the purposes of applying for a loan under the Small Business Administration's Paycheck Protection Program ("PPP") is for informational purposes only. We strongly recommend you consult with your accountant or bookkeeper.

This process prepares you for the PPP Loan Forgiveness application. So, one final word of caution, pay close attention to the guidelines that are forthcoming from SBA and IRS. You WILL NOT want to report the PPP loan proceeds OR the 8000 series expense totals as part of your business taxes! LINK TO LATEST IRS FAQ.


Helpful Resources


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