July 17, 2020 (Courtesy of the Jacksonville Business Journal) GunnChamberlain, P.L., a Jacksonville-based accounting firm, had to reallocate some of its staff to create a team dedicated to guiding clients through the tumultuous process of applying and using Paycheck Protection Program funds.
Shelly Lingor, partner and director of technology and accounting at GunnChamberlain, said the surge in PPP business offset some declines that the tax filing extension caused. Clients that would have normally filed on time in April, are dragging their feet as the July 15 deadline looms overhead. Despite that, the firm pulled together a team of three people to focus specifically on PPP. The deadline to submit an application for PPP loans was June 30, but that doesn’t mean the work for accounting firms guiding their clients through forgiveness is over.
“It’s been tremendous, but with the tax extension deadline, we have a lot of clients that are dragging that out so our numbers are kind of flat,” Lingor said.
Lingor added they have begun reaching out to clients now to get their tax information in to avoid a panic in June and early July.
Cindy Bohn, a CPA at Swindell, Bohn, Durden & Phillips, PL, agreed that the focus on PPP required a huge. Overnight, they went from preparing to tax returns to almost exclusively focusing on PPP.
“We expect to continue to be busy through July … preparing returns for filing by the new deadline date. We will also be busy into the Fall with the initial tax planning for 2020 and assisting our clients who have received their PPP funds so they can apply for forgiveness,” Bohn said.
In the meantime, PPP continues to keep GunnChamberlain busy as clients come with questions and new guidance released from the Small Business Administration continues to change the rules for those who have already taken out their loan. The ever-changing guidelines is the most difficult aspect of the work, Lingor said.
“We’re doing a lot of consultation on that part — helping clients navigate through that because the guidelines still haven’t been clear,” Lingor said. “And they seem to be able to change their requirements whenever they want.”
When new guidance was released, those working on the PPP team had to repeatedly reach out to clients to notify them of new information and they would also formulate blog posts that walk through the changes, as well. Lingor said it’s a very “high touch” process that’s involved lots of client communication.
Bohn agreed, adding that the changes to the application also contributed to a rise in client requests.
“With all of the changes and revisions of the PPP loan program between the time it was announced to application release and then afterwards with multiple application revisions, we experienced a huge influx of client requests for advice and guidance,” Bohn said.
It wasn’t very difficult to reallocate the resources in order to provide this new line of service for their clients, Lingor said. However, they have taken pains to maintain communications with their clients through out each iteration of guidance. For example, initially people could put PPP money towards mortgage interest and other interests, but now the forgiveness application only says mortgage, and not other debts incurred.
“It’s really wishy washy,” Lingor said. “Clients are coming to us and saying, ‘what’s the clarification on this?’ And we just have to say, per the guidelines that we have now, but they’re not final.”
Clients will recieve an email any time there are changes and create a new blog post.
“It’s a lot of hand holding and it’s a lot of touches with the client because they are going through a difficult time, they’re needing assistance,” Lingor said.
One hiccup clients have been running into is centered around people who attempt to bring back employees, but those workers decline to return to work because they are making more on unemployment than at work. If that is the case, Lingor suggested they put in writing that the employee was asked to return and that they declined.
“Then you won’t be penalized for that full-time equivalent person, but it has to be documented,” Lingor said.
Eventually, that person would hypothetically lose their unemployment benefits but she wasn’t sure what mechanism was in place for tracking that.
Bohn said that most questions they receive have been centered around full time equivalent head counts and how to be in compliance for forgiveness. However, she said that people should remember there are steps to ensuring forgiveness, because it isn’t automatic.
“You have to submit an application to your Lender containing certain calculations,” Bohn said. “As with the loan application process, some Lenders may require more supporting documentation than others; be sure to understand what your Lender may require as a part of their forgiveness application.”
Lingor added that companies that received larger loan amounts should expect more federal scrutiny. However, she said forgiveness is more tied to banking relationships.
The worst case scenario is that some businesses will have to give money back, Lingor said, either because it went unused or no longer fit the new guidelines. Lingor said she would encourage those who haven’t yet applied to do so, because funds are still available. However, she added that everyone wants their loan to be forgiven, but that isn’t likely. She advised that people take what they need and use the loans for the intended purpose — to bring people back to work.