PPP Loans: Setup/Tracking options

There are several ways PPP loans can be set up and tracked in RFMS.  The first step should always be to contact your accountant to find preferred method. RFMS can then be utilized to track the loan and expenditures accordingly. Three options are outlined below:

Option A:  Requires a new (physical) checking account from bank with only PPP funds and a new RFMS Bank Register

1. Create three new account codes (Accounting > File > General Ledger > Chart of Accounts).
   -Asset: PPP Bank Account
   -Liability: PPP Loan
   -Expense: PPP Expense/Gift
2. Create an RFMS bank register for this new asset (Accounting > File > Banking > New Register).
3. Post a "Not for sales income" deposit in the PPP bank account.  Code to PPP Loan.
4. When writing checks applicable for the PPP Loan*, use the new checks and PPP Bank Register in RFMS. *(Link to home treasury fact sheet)
   If the bank register balance is depleted, your loan funds are also depleted.  
5. When loan period has ended, post journal entry for entire full amount of all checks posted in PPP bank register (Accounting > File > General Ledger > Journal Batch Entries)
   -Debit PPP Loan
   -Credit PPP Expense
6. If a balance exists in the PPP register, you may be required to repay the balance of the loan.  If that is the case, write a check for the remaining funds and code it to the PPP Loan.  This will leave the both PPP Bank Asset and the PPP Liability with a zero balance.
7. The PPP Expense/Gift account should reflect a credit balance.  This will reflect all monies used from the loan.

Option B: Requires a new RFMS Bank Register (but not a new account or checks from your bank)

1. Create two new account codes (Accounting > File > General Ledger > Chart of Accounts).
   -Liability: PPP Loan
   -Expense: PPP Expense/Gift
2. Create an RFMS bank register using your PPP Loan liability account (Accounting > File > Banking > New Register).
3. Post a "Not for sales income" deposit in the operating bank account.  Code to PPP Loan.
4. Post a "Not for sales income" deposit in the PPP bank account.  Code to PPP Loan.
5. After writing checks using your operating account, open the PPP bank account.
6. Create bank charge for the sum of the applicable* checks written. When RFMS prompts for the account code for the bank charge, use the PPP Loan account code. *(Link to home treasury fact sheet)
   --NOTE: Make sure these bank charges have CLEAR descriptions (also using notes, if necessary).  Examples include: Checks 1233-1264 Sub Payroll, Check 1283 Rent, etc.
7. When loan period has ended, post journal entry for entire full amount of all bank charges posted in PPP bank register (Accounting > File > General Ledger > Journal Batch Entries).
   -Debit PPP Loan
   -Credit PPP Expense/Gift
8. If a balance exists in the PPP register, you may be required to repay the balance of the loan.  If that is the case, write a check for the remaining funds from the operating account and code it to the PPP Loan. 
9. As performed with previous check runs, post bank charge as outlined in step 5, and confirm the ending balance of the PPP Loan register is zero.

Option C: To be used if PPP funds have already been deposited into existing checking account without creating a new bank account with the bank or within RFMS.

1. Create two new account codes (Accounting > File > General Ledger > Chart of Accounts).
   -Liability: PPP Loan
   -Expense: PPP Expense/Gift
2. When cutting payroll checks/posting payables applicable for the PPP Loan*, checks should be coded to the PPP Loan account code. *(Link to home treasury fact sheet)
3. When loan period has ended, print the journal for the PPP Loan account code (Accounting > File > General Ledger > General Ledger Functions > Print Journal).  Compare balance to loan amount.
4. If balance exists, you may be required to repay the balance of the loan.  If that is the case, write a check for the remaining funds and code it to the PPP Loan.
5. Review the detail of the Journal printed in step 3 for reclassification.
   -Debit appropriate accounts codes for checks posted to PPE loan account code in this time period (payroll, rent, utilities).
   -Credit PPP Expense/Gift

PPP Loan Processing in RFMS - Video and Powerpoint