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$2.2T CARES Act Gives Unique Advisory Opportunity – But You Must Do It Now

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$2.2T CARES Act Gives Unique Advisory Opportunity – But You Must Do It Now

The COVID-19 crisis is a serious challenge for many small businesses. They face bankruptcy as their revenues have dropped 50% or more overnight. Without help, they will not survive the crisis. The federal government has passed the CARES Act to provide relief for the crisis. It contains the Payroll Protection Program (PPP). This program authorizes $349 billion in forgivable loans to small businesses. They can use this money to pay their employees for 8 weeks during the crisis. If they do, the federal government will forgive the loan.

The PPP gives your accounting practice a once in a lifetime opportunity. With this program, you can transform your practice into advisory overnight. But you must start now.

Help Clients Apply For The Loan

  • Contact Clients: Immediately call all your clients and inform them about the PPP. Make sure that they apply for this money. This is free money from the government. It doesn’t matter if they are affected by the crisis or not. This will also show your clients that you are capable of advisory!
  • Apply For The Loan: Second, help them apply for these funds. I have been through the required documentation, and it is not trivial. Many small businesses will need external help to collect all the documentation. Let that external help be you instead of the bank or some other lending provider. Consider giving this help to your clients for free. This will show them that you care about them.

Make sure you apply for this loan for your own practice as well. This will not only help your practice to get through this crisis. As you get familiar with this process, it will make it easier for you to assist your clients. And you will get firsthand experience with the documentation requirements for loan forgiveness.


Help Clients Get Loan Forgiveness

To get loan forgiveness, your clients must prove that they used the loaned money to pay employees. Other expenses are also allowed up to 25%. These are eligible mortgage interest, rent, and utility payments.

If they can’t prove this, the federal government will not forgive the loan!

Here you have your biggest advisory opportunity!

When your clients have received the money, schedule a meeting with them:

  • Talk to them about the loan forgiveness requirements.
  • Go through all the steps of this process with them.
  • Analyse the changes they need to get in place to live up to these requirements.
  • Divide the list of tasks between you and your client.
  • Explain that this is part of an advisory service you are adopting.
  • If you can help them get $50,000+ free money from the government, paying you $1,000 per month is an easy sell.

These are some of the steps of this process:

  • Adopt Timely Processes: These documentation requirements mean that their books must always be up to date. I’m sure you have at least some clients that are never up to date with their receipts and invoices. And sorting out their bookkeeping during every tax season is a recurring nightmare. But you can use the PPP as leverage to force them to adopt timely processes and month-end close. If they don’t, they will have to pay this loan back to the government!
  • Monitor Progress: After each month, have a status meeting with your client. Go through the progress of the plan you made on the first meeting. Also show if their payroll and rent expenses are on track to get the forgiveness. Use this opportunity to show them other more advanced analyses such as a benchmark report to determine the health of the company.
  • Provide the Forgiveness Documentation: When the 8 weeks are up, provide the documentation they need to get the loan forgiveness. MoreReporting can help with this. Our top focus right now is to get the documentation requirements. There are some guidelines from the government. But the lenders we have been in contact with are still uncertain about this part of the process. When the requirements become available, we will make sure that MoreReporting supports them.

For more information about the PPP, please go to the SBA website

Seize this unique opportunity, the PPP can propel your practice into advisory. But you have to start today. If you delay, you will miss your window of opportunity. Following the steps I have listed above can help save many of your client’s businesses. And this can help America get through this crisis quicker.

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