Posted by ACCU Staff ● Apr 28, 2020 3:34:19 PM

Eight Best Practices for Proving Proper Use of Funds and Maximizing Your Loan Forgiveness


This article outlines eight best practices to follow in order to prove proper use of SBA/PPP loan funds and maximizing the amount forgiven as per recommendations made by Capin Crouse, LLP

Out of an abundance of caution, it is recommended that you thoroughly create a paper trail to prove that your organization is following the PPP guidelines. That is, you should be over-prepared to account for how each dollar is allocated.

The following information is provided as a courtesy and meant to offer guidance in preparing for loan forgiveness. It is highly recommended that a PPP loan recipient seek assistance from their accounting, payroll, or book keeping partners if they are unclear about any particular point listed below - and to ensure proper record keeping.

As per Capin Crouse, LLP best practices published April, 2020 authored by Capin Crouse Partner Stan Reiff it is recommended that:

  1. “A separate bank account should be established for the funds to be deposited into so that you keep the SBA/PPP funding segregated.”

    Note: because the audit trail is so important, ACCU required a dedicated PPP checking account prior to loan funding. If your financial institution did not do so on your behalf, it is recommended you do so – we can even help establish a dedicated checking account for your PPP funds.

  2. “Work with your payroll provider to ensure that they are properly coding payroll to match the CARES Act provisions that include expansion of the Family Leave Act. They should calculate your payroll segregate with new CARES Act coding that you can use for reconciling that allowable payable accounting for the various payroll tax credits, etc.”

  3. “After you process payroll, complete a reconciliation schedule that outlines the allowable/approved payroll/benefits, etc.”

  4. “Do a funds transfer for the amount that equals the allowable payroll/benefits per reconciliation schedule from the SBA/PPP funds account to your general operating account.”

  5. “Create a monthly schedule of allowable rent/lease/mortgage and related utilities”

  6. “Once a month or as appropriate, transfer funds from SBA/PPP account to ministry [or business] operating bank account.”

  7. “Keep a copy of the interbank funds transfer with the supporting documentation.”

  8. “Create and maintain these packets of information for each transfer”.


Capin Crouse Webcast for Nonprofits: A First Look at Paycheck Protection Program Loan Forgiveness - Watch Now

Additional resources pertaining to loan forgiveness can be found on Capin Crouse’s website.