Worried About A PPP Audit? How To Prepare For The Process
Posted on: 5 October 2020
If you took out a PPP loan for your small business, you might have heard about the recent call for government audits. The US government has begun auditing many of the businesses that received funds through the Paycheck Protection Program. The audits come as a result of reported fraud associated with the loan program. If you're worried that your business will be targeted for an audit, now's the time to prepare. There are things you can do to navigate the audit process. Being well-prepared for the loan audit can help you to avoid problems. Here are three steps you need to take to prepare for a possible PPP audit.
Seek Legal Advice
If you're worried that your business will be audited as a result of your participation in the PPP loan program, the first thing you need to do is seek legal advice. During the audit, the government will be examining your need for the loan you requested. They'll also be looking to make sure that you followed the certification process and that no mistakes were made. An attorney can look through your documentation to make sure that everything is in order for your audit. They can also help you to get your paperwork together. That way, you're prepared should you receive an audit notification.
Keep Track of Loan Use
If you took out a PPP loan from the US government, it's crucial that you track the use of those funds. The US government established specific rules for the use of PPP funds. Some of the authorized uses included employee wages, and employee health insurance premiums. In order to qualify for the forgiveness of those loan proceeds, you need to be able to prove that the money was used properly. If your business is audited, you'll also be required to show documentation of how your loan money was spent. Because of that, it's important that you keep track of each payment you made with the PPP loan proceeds.
Detail Employee Changes
If you qualified for the PPP loan based on the number of employees you had at your place of business, it's important that you provide details regarding any changes. During the audit, your employee records will be examined. You'll need to provide documentation for any employees who stopped working for you after the loan was disbursed.
Don't let the threat of a PPP audit cause you undue stress. Use the tips provided here to help get you prepared for the process and talk to a PPP audit attorney for help.
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