The 2 Tril Bill has been passed by the House, the Senate, and signed by the President.
Thank you for not just crossing, but, disregarding the aisle and performing an act of genuine commitment to America’s financial stability in a time of crisis. For better or worse, you stepped up and pulled it together. Now it’s a go. I feel a rare moment of pride in our imperfect government. I’m proud of all of us. Let’s win this. – Karen Ault, STAC Accounting, LLC –
As only a small business owner knows, for us, there ain’t no unemployment to apply for. Loans can be a savior or a sucker punch wrapped in hope, ‘cause it costs more to get out of the hole than to get in…y’know…with interest and all. Grants are taxable income. Free money isn’t our reality. In times of crisis, we small business owners are usually at the back of the line holding the last piece of paper, and our signature is on it.
The 2 trill package. What is there for us? What do we do? And now for the real question: How do we access it?
At this early point in the game, I can’t tell you what is there for self-employed and SBO’s. My accountancy community is just starting the task of machettying through a thousand-plus page document with more documents on the way with words in titles like ‘Guidance’ and ‘Procedures’, etc…
But I can answer this: What do we do? How do we access it?
What do we do?
Paper trail. Paper trail. Paper trail.
Anytime a small business owner goes for help from any agency or institution, we hear: ‘fill this out and turn that in’. What do they want to know?
- How much?
- Purpose for the grant / loan / credit etc…
- Where’s the proof for the approval?
- And, of course, your signature.
For the beginning of the ‘crisis’ paper trail, show unpaid receivables and unpaid bills. Start here:
Your business activity has been deemed by the government to be ‘nonessential’
- Draft your letter to your customer / client base that follows something like this:
- Dear Customers, As a small business owner, my family and I have received some difficult news. Due to the COVID-19 crisis, my business activity has been listed as ‘nonessential’. For the health and safety of our communities, this ban must be respected. The following is a list of activities I can currently provide under the ban. ___ I look forward to resuming our contracts and business activities, soon. Until then, my family and I will keep you in our thoughts (and prayers). Stay healthy. Sincerely, your name and company.
- Draft your letter to your vendors, cost of goods sold and operating expenses, that follows something like this:
- Dear Vendor, as a small business owner, my family and I have received some difficult news. Due to the COVID-19 crisis, my business activity has been listed as nonessential and must temporarily cease business activity. The income loss interferes with ‘company name’’s ability to maintain payment for (April service/rent/supplies / etc). However, your service/product is required for maintaining business/compliance. Therefore, I’d like to explore possible solutions. In the meantime, please continue to invoice me as normal with the understanding that the federal government recovery package may be a resource used to close the oncoming and current income gaps in the near future.
Your business activity has not been deemed by the government to be ‘nonessential’
However, your client / customer’s business have been affected by the COVID-19 crisis and you have received from them draft letter No. 2, above.
- Draft a response stating that to the best of your ability, you will continue to provide service and invoice per contract and that no fees, interests, or penalties will be added to unpaid invoices incurred due to the COVID-19 crisis. Your paper trail of unpaid invoices has now begun.
- Draft your letter to your vendors, cost of goods sold and operating expenses as done above. Your paper trail of unpaid bills has now begun.
Next: Get your financial statements cleaned and in order. (Yes, you may contact STACaccounting.com for assistance)
- Balance sheet: (Clean it up. Right now).
- Get all accounts reconciled. Including A/R, A/P, Fixed Asset accumulated depreciation matches your filed tax returns, your payroll liabilities.
- P&L: clean it.
- Statement of Cash Flows
Now you are poised and ready to request and receive help to save your business and keep employees employed. The portals and forms will open and become available over the next few weeks. You will not be at the end of the line, this time. Although….it will be our signature on the line. Such is as it is in the world of business ownership and self-employment.
Let’s win this.