PPP Loan – IRS Releases Rulings on Deductability of Expenses

When the CARES Act that created the PPP (Paycheck Protection Program) was written, Congress included a provision that specified that PPP proceeds that were ultimately forgiven under the program were not taxable. The IRS has issued a series of Revenue Rulings (starting with 2020-32) that state that expenses paid with tax-free income are non-deductible.

Many people believe that this does not represent the intent of the legislation because–in effect–it adds the amount of the loan to the forgiven borrower’s bottom line. By denying the deductability of the expenses paid with the loan, the IRS accomplishes the same tax effect as including the proceeds of the loan in income.

Now the IRS has released ruling 2020-27 stating that even if the loan is not forgiven until 2020, the expenses are not deductable in 2020.

If you have questions about this, you should consult your tax advisor. For safety’s sake, it is important to plan for the extra income in 2020.

How to Try Microsoft Dynamics 365 Business Central

Microsoft D365 Business Central looks like a very busy web site when you login in. There is a learning curve; finding features and reports goes faster if you have a bit of help. We released an 11 minute video this week to help navigate through the system. A few features covered are discussed below.

Selecting Business Central Role Centers

The first page that comes up when you log in to Business Central is called a Role Center. There are different pre-built roles in Business Central like “Business Manager” or “Accountant.” Each of these has different Role Center links that make it easier for someone in that role to get to the functions they need. To see and change a user’s Role, click on the gear icon in the upper right corner and choose, “My Settings.”

Dynamics 365 Business Central Role Center screen capture.

Managing Multiple Companies

You can have as many companies as you want to set up in Business Central. Change companies on the “My Settings” page just like the Role. The license that installs with Business Central (the trial license) requires that company names begin with CRONUS.

Menus, Tabs, and Actions

The Role Center for Dynamics 365 Business Central also has a drop down menu at the top. Quick links (like Customers, Vendors, and Items above) take you directly to needed data. Actions are like quick links; actions preceeded by + will add a new item. So the Action labeled “+Sales Quote” creates a new sales quote.

More Information on the Video

The video covers this and more. Included are suggestions for using the sample data. For example, Blue, Red, and blank locations (warehouses) are good choices because they don’t require you to use the Warehouse Shipping and Receiving functions in the system to create and post Sales Orders and Purchase Orders. The full video runs 11 minutes and provides an introduction to finding what you need. We are planning a follow up video on making design changes in BC.

The Business Central video is available on YouTube. If you’d like to set up a trial of BC, you can do that here. More information is available on our website.


PPP Changes Signed

Perhaps a blog about IT and business software isn’t the place for news about the Paycheck Protection Program. We’ve always focused on business applications of technology, though. In this case, the PPP is an important tool for business continuity. So we want to make sure that our readers at least have occasional information about what’s going on.

Here’s an article from Forbes discussing the changes to the PPP that were signed into law last week.

Congress Proposes PPP Changes

It’s hard to tell exactly what Congress will be able to pass, but it seems that there is bipartisan support for helpful revisions to the Paycheck Protection Program. Since the PPP loans had different disbursement dates, the conservative answer is to plan using the currently available program parameters. Here’s a recent Forbes article on proposals in Congress.


E-commerce Site Sales Increase by Double Digits

According to a New York Times article, Amazon sales are up 26% from a year ago in the First Quarter of 2020. Motley Fool’s stock recommendation service doubled down on their Image from shopping site - view cart icon.recommendation of Amazon as a buy. Etsy, a marketplace for small handicraft and other sellers, also reported a 34.7% increase in marketplace revenue. eBay is pretty much even for the 1st Quarter, with a 1% decline in marketplace revenue.

As large as these companies may seem, they have one thing in common: many of the sales made on these platforms are made and fulfilled by small companies. The anecdotal information we have is also encouraging: a $5 million retail distribution company is up 40% this year over last, with most of the increase coming from online. Another small retailer client reported a 49% increase in online sales.

Coronavirus is devastating sectors of the economy, but it may also offer an opportunity. If your business is not currently online, now might be a good time to test the water. Let us know if you would like some suggestions.


PPP Loan Forgiveness Application Out — Watch for Gotchas!

Checking calculations on a spreadsheet.You can download the PPP Forgiveness Application form here. Here are a few things we see (this isn’t professional advice, just a few points to think about):

  • The period over which you collect expenses (payroll and allowed expenses) is 8 weeks, starting either from the date you received the funds, or the first day of the following pay period (Alternate Payroll Covered Period). Whichever you choose (and it can make a difference, so you need to do the calculation with both dates), you can include expenses paid or incurred. You’ll have to study the rules for the difference, but you can’t count expenses twice.
  • Since you based the amount of the loan of the average monthly payroll cost times 2.5, many businesses will not get forgiveness of the entire loan amount. Example: suppose you have a payroll of $20,000 per month, all salaries paid on the 15th and end of month ($10,000 per payroll). You request $50,000 in PPP loan (2.5 x $20,000). Now you calcuate 8 weeks of salary. You’ll probably have only 3 actual payroll dates in the 56 day (8 week) period. If you hold one period of salary, you have (apparently) incurred another payroll worth of expense. That means you have payroll expense of $40,000, but you have to come up with $10,000 of rent, mortgage interest, etc. during that 8 weeks.
  • Owing money isn’t really an issue. The interest rate is 1%.
  • Be careful what you spend the money on. If you deposit it into your general operating account and pay bills, you may not be using it for “covered expenses,” but you agreed (and signed) that you would only use it for “covered expenses.”
  • One last item: there’s this nasty little signoff on the last page: “does not exceed eight weeks’ worth of 2019 compensation for any owner-employee or self-employed individual/general partner, capped at $15,385 per individual.” This may further limit the compensation you are allowed to include.

Lastly, all of this is changing. Several organizations including the AICPA and NFIB are pointing out that this math doesn’t work for all businesses. So expect to see some changes.

Fines and Jail Time for Unneeded PPP Loans

In the wake of several large and public companies getting PPP loans, the SBA is talking tough about audits of the “necessary” certification in the PPP application. The documentation necessary for loan forgiveness is also getting a large amount of press among CPAs and other professionals. If you applied for a PPP at the direction of a banker or other professional, and you had cash assets or lines of credit available, you might want to read the article below and have another conversation.


Dynamics 365 Business Central April 2020 Enhancements

Continuing the schedule of significant releases, Microsoft has announced several new features for Business Central. Some have already been released, and others are scheduled for later in April (or perhaps May). Three significant new features are:Upgrade Upgrading Software Program Icon Symbol On Computer Keybo

  • Extended price calculations. Microsoft continues to increase the number of options for advanced price calculations. For companies that need more complex calculations, see the documentation here. Note the information box on this page with the following key information: “The new price calculation capabilities in 2020 release wave 1 exist in code only, and do not include any user experience. We will provide that in an upcoming release. For now, to use the new capability you must create your own page.” In other words, the pricing calculation features have been developed, but you will need a developer at this point to use them. Contact us at Data Guidance Group if you need assistance with this new feature.
  • Improved Bank Account Reconciliation. The look of this page, and the ability to match statement activity with accounting record activity has been improved in this release.
  • Receive more items than ordered. Several clients have asked about this feature over the years. In practice, sometimes the vendor ships overages (this is quite common in the printing industry, for example). This feature allows businesses to receive more than the quantity ordered in cases where this is more economical, or part of the agreement with the vendor.

We will have more information about the 2020 Wave 1 release in future posts. You can find the full list of enhancements here.

Paycheck Protection Program Details

We have mentioned to some of our clients that the US CARES Act included the Paycheck Protection Program. The Program functions as an SBA loan that is forgivable under certain circumstances. Here is a Forbes article on it:


And here is the application (as of today) on the Treasury website:


It may be just the shot in the arm your small business needs to make it through these turbulent waters.

Business Central: Modifying Reports

One of the things you notice when getting started with Business Central extensions is the sample first App walk-through includes Table Extensions and Page Extensions. It does not include extensions for reports. Likewise, the documentation for reports does not include a report extension object. There’s a good reason for this: report extensions don’t exist, at least as of the October 2019 Wave 2 Release. It has been added to the request list by several.

So what if you need to add something to a report? I’d suggest this approach.

If the data you want to add to the report is standard Business Central data such as the External Document Number, start with this first approach. If the data you want to add is not standard Business Central data, for example if it comes from a table extensions that you created, go directly to the second approach.

First Approach To Report Customization

First, go to Report Layouts in Business Central; select the report you want to update. Also notice whether the default report is Word or RDLC. Now choose Process > Custom Layouts. You will see the screen below.

On the Custom Layouts page, select New, then click the New… menu item. This report is an RDLC layout, so select the RDLC layout as shown.

Copying a Business Central Report built-in layout.

Press OK, and you will see a list view, with report 9 added. On this list view, select the report, then select Layout > Export Layout. This will export the RDLC layout, which you can open with Microsoft Report Builder.

If you do not have this loaded on your system already, you can download it from the Microsoft website.

On the left-hand side of the report, expand the dataset until you can see column names. Look through these column names to see if the data you want to add to the report is present. Examining an RDLC report's dataset in Microsoft Report Builder.Note that as I mentioned above, if you have added data to Business Central, it will not be shown here. If you find the field that you are trying to add, use Microsoft report builder to add it.

Once you have made the modification, go back into Business Central. On the Custom Report Layouts Page, choose Layout > Import. Once you have done this, choose Update Layout from the same layout menu. You should now be able to run the report with the new layout. This is also the method that you would use to change fonts or other styles in a report.

Business Central Report Modification When Easy Does Not Work

If this method does not work because you are trying to add data to report that is not on the dataset list, will have to use the VS Code development environment configured for AL as described here.

If you are using Business Central 14 or Dynamics NAV 2018, you will need to export the report object from the database and convert it to AL. That process is described here.

If you are using Business Central 15 (October 2019, Wave 2), take a look at the on-premise installation ISO. In the Application directory, you will find the code for the BaseApp reports in the BaseApp directory. There are also some other interesting source files in this directory.

To find the report we have been working on, you will need to unzip the BaseApp source code and find the report file which in this case is called TrialBalanceBudget.Report.al. If you copy this into your own AL project (recommended), you will also want the report layout file TrialBalanceBudget.rdlc. You will have to change both the name and the report number, and I recommend that you change the caption (in the AL file) to reflect the fact that the report has been customized.

Applying the New Report In Business Central

You can use this technique of copying and changing the source code for any report in the base application. Then publish these as extensions, and use Page Extensions to place them on any pages where the reports appear. To find these pages, you can open the full AL BaseApp code in the development environment and do a text search. Of course, the most common things will be changing are probably things like Sales Orders and Purchase Orders, and these can simply be changed on the report selection set up for the appropriate module.

Let us know if we can help you with this, and have fun customizing Business Central.