ACI’s Jay Gettenberg to Appear on July 30, 2020 “Accounting and Auditing in COVID Times” Teleconference

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ACI Managing Partner, Jay Gettenberg, will participate in a broker-dealer tech session teleconference on July 30, 2020 to discuss the regulatory accounting and auditing issues that arose from the coronavirus pandemic.

The six-person “Accounting and Auditing in COVID Times” panel, sponsored by the Foundation for Accounting Education, will examine how the pandemic affected industry practices, including financial statement reporting and auditing disclosures, goodwill impairment, PPP and loan forgiveness, regulatory communications, FINRA oversight, and more. The discussion is designed to provide both FinOps and auditors with recent updates that will assist broker-dealers with the preparation and audit of their books and records, specifically related to COVID and SBA loans.

ACI will will share practical lessons learned while helping over 50 broker-dealer clients navigate the SBA-backed Paycheck Protection Program (PPP), including how to ensure a borrower meets the loan forgiveness requirements. ACI has worked over the recent months to both secure PPP loans and to maximize the benefits of PPP loan forgiveness for dozens of FINRA member firms. ACI’s clients are on track to formally complete all SBA loan forgiveness forms over the coming months, enabling them to be free and clear of the PPP process.

Other topics the panel may address include tax implications for single-member LLCs, effective dates of new standards and their impact on broker-dealers and the latest news from the SEC, FINRA and the PCAOB.

The two-hour teleconference will start at 10 a.m. EST on July 30. Attendees can receive one Auditing (NYSED) and one Accounting (NYSED) CPE credit. For more details and to register, click here: https://cpe.nysscpa.org/product/31905

Focused on Safety, ACI Pushes Office Return to September

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Like many of you, ACI has been weighing when to return to the office as New York City approaches Phase 3. Our original plan was to implement a partial return on July 6th. After discussing amongst our staff and weighing the consequences, we have decided to hold off until at least September.

While eager to get back to our office, we believe health and safety must to come first.  Our ability to effectively meet client obligations remotely has afforded us the ability to maintain a work-from-home environment.

The past few months have presented challenges that were unexpected and unprecedented for many businesses. Everyone at ACI has been impressed by the determination our clients have shown in meeting those challenges.  Whether navigating the SBA’s Paycheck Protection Program or managing human resources, our clients have demonstrated their resourcefulness and ingenuity, which has enabled them to persevere through the lockdown.  We are grateful to be part of these efforts.

In July, we will welcome two new ACI hires. We have added a senior operations role to help support our growing number of carrying/clearing firm clients, who need not only a Principal Financial Officer (PFO) with a Series 27 license, but are now also required to have a Professional Operations Officer (POO) to comply with regulatory obligations. We have also hired an additional bookkeeper, who will both create support during the COVID pandemic, as well as provide us with expanded coverage for new client onboarding throughout the remainder of 2020.

As Economy Reopens, ACI Returns to Office with Safety at its Forefront

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Like many of our clients and colleagues, ACI is looking forward to reopening our office.  We are taking into consideration how to ensure our staff remains safe and healthy, while also providing the expected highest level of service.

The past few months have presented challenges that were unexpected and unprecedented for most businesses. Everyone at ACI has been thoroughly impressed with our clients’ resiliency and determination in meeting recent challenges. Whether navigating the SBA’s Paycheck Protection Program or facing operational challenges of remote work environments, we have seen a great deal of resourcefulness and ingenuity. We are grateful to be part of these exceptional ongoing efforts.      

Our plan is to return to ACI’s Wall Street office on July 6, after the long holiday weekend. The office has already been thoroughly sanitized and we will have masks, gloves and Purell at every workstation. We also purchased two medical-grade air purifiers to help maintain air quality and prevent the circulation of germs.  All ACI employees will be tested for Covid-19 before returning and our plan will be to implement routine testing to minimize the risk of spread.

Our office kitchen will be open, but restricted to one person at a time.

To comply with social distancing, our staff members will alternate between working from home and the office. We have developed a robust work schedule to minimize the staffing in our office each day, while still keeping teams together to maximize efficiency and our ability to effectively meet our client’s needs.  Half of our employees will be in the office and half will be working from home each day. We expect this will help keep everyone safe.

Welcoming New ACI Staff

Our office reopening comes just in time to welcome two new ACI hires. We have added a senior operations role to help support our growing number of carrying/clearing firm clients, who need not only a Principal Financial Officer (PFO) with a Series 27 license, but are now also required to have a Professional Operations Officer (POO) to comply with regulatory obligations. We have also hired an additional bookkeeper, who will both create support during the COVID pandemic, as well as provide us with expanded coverage for new client onboarding throughout the remainder of 2020.

“We wanted to bring our new accountant and bookkeeper on board as soon as the office reopened so they get to meet the rest of our team and begin to integrate into ACI’s corporate culture and operational infrastructure,” said ACI Managing Partner, Jay Gettenberg.

 Lessons Learned

The COVID health and economic crisis has helped us improve our operations in ways we hadn’t anticipated.

We improved communication channels. We strengthened our in-house electronic communications to keep everyone connected and up-to-date regarding the coronavirus pandemic and how it will impact our day to day and ongoing business operations. In the past, with everyone in one office, our open-door policy kept everyone in the loop. This wasn’t sufficient with everyone working from home, so we made it an ongoing policy to communicate regularly via email with our employees during the lockdown and ensure a high level of transparency.

We adapted to working virtually. We ensured each and every employee had the infrastructure and capability to work both in the office and at their homes. We also provided training where needed so employees could maximize remote productivity. As we consider the potential reoccurrence of COVID in late 2020, our team is now positioned to serve our clients from multiple work environments, without delay or interruption of services. 

We maximized environmental considerations. Working remotely, we have realized printing hard copies of multi-page documents may not be necessary.  We are working toward a progressively more paperless infrastructure, which should help improve the environment and also better manage the outflow of documents to FINRA and PCAOB auditors in the future.

We doubled down on discretion. Working from home around family members provided an extra reminder that client and employee communications require confidentiality and discretion. We have improved many of our communication methodologies to ensure privacy is maintained.

ACI will continue to provide updates on our Resources page as we manage together through this challenging time. We hope everyone is taking proactive and precautionary measures to remain safe as the economy continues to reopen.

SBA Provides More Guidance on How to Obtain Paycheck Protection Program Loan Forgiveness

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The government continues to address the concerns of small businesses who have borrowed money through the SBA-backed Paycheck Protection Program (PPP). New guidance released over the holiday weekend offered more clarity about the conditions for loan forgiveness, while the U.S. House of Representatives yesterday passed a bill to provide more flexibility for borrowers.

The guidance made clear that only those payroll costs incurred and paid during the covered period of the loan, or incurred and paid before the next payroll period, count toward the forgiveness conditions. Loan money used to pay prior period payrolls isn’t eligible. This is in contrast to non-payroll costs. The new guidance says that non-payroll costs incurred before the covered period but paid by PPP money during the covered period are eligible.

One particularly important clarification is that bonuses and hazard pay are eligible for loan forgiveness, so long as they don’t exceed the pro-rated amount of $100,000 annual salary. This is invaluable for many firms with employees earning less than $100,000 who are trying to maximize their benefit.  Giving 2020 bonuses early is a great way to achieve this. The firm benefits from the non-taxable loan forgiveness, while the employee benefits with an advance on their annual bonus.

More flexibility may come

The House bill gives PPP borrowers more discretion on how and when they spend the loan money while remaining eligible for loan forgiveness. The bill’s provisions would reduce the share of money that is required to be spent on payroll costs from 75 percent to 60 percent and would extend the period in which the businesses must use the funds from the original eight weeks, to six months. It also provides for a longer amount of time for borrowers to repay the loan, if necessary.

The bill now goes to the Senate for consideration. The Senate, which doesn’t meet again until next week, has been considering a similar bill, so we may see some agreement on these provisions sooner rather than later.

ACI working to maximize clients’ PPP benefits

ACI has been working with our clients to maximize the benefits of the PPP loans, and, more importantly, ensuring they meet the requirements. We are hopeful to formally complete all client SBA loan forgiveness forms by the end of July, enabling them to be free and clear of the PPP process.

More than 4.4 million loans, worth $510.5 billion, have been approved, leaving about $130 billion available for new borrowers. If you are considering applying for the PPP program, you still can do so. ACI is experienced in all facets of the process and ready to help you get through it with minimal stress. These are the program details:
 

Paycheck Protection Program loans explained  

The CARES Act’s Paycheck Protection Program (PPP) allows qualified businesses with fewer than 500 workers to apply for a Small Business Loan to meet payroll costs. The loan is limited to the lesser of $10 million or the company’s average total monthly “payroll costs” for the 1-year period ending on the date the loan is made, multiplied by 2.5, plus any refinanced loan under the Economic Injury Disaster Loans (EIDL) program obtained after June 30, 2020.

Proceeds from a PPP loan may be used for payroll costs (as defined), employee benefits, interest payments on mortgages, rent, utilities, and interest on debt incurred before February 15, 2020.

A business can apply for loan forgiveness in an amount equal to the cumulative amount of payroll costs, rent, utilities, and interest paid on mortgages during the eight weeks after the loan is made. The amount forgiven is limited to the extent compensation and headcount are reduced relative to a base period, and any amount forgiven will not be taxable to the borrower.

ACI will continue to provide updates on our Resources page as the economy continues to emerge from the shutdown. We hope everyone is taking proactive and precautionary measures to remain safe.