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CPAs Mobilize to Save Small Clients, Protect Their Firms

April 10, 2020, 8:46 AM

Panicked, small-business owners started calling Drucker & Scaccetti’s public accounting offices in Philadelphia nonstop last week.

Owners didn’t want to miss a chance to borrow some much-needed cash to cover rent and payroll for the next eight weeks—especially if the low-interest loan eventually would be repaid by the federal government. But they had questions, and little guidance to help them in their urgent rush to start submitting applications for the Payroll Protection Program, $349 billion in small business loans created in the latest virus relief package (Public Law 116-136).

“It’s so complicated and such a mess,” said Daniel Marques, a tax accountant with Drucker & Scaccetti P.C.

Business owners need help understanding their options, navigating loan officers at the local bank, calculating their payroll, even quelling their fears that they’ll miss out and risk losing their business. CPA firms like Drucker & Scaccetti are on the front lines of that effort, racing to save millions of American small businesses.

And they are stepping up, Marques said, even though the Small Business Administration program doesn’t directly involve taxes and the loans can’t be used to pay his fees.

Fight for Survival

The vast majority of CPA firms are small businesses too, and their own future depends heavily on the financial health of their client base. Right now, small businesses in survival mode are turning to their accountants to make critical decisions, said Erik Asgeirsson, president and CEO of, the technology arm of the American Institute of CPAs.

The AICPA last week called on all 44,000 public accounting firms in the U.S. to support their clients as they seek the much-needed cash relief—a life line Congress provided in the legislation known as the CARES Act. The organization has worked with banks and paycheck-processing companies to ensure consistency in the loan applications over important details, like how to calculate the payroll and the time-frame the calculation should cover.

CPAs can offer trusted guidance, help clients apply for the relief, and make sure that the loan will qualify to be forgiven, Asgeirsson said.

The needs are urgent. According to the JPMorgan Chase Institute, about half of all small businesses have a cash safety net worth less than 15 days. A survey of small businesses found that a quarter have seen revenue dry up due to the outbreak, according to the group Businesses for Responsible Tax Reform.

Anne Zimmerman, a Cincinnati-based CPA and co-chair of the tax reform group, said her six-person firm will continuing working with clients even though some of them can no longer afford their services. Her clients are like family, she said, and she won’t turn away from them.

“For smaller firms like ours, if we don’t continue to help our clients through, whether or not they’re going to be able to afford to pay us, we’re not going to have any clients when we’re done,” Zimmerman said. “How do you say ‘No, sorry you can’t afford me.’ You’re going to help them.”

Accounting Not Immune

Like its clients, Postlethwaite & Netterville APAC isn’t immune to the downturn in the economy and the firm is keeping a close eye on its own cash flows, said Brandon Lagarde, a Baton Rouge, La. tax attorney, who runs the firm’s tax services group.

The firm works with restaurants and other businesses in New Orleans’s normally vibrant hospitality industry, now hobbled by travel restrictions intended to slow the spread of the virus. Thanks to Hurricane Katrina, the region’s business owners are familiar with SBA loan programs. The agency approved nearly $10 billion in aid to businesses and residents impacted by a trio of Gulf Coast hurricanes in 2005. q

“The Katrina recovery, I mean it took probably a year to really get off the ground, and now you’re talking about trying to get something like this off in a week,” Lagarde said. “It’s just very frustrating.”

But owners aren’t waiting for guidance or clarifications from the SBA, Lagarde said; they need to apply now or they risk running out of money.

He’s focused on how businesses are preparing for the inevitable red tape that could dash hopes of the government covering the full amount of the loan.

No one wants a big old loan on the balance sheet after it’s said and done, not if they can help it,” he said. “It’s really trying to help people make sure they are not borrowing too much because maybe not all of it will be forgiven.”

Companies that receive the CARES loan will need to track the money with separate bank accounts and ledgers. They must decide carefully how they spend the money, he said.

Zimmerman has given her clients in Ohio similar advice.

“Get what you think you deserve, but don’t go spend it all,” she said. “You need to hold onto this money to use for only dire things that you really need to keep your business going.”

In the meantime, Zimmerman is bracing for her own revenue decline in the coming months. She, like her clients, would be eligible for the paycheck loan coverage.

But for now, she says, her team is busier than ever, helping clients to hold on just a little longer.

To contact the reporter on this story: Amanda Iacone in Washington at

To contact the editors responsible for this story: Jeff Harrington at; Colleen Murphy at