COVID-19 Expenses: Have You Been Documenting Them?
Most businesses have a lot on their plate right now because of COVID-19. We have all had to change the way we work in an unbelievably quick time frame. In all the hubbub, it can be easy to forget about financials and proper documentation. But now, more than ever, it’s important for businesses to be tracking any and all expenses related to COVID-19. We’ll tell you what to include, and why it’s important to start documenting these expenses now.
Before we move on to the blog, we wanted to give a special mention to Ron Lovett, who promoted this idea from a friend of his at the Bank of Montreal. His video inspired us to share our perspective on the matter.
What should you be documenting right now?
Anything that could be considered an expense related to COVID-19 should be tracked in your financials. Supplies, software, and time can all be reflected in this documentation. Here’s a list of some of the most common items you may want to consider including?
- Downtime: The time you are paying your employees for, but are unable to work because they need to be onsite to do their jobs
- Training time: Anything you need for training to get people up and running on new technologies or ways of working
- Payroll: Changes in payroll that are a reflection of COVID-19
- Extra cleaning expenses
- Marketing expenses: Anything you are using to put the word out about changes to your business. You could include signage, mailings, time/cost of email marketing, website updates, etc.
- Any other time you or employees are spending on dealing with COVID-19 matters and not usual business matters
- Health care costs for employees who may require medical attention as a result of the virus
- Technology costs: Server expansions, software, licensing, or new hardware needed to accommodate remote work that you wouldn’t have purchased otherwise
Why is it important to document your COVID-19 expenses?
We are already seeing the big effect COVID-19 is having on many businesses. It’s always better to track while it’s happening so you can look back and see what activity the disruption caused. Eventually, when tax time comes around next year, any additional deductibility or support available for COVID-19 interrupting business practices will already be documented, and deductions will be easy to implement. If you are diligent about tracking and identifying your expenses up front, it’s much easier than looking back at the year and trying to remember what should be included and what shouldn’t. Do this while your memory is fresh.
Have any questions about what we recommend? Contact us today!