Coalition Urges Expedited Small Business Funding Via Payroll Processors
The following news release was issued today by the AICPA, representing a coalition of industry leaders including Paychex. They joined together to advocate for expedited relief funding for the country's small businesses as a result of the COVID-19 virus.
AICPA, Paychex, Intuit and IFA Say Speedy Relief Required to Prevent Layoffs Due to Pandemic
WASHINGTON, D.C. (March 22, 2020) – A coalition made up of the American Institute of CPAs (AICPA), the International Franchise Association (IFA) and two leading payroll processing companies, Paychex and Intuit, issued the following open letter to President Donald J. Trump, U.S. Treasury Secretary Steven Mnuchin, Small Business Administrator Jovita Carranza and members of Congress:
Our nation is taking unprecedented steps to address the current coronavirus pandemic, keep our citizens safe and American workers on the job. Broad governmental proposals for bank loans and direct loans are good steps, and fast action is required. We need to quickly take an additional step to ensure small businesses continue to keep their employees paid.
Small businesses are the heart of the American economy and employ roughly 60 million people. We know the impact that layoffs have on workers’ lives and business operations, so it’s critical we keep as many people on the payroll as possible.
The problem: It takes time to create new processes to distribute funds to small businesses – speed is of the essence here. An efficient and effective process would be to leverage established small business payroll processing that is already in place and can be marshalled immediately to protect jobs and preserve resiliency within the small business sector.
Payroll processors produce approximately 40 percent of all payroll payments in the United States, and their customers are mostly small businesses of 500 employees or less. We urge the federal government to use these existing systems to direct funds to small businesses so they can make payroll and not shut down due to restrictions caused by the pandemic. In this scenario, the federal government could set up a central payroll funding account that small business payroll processors could utilize so that millions of small businesses could continue paying workers during this time of crisis.
This direct funding of payroll accounts will not solve all the funding problems currently facing small businesses, but it’s a step in the right direction and has numerous benefits. It is a faster and more efficient process that does not require small businesses to get loans, and it ensures employees directly receive money. In addition, small businesses that use this federal funding facility would be required to maintain their workforce, which would dramatically reduce layoffs.
We believe multiple initiatives and tools are required to keep small businesses in operation. The direct payments and loans to small businesses will play an important role, but we recognize these will take weeks to implement. We are also convinced that proposed direct payments to individuals will not prevent small businesses from laying off employees. Small businesses need to make payroll now – the clock is ticking.
As the federal government focuses its attention on America’s economic engine – small businesses and their millions of employees – direct funding of their payroll can help. The payroll processing companies and the 45,000-plus CPA firms in America have long been partners in helping small businesses thrive in good times, and we have a role to play in the grave challenges we face today.
The program would not cover all small business employees, such as gig-economy workers, who would need to be supported through other measures. But we have the expertise and systems in place to help a significant part of the small business sector and its employees, many of whom are hourly workers who are most in need.
We want to help the federal government move quickly and aggressively, as we know that many employees who are laid off will not be rehired immediately. Small businesses will wind down operations, and it will be difficult to cycle back up. The pandemic will pass, but the economic impact will last. Ensuring we can rebound quickly is essential for the long-term health of our economy.
Sincerely,
Barry C. Melancon, CPA, CGMA
President and CEO
AICPA
Martin Mucci
President and CEO
Paychex
Sasan Goodarzi
CEO
Intuit
Robert Cresanti
President and CEO
International Franchise Association
About the American Institute of CPAs
The American Institute of CPAs (AICPA) is the world’s largest member association representing the CPA profession, with more than 429,000 members in the United States and worldwide, and a history of serving the public interest since 1887. AICPA members represent many areas of practice, including business and industry, public practice, government, education and consulting. The AICPA sets ethical standards for its members and U.S. auditing standards for private companies, nonprofit organizations, federal, state and local governments. It develops and grades the Uniform CPA Examination, offers specialized credentials, builds the pipeline of future talent and drives professional competency development to advance the vitality, relevance and quality of the profession.
About the Association of International Certified Professional Accountants|
The Association of International Certified Professional Accountants (the Association) is the most influential body of professional accountants, combining the strengths of the American Institute of CPAs (AICPA) and The Chartered Institute of Management Accountants (CIMA) to power opportunity, trust and prosperity for people, businesses and economies worldwide. It represents 657,000 members and students across 179 countries and territories in public and management accounting and advocates for the public interest and business sustainability on current and emerging issues. With broad reach, rigor and resources, the Association advances the reputation, employability and quality of CPAs, CGMAs and accounting and finance professionals globally.