Apr 08, 2021
In our last manufacturing-focused blog, we explored the topic of the fourth industrial revolution known as Industry 4.0. This highly developed revolution focuses on the use of technology, automation, and digitization for operational efficiency. Many are now curious to know how this new phase of manufacturing was impacted by the disruption of the pandemic. With a vast shift from in-person work to a more remote setup, Industry 4.0 experienced a surge in the scaling of related technologies.
According to a survey by McKinsey, of their 400 respondents, 94% of respondents told noted that Industry 4.0 had helped them to keep their operations running during the crisis, and 56% percent said these technologies had been critical to their crisis responses. For those organizations who had already taken the leap to incorporate Industry 4.0 into their daily operations, the pandemic was a win situation. These early adopters were simply able to rely on their automation to overcome the loss of physical presence in their factories and at the same time utilize their real-time data analytics to assess their operations and make prompt adjustments.
For others, the pandemic was a wake-up call. Manufacturers who have yet to make the transition to Industry 4.0 were met with the stark reality of being unable to pivot during the disruption which left them negatively impacted. According to the McKinsey survey, 56% of respondents that hadn’t implemented Industry 4.0 technologies prior to COVID-19 found themselves constrained in their ability to respond to COVID-19 in the absence of digital technologies to support them.
While the pandemic made organizations realize the importance of Industry 4.0. It has also hindered progress. For some, the pandemic wreaked havoc on cash flow and talent creating a sort of catch-22. The need for automation and digitization is apparent, but without the capital to support the transition, manufacturers are stuck in a rock and a hard place.
So what is next? Manufacturers must first recognize the value-add of Industry 4.0 and commit to scaling their operations to include features of this forward-thinking revolution. Once committed, the next step is to develop a detailed plan. Given limited resources, having a strategic approach will ultimately maximize the benefits of smart technology without having to reprogram due to short-fixes. The biggest hurdle is making the decision to scale and take the first step. Whether it’s setting up your current system to pull data in an efficient manner for future data analytic software or focusing on best practices for remote working, committing to Industry 4.0 is the first step. Don’t make the mistake of discounting Industry 4.0, it could be deadly in a time of disruption. Organizations that learned from the pandemic, have embraced this new revolution, and can be nimble during uncertainty are those who will survive and thrive.
Apr 01, 2021
The Restaurant Revitalization Fund (RRF) which provides federal grants to the hardest hit sector of the economy during COVID-19 is about to become a reality. President Biden is expected to sign a $1.9 trillion relief package, the American Rescue Plan today. As part of this plan $28.6 billion has been allocated to small and mid-sized restaurants for The Restaurant Revitalization Fund.
What is this new program?
The Restaurant Revitalization Fund allows eligible businesses to receive grants equal to their pandemic-related revenue loss, with a maximum of $10 million per business entity, or $5 million per physical location. How much you receive depends on the revenue your business lost due to the pandemic and if it received a PPP loan.
Businesses that were established before January 1, 2019, can calculate their grant amount by subtracting your 2020 gross receipts from your 2019 gross receipts. Businesses that were established during 2019 can receive a grant equal to the difference between:
- Average monthly 2019 gross receipts, multiplied by 12
- Average monthly 2020 gross receipts, multiplied by 12
Businesses that were established on or after January 1, 2020, can receive a grant equal to eligible payroll expenses, minus gross receipts from that year.
Who is eligible?
Eligible businesses include any location where patrons gather for the purposes of being served food and beverages: restaurants, bars, caterers, lounges, inns, taverns, saloons, brew pups, taprooms, tasting rooms, food trucks, food carts, or food stands.
Who is not eligible?
- Restaurant chains that, together with affiliated businesses, own or operate more than 20 locations as of March 13, 2020
- Restaurants that have a pending application for or have received a grant for shuttered venue operations
- Publicly-traded companies, or
- State or local government-operated businesses.
What can the grant funds be used for?
- Payroll costs
- Rent payments (excluding pre-payments)
- Principal and interest payments on a mortgage (excluding pre-payments)
- Maintenance expenses including construction to accommodate outdoor seating and walls, floods, deck surfaces, furniture and fixtures, and equipment
- Supplies (including PPE)
- Food and beverage expenses
- Covered supplier costs
- Operational expenses
- Paid sick leave
- Any other expenses that the SBA deems essential to maintaining the eligible business
How and when can you apply for the grant?
Much like the Paycheck Protection Program, the Restaurant Revitalization Fund grants will be distributed by the Small Business Administration. Applications will be available on their website in the coming days. During the first 21 days of the fund launching, the SBA will give priority to restaurants owned and operated by veterans, women, or socially and economically disadvantaged individuals. If after 60 days, the funds have been exhausted, the SBA will have the discretion to administer grants to eligible businesses without regard to annual gross receipts.
During a Senate Small Business Committee hearing, senior SBA official Patrick Kelley confirmed the U.S. Small Business Administration (SBA) is targeting early April to launch a phased rollout of the $28.6 billion Restaurant Revitalization Fund (RRF). In addition, state restaurant associations have been meeting with Congressional leaders to learn more about details regarding applications, etc.
Key updates resulting from these meetings include:
- SBA will likely start posting relevant qualifications, instructions, and other information for restaurant operators over the next 7-10 days and give guidance on supporting documents needed to apply
- SBA will open applications in April
- SBA is currently planning the whole process will take place over the next 30-45 days
- SBA also confirmed applicants for the Fund program will not need to register for a DUNS number or on SAM.gov.
- The process is slow on account that the SBA has to build a technology platform from scratch with the capability of dealing with the crush of applications and likely automating the process so it’s as efficient as possible. Once it’s up and running, the grants will function like direct payments to the applicants. The SBA is also in talks with third-party POS vendors to discuss accessing relevant sales data needed for application processing
We will continue to provide updates as the SBA releases additional guidance. Please check back periodically as we will post updates here.
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Kristin Metzger, CPA
Restaurant Practice Leader
email@example.com | 419.891.1040
Mar 31, 2021
The PPP Extension Act of 2021 passed by Congress last Thursday has now been signed into law by President Biden. The PPP Extension Act of 2021 expands the Paycheck Protection Program (PPP) loan application due date two months from March 31, 2021, to May 31, 2021. With nearly 190,000 pending applications, the law provides small businesses and nonprofits 60 additional days to apply for the roughly $79 billion of funds remaining. This extension comes just two weeks after the American Rescue Plan (ARP) made several changes to the PPP, which we previously outlined here.
An additional provision of the Act allows the Small Business Administration (SBA) until June 30, 2021, to process lender applications.
Mar 29, 2021
The concept of remote working was quickly embraced last year as we witnessed states all across the nation implement lockdown orders as a result of the COVID-19 pandemic. Even here in Ohio, Governor DeWine instituted stay-at-home orders resulting in thousands of Ohio workers clocking in their 40-hour workweek from their home office. What was thought to be a several-month solution has now turned into over a year or more of remote working. The end result – a municipal income tax withholding dispute between the state, cities, and taxpayers.
Why the dispute?
During the government-imposed lockdown, Ohio lawmakers adopted a temporary law change allowing employers to keep withholding to the office location until 30 days after the Governor’s State of Emergency order ended. This was intended to relieve the burden on the employer of tracking withholdings for their employees throughout various cities and villages from which they were working remotely. Now, over a year later, some Ohio cities are interpreting the temporary law to mean municipalities can permanently retain those withholding dollars from workers who neither live nor work in their city.
What does this mean?
Several Ohio taxpayers have brought this debate to Ohio courts to determine the constitutionality of the temporary COVID-19 municipal income tax law. The court case was filed in July 2020 and is still in its early stages. (The Buckeye Institute v. City of Columbus Auditor, 20 CV 004301, Franklin County Common Pleas Court)
What should I do?
If you are an Ohio taxpayer who worked some or all of 2020 remotely, you should connect with your accounting advisor to determine if you should be filing City Non-resident Refund Claims (NRR). NRRs have always been available for individuals who have tax withheld by their employer for days they do not work in the city. Please note, if you are able to receive a refund of the tax withheld for your workplace city/village, you will likely owe that tax, or some portion of it to your residence community if that community has a tax.
Mar 24, 2021
This story was updated on 4/1/21 to reflect a potential change in SBA requirements for the Restaurant Revitalization Fund (RRF). Restaurants will not be required to acquire a System of Award Management (SAM) number nor a D-U-N-S number as previously thought.
In a previous post, we examined the Restaurant Revitalization Fund (RRF) under the American Rescue Plan and outlined the program details, eligibility, and the qualifying uses for the funds. With more than $20 billion available for restaurant businesses of different sizes, we anticipate a high demand for RRF grants.
As the restaurant industry patiently awaits further guidance from the Small Business Administration (SBA), there are steps restaurant owners can take now to best prepare for the opening of the fund. We encourage you to take action now by:
Gathering your paperwork – Finally, you should begin compiling your receipts and financial statements to show your 2019 and 2020 revenues.
Unfortunately, as of the date of this advisory, the SBA’s application process is not yet open. Nonetheless, we expect the application to be available on the SBA’s website, and, once available, applications will be submitted directly through the SBA. It is important to keep in mind not everyone who applies for an RRF grant will receive funds. Much like the first round of PPP, funds will go fast. We highly recommend you take the steps above to best position your restaurant. If you have questions or need help, we are here!
Connect With Us.
Kristin Metzger, CPA
Restaurant Practice Leader
firstname.lastname@example.org | 419.891.1040