I'm struggling to recall a time I've felt this much uncertainty about the future. Over the last several weeks, I've fluctuated between crowding out the outside world and frantically googling answers to the questions that no one can answer.

It's one thing to have to sit with the uncertainty concerning life's big questions. But it's entirely frustrating to have to this uncertainty when it comes to questions that should have clear answers. Questions like: can individual Americans expect additional support from the government, or is that solely reserved for corporations? And, what are the rules for loan forgiveness under the Paycheck Protection Program? And, will these rules change in a few days or a few weeks?

Small businesses that can access funding through the new Paycheck Protection Program (PPP) and the expanded Economic Injury Disaster Loan will feel like a lifeline for all the companies whose revenues are down and whose futures are uncertain. But with that lifeline and injection of cash comes the responsibility of navigating the intersection of tax laws, accounting, bookkeeping, and the new CARES Act. 

While I don't have all the answers to how the various entities will audit or keep track of how each business utilizes funding, I am a big dork in managing and organizing money. 

So even as we're watching the laws continuously change, the best we can do is manage the few things within on control:

• Keep up with the laws via your accountant, small business attorney, and bookkeepers. This means keeping the lines of communication open and leaning on the professionals in your life in a time like this.

• Be discerning about how you spend loan and grant money and keep meticulous records of it.

In this article, I'm going to walk you through how you can keep track of how your business spends its EIDL money. Please note, the following is for the loan amount only, not the grant advance.

The method I outline below might be more involved than what you might expect or what you're used to when managing an influx of funding. The idea is to treat the EIDL funds like a line of credit. A line of credit is kind of like a credit card, but instead of using a credit card to make a charge, a line of credit is actual cash that gets deposited into your account. Using the EIDL money like a line of credit will ensure that you use the funds according to the terms: to support day-to-day business expenses. If your business also received PPP funds, this method will help you stay organized with how each funding source gets spent and accounted for.

Step 1: Open a new checking account for your EIDL funds*

Be mindful of checking account fees. Each bank or credit union will have a different fee schedule.

Step 2: Put the EIDL proceeds into the new checking account.

Don't put more or less; put the exact amount you received as a loan in the new checking account. Again, since the grant advance is a grant and is not part of the loan, you don’t have to account for it the way you will need to account for the loan portion that needs to be repaid.

Step 3: Pick a method for how you'll use the funds 

Option 1: You can pay for day-to-day business expenses directly from the EIDL checking account.

You'll have to change autopayments and connect this new checking account to your various vendors.

Option 2: Alternatively, you can continue to pay for day-to-day business expenditures in the same way you had been before you received the EIDL loan.

For example, your business might have used a credit card or a checking account or both. You can keep using those accounts, and you can transfer the funds from the EIDL checking to the accounts you use to pay day-to-day business expenses. 

If this sounds tiresome and very involved, you can also batch the transfers, which is the next option.

Option 3: Batch the transfers. This means you’ll make one transfer for an amount that includes many transactions.

If you batch your transfers, it's imperative that you are keeping track of those expenses via regular, consistent bookkeeping. Without clean accounting, it'll be hard to see exactly how the funds were spent, which is the exact thing you want to avoid.

Step 4: I already said it, but it's worth mentioning again: keep excellent bookkeeping records

Whether you have been doing your business' bookkeeping or a bookkeeper handles it on your behalf, managing your EIDL money will require you to be more involved than you had previously been. If you are batching your transfers, excellent bookkeeping will keep your records easy to reference.

Step 5: Keep your receipts, invoices and other proof of payments

Yeah, you should always keep invoices, receipts, or other proof of payments for your business. Why? If you ever have the misfortune of being audited, you'll want to have as much evidence that your business expenses were legit. Itemized receipts, invoices, or other proof of payments like email confirmations that outline the details are the best way to prove how you spend the money.

There are various ways you can keep your receipts. Here's the method that I use after I failed at keeping my own receipts for many years.

For your EIDL money, it's still unclear how the Small Business Administration will handle auditing small businesses or if it'll be an honor system. What is clear is the steep penalty for misusing the funds. As of this writing, the penalty for misusing EIDL funds is immediate repayment at one and a half times the original amount of the loan. Ouch.

Do the best with the information we have

A separate account and accurate bookkeeping will not only be a good way for your business to have a trail of breadcrumbs that will show how the money got spent, but a separate account might prevent you from spending the funds inappropriately altogether. A different account eliminates the costly confusion of misspending money. This is especially important if your business is still earning revenue.