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Record tips or unapplied payments on an invoice in QuickBooks Online

by Intuit12 Updated 2 weeks ago

Learn how to turn a customer overpayment or credit into a tip in QuickBooks Online.

When a customer overpays an invoice to give you a tip, you need to record the income. Here’s how.

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Prerequisites

Before you can record tips, you’ll need to add an appropriate income account and an item to represent tips.


Step 1: Add an income account to track tips

  1. Go to Settings ⚙ and select Chart of accounts.
  2. Select New.
  3. Name your account “Tip Revenue” and add a description.
  4. For Account Type, select Other Income.
  5. For Detail Type, select Income.


Step 2: Create a tip item

  1. Go to Settings ⚙ and select Products and services (Take me there).
  2. Select New, then select Non-inventory.
  3. Enter a Name, like "Tips."
  4. For Income account, select the account you created in Step 1.
  5. Select Save and close.


Record the extra money as a tip or overpayment

  1. Go to Sales and select Invoices (Take me there).
  2. Select Create invoice.
  3. Enter the Customer.
  4. In the Products/Services field, select the tip item you created.
  5. Select Save. If your credits are set up to apply automatically, you're done. Otherwise, select Receive payment.
  6. Select the credit and then Save and close.

Provincial laws vary on unclaimed funds. If your customer paid you too much in error, you should contact them and arrange for a refund.

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