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Record tips or unapplied payments on an invoice

by Intuit•17• Updated 1 week 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.


Summary of steps

To record a tip or customer overpayment in QuickBooks Online:

  1. Create a Tips income account.
  2. Create a non-inventory item for tips.
  3. Add the tip as a line item on an invoice.
  4. Apply the customer’s credit or overpayment to that invoice.

Add an income account to track tips

  1. Go to All apps A bunch of numbers and letters on a tile wall., select Accounting, then select Chart of accounts (Take me there).
  2. Select New account.
  3. Name your account “Tips” and add a description.
  4. From the Account type â–Ľ dropdown, select Other Income.
  5. From the Detail type â–Ľ dropdown, select Income.
  6. (Optional) Make it a subaccount by selecting a parent account.
  7. Select Save.


Create a tip item

  1. Go to All apps A bunch of numbers and letters on a tile wall., select Sales & Get Paid, then select Products & services (Take me there).
  2. Select New product/service, then select Non-inventory item. 
  3. In the Name field, enter name such as "Tips"  
  4. For the Income account ▼ dropdown, select the newly-created "Tips" account. 
  5. Select Save and close.


Record the extra money as a tip or overpayment

  1. Go to All apps A bunch of numbers and letters on a tile wall., select Sales & Get Paid, then select Invoices (Take me there).
  2. Select Create invoice.
  3. Select a customer from the Add Customer ▼ dropdown. Or, to add a new customer, select + Add new, enter the customer info, and select Save.
  4. In the Products/services field, select the tip item you created. Also add other other required fields.
  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 select Save and close.

About unclaimed funds

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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