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Record tips or unapplied payments on an invoice in QuickBooks Online

by Intuit• 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.

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

Go to Settings ⚙ and select Chart of accounts (Take me there).
Select New.
Name your account “Tip Revenue” and add a description.
For Account Type, select Other Income.
For Detail Type, select Other Miscellaneous Income.
You can choose to make this a subaccount. If so, select it from the list.
Select Save.

Step 2: Create a tip item

Go to Settings ⚙ and select Products and services (Take me there).
Select New, then select Non-inventory item.
Enter a Name, like "Tips."
For Income account, select the newly-created “Tips Revenue” account.
Select Save and close.

Record the extra money as a tip or overpayment

Go to Sales and select Invoices (Take me there).
Select Create invoice.
Enter the Customer.
In the Products/Services field, select the tip item you created.
Select Save.
Select Receive payment.
Select the credit and then Save and close.

If your customer paid you too much in error, you should contact them and arrange for a refund.

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