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I'm trying to find out how to zero out the Undistributed Tips account. This year I started collecting credit card tips via Square and I have been manually entering them to the employee's payroll checks using the Payroll Tips field I enabled in Settings. The problem is I later entered all of the Square deposits and did a split transaction to send the sales amount to my sales account and tips to the Undistributed Tips account. The balance now has $8k in it and has already been paid to the employees. I figured I could do a journal entry to zero it out, but I don't know where I should credit it. I don't want to alter my payroll numbers for year end reporting by accidently crediting it to the wrong place.
Hello, ryu2078. I'll guide you on removing the tips from the deposit and paying out the undistributed tips to zero out.
To remove tips from the deposit and payout undistributed tips, you'll need to follow a few steps. When you create a Journal entry, under the first line, select Undistributed Tips, then put the amount you paid out to employees in the Debits. This will deduct the amount from your deposit and add it to your payout.
Create a journal entry:
For a more detailed process, refer to this article: Share tips with your team.
It's essential to note that removing tips from your deposit may impact your tax calculations. Therefore, it's always best to consult with your accountant or bookkeeper before making any changes to your Journal entry.
Let me know if you have any further questions or need more detailed guidance on this process. I'm just one post away. Have a great day!
I've already processed all of the deposits for the year from the bank feed by splitting it between Sales, Tips, and Fees so if I credit Undeposited Funds won't it be stuck there next? I fixed the settings so Payroll Tips will automatically deduct from Square Tips moving forward (I renamed the Undistributed Tips account), but in the mean time I need to zero out the account. If I put it in Undeposited Funds it will be waiting there for me to process as a deposit which I don't want to do.
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