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Record tips or unapplied payments on an invoice

by Intuit•86• Updated 5 days 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.

Note: If you have a QuickBooks Payments subscription, you can turn on tips for your customer invoices.

An icon showing cash and a payment card If you'd like to make it easy for your customers to pay an invoice online, check out QuickBooks Payments rates and apply.

For a better experience, open this article in QuickBooks Online. Launch side-by-side view Open this link in a new window.

Prerequisites

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

  1. Go to Settings ⚙ and select Chart of accounts (Take me there).
  2. Select New. Depending on your account view, you’ll either see a panel labeled New account or New category. 
  3. Name your account “Tips” and record a description.
  4. For Account type or Category, select Other Income.
  5. For Detail type, select Other Miscellaneous Income. 
  6. You can choose to make this a subaccount. If so, select it from the list.
  7. Select Save.

Note: If you see the New category panel, you’re creating a subaccount under a premade parent account. If you need to create a new account type, switch to the accountant view.

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

Record the extra money as a tip or overpayment

  1. Go to Sales, then select Invoices (Take me there).
  2. Select Create invoice.
  3. Enter the Customer. 
  4. In the Products/Services field, select the tip item you have 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.

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

Related links

QuickBooks Online AdvancedQuickBooks Online EssentialsQuickBooks Online PlusQuickBooks Online Simple Start

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