Bookkeeping Cleanup

To resolve the historical mismatch, you'll need to unlink the incorrect transactions from your bank feed and identify the correct payment details using your actual bank statements. After that, utilize a dedicated "Tips" non-inventory item to add the additional funds directly to the invoices. This will help ensure that your sales tax and income records remain accurate.

Here's how:

1. Retrieve last year's official bank statements from your financial institution to get a clear overview of when and how much money was actually deposited.
2. Go to your Bank Transactions page, look at the Categorized or Reviewed tab, and click Undo on the wrong deposits to send them back to your review list.
3. Go to your Chart of Accounts and create a new account. Name it "Tips," change the Account Type to Other Income, and set the Detail Type to Other Miscellaneous Income.
4. Go to your Products and Services list and create a new Non-inventory item named "Tips." Link its Income account field to your newly-created "Tips" account.
5. Open each original invoice, add a line at the bottom for your Tips item, and type in the tip amount so the new invoice total matches your bank statement.
6. Click Receive Payment on the invoice, change the Deposit to box to Undeposited Funds, and use the payment date from your bank statement.
7. Click the + New button, choose Bank Deposit, and check the box next to the payment. Save it, and it will now perfectly match the green line in your bank feed.

For guidelines on recording tips and managing customer overpayments on invoices, please refer to this article: Record tips or unapplied payments on an invoice.

Explore Intuit Expert Assisted for deeper insights into your financials. You will receive personalized, one-on-one advice tailored to meet the specific needs of your business and its reports. I also recommend consulting your accountant for personalized guidance.

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