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Level 1

Recording income without invoice

My employees are considered independent contractors and their pay is heavily tip based. All tips though go through our payment processors how would I record these daily deposits as income?


Would I need to create an invoice for each payment daily? Or can I just record it as a sale? 

6 Comments 6
QuickBooks Team

Recording income without invoice

Hi there, @Roxismcha.


Welcome to the Community. Allow me to share some insights about recording an income without invoice in QuickBooks Online.


You can use the sales receipts if you receive full payment at the time of the sale. This includes payments by cash to be recorded on your income account.


Just click on the Plus Sign (+) and choose Sales Receipt, which will record the payment. Once done, you can use the Bank Deposit function to increase your income account. 


To record a bank deposit:

  1. Click on Plus menu (+) and choose Bank Deposit
  2. Choose the bank account to which you wish to deposit funds.
  3. Select the transaction you want to deposit in the Select Existing Payments section.
  4. In the Add new deposits table, add any additional items to include in the deposit. 
  5. Click on Save and Close or Save and new.

For more details about this process, please refer to this article: Create Sales Receipts in QuickBooks. 


These steps should guide you with recording your income.


Please let me know if I can be of additional assistance. I'll be around to help you out. Wishing you and your business continued success.

Not applicable

Recording income without invoice

Need more detail for this one - if the employees are 'independent' then does the entire payment belong to them - or to the business - or is it mixed.
If the staff are truly independent and keep their tips, then tips should not be included in business income or business expense.
Level 1

Recording income without invoice

I would like to understand how to take deposits for a project without using invoices.

QuickBooks Team

Recording income without invoice

There are two ways to record deposits without using invoices, jercarr.


We can use a sales receipt if you want to associate it to a product or service item. From the +New button, click Sales receipt and select the project in the Customer drop-down. Enter all required details and make sure to select the bank in the Deposit to drop-down where you want to deposit it.


Another option is to create a bank deposit transaction. This is how to do it:

  1. Go to +New button, select Bank Deposit. In the Account field, select the deposit to account.
  2. From the Add funds to this deposit section, select the project in the Received From field. Then, choose an income account.
  3. Enter an amount, then select Save and close.

You'll want to read this guide to use the Projects feature.


We'll be right here if you need more assistance with this. Have a great day!

Level 1

Recording income without invoice

You’re not answering the question


if the business receives their independent contractors tips through their payment processor how do you show it wasn’t business income?

QuickBooks Team

Recording income without invoice

Hi there, Moving2019.


Thank you for visiting the QuickBooks Community. I'll be providing details on how Tips works in QuickBooks Online. Then, ensure that you can set up this kind of entry as another account.


You can record and add a tip or gratuity to QuickBooks Online without the effort of manually setting them up. You can distribute or keep these tips or gratuities with your employees/team. However, you have the option to choose Just me in the settings and this will be counted as income but you can edit the account if necessary. I recommend consulting an accountant before performing the process to ensure your records are in shipshape. They can provide suggestions on how to properly handle the tips transactions, especially with the account to use for these entries.


To start with, you'll have to turn on the tip-tracking feature on the Account and settings page. 


Here's how:


  1. Select the Gear icon at the top.
  2. Choose Account and Settings under Your Company.
  3. From the left menu, select Sales.
  4. Select the pencil icon on the Sales form content section.
  5. Turn on the Tips (Gratuity) radio button.
  6. You'll be prompted with Who's receiving these tips? select the Just me button. Then, click Save.


Once done, go to the Advanced tab and choose Chart of accounts section. Then, click the pencil icon and choose the appropriate account in the Tips account drop-down arrow. Once everything is set up correctly, you can now click Save and Done.


After that, you may click this article to see further details and how you can start recording the tip in the system: Share tips with your team.


Lastly, you may refer to this article to view various details on why accounts in QuickBooks are important to set up correctly in the system: Learn about the chart of accounts in QuickBooks Online.


You can always get back to me whenever you have other questions about recording transactions in QBO. I'm always here to help.

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