Can you deposit a tip that a customer pays on an invoice

Thanks for dropping by the Community today, MM0717.

Yes, you can add the tip and deposit it together with the invoice payment. The steps are easy to follow, and I’m here to help you do this in QuickBooks Online (QBO).

1. Tap the New menu in the upper-right and choose Bank deposit under Other.
2. From the Account drop-down, pick the bank you wish to record the transactions.
3. Tick the box for the payment and navigate to the Add funds to this deposit section.
4. Pick the customer’s name from the Received From drop-down.
5. Then enter Other current liabilities in the Account field.
6. Fill in the remaining fields including the tip amount.
7. Press Save and close.

Aside from depositing the tip, you can include it as an item to the invoice. QBO will automatically create the account once you turn on the Tips feature.

After activating it, let’s associate the account to the tip item. Here’s how:

1. Press the Sales menu on the left panel and select Products and Services.
2. Click the New button and choose Service or Non-inventory as the item type.
3. Key in the tip details and go to the Sales information section.
4. Enter Undistributed Tips in the Income account field.
5. Remove the checkmark in the Is taxable box.
6. Tap the Save and close button.

Once done, use the newly added item when you create an invoice. For more details about tips and gratuities, check the following article: Share tips with your team. It will guide you on how to add the item to your sales receipts, and employee’s check.

Don’t hesitate to add a comment below if you have other questions about handling tips. I’m more than happy to answer them for you. Have a great rest of your day.