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krystina
Level 1

How do you enter and categorize a tip for an external person/vendor?

For example, I would like to know the steps on how to enter and categorize a tip for a delivery driver in QB. He's external, and not an employee, so is this an expense or a liability? I have (undeposited) cash that I use for giving change at an events. Upon delivery, I tipped a driver using these funds. Please help me categorize this expense appropriately so I can keep track of this tip, and future tips going forward. Thank you!
2 Comments 2
Rustler
Level 15

How do you enter and categorize a tip for an external person/vendor?

create an expense account in the chart of accounts called tips paid

use that account as the expense for the payment made

Candice C
QuickBooks Team

How do you enter and categorize a tip for an external person/vendor?

Good morning, @krystina

 

I've got you covered. I can give you some insight into categorizing a tip for an external person/vendor. 

 

@Rustlerdoes have some very good information that can help you decide what might be more accurate. However, I do recommend consulting with your accountant to be sure. They'll be able to give you the best accounting advice for your business. If you don't have an accountant, check out this link to find one near you. 

 

In addition, here's a guide that could be beneficial for you: Share tips.

 

Let me know how it goes and if you get a definite answer from your accountant. Being able to categorize this correctly will ensure that your books are accurate. Should you need any further assistance, don't hesitate to ask. The Community is always here to have your back!

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