RECONCILE TIPS IN QBO
Setup the Gratuity Account
Before we reconcile any amounts, we need to make sure there is a place for your tips to go. A tips account should be entered as a current liability. If you don’t have one already, go to your Chart of Accounts and create an account called “Gratuity” or “Tips” and select “Other current liabilities”.
Clear the customer credit
When payments come into QBO from HouseCall, you’ll see an amount that is larger than the invoice. QBO assumes this is a credit due to the customer. We’ll need to account for this credit by creating a journal entry that moves the credit to our Gratuity account.
To do a Journal Entry, select the “+” icon in the top right of the screen and select “journal entry”.
- Set the date as the same date as the payment you received (in our example, it’s 4/7/2017).
- For the first account, select “Accounts Receivable”.
- Debit the amount of the tip and add a description.
- Make sure you have the name of the customer in the Name field.
- For the second account, select your gratuity account.
- Credit the same amount to balance the journal entry.
- Add a description
- No need for a Name on this line.
- Save and Close
Now we are going to use the built in function of QBO to clear the credit from the customer.
- Select the “+” icon in the top right of the screen and select “Receive Payment”.
- Select the name of your customer.
- Make sure your payment date is the same as your journal entry (4/7/2017 in our example).
- It should automatically select Undeposited Funds for “deposit to:”.
- Make sure the Amount Received at the top is zero (we are not actually receiving any new money).
- Under Outstanding Transaction, select your journal entry if it is unselected. Place the amount of the tip in the Payment box.
- Under credits, select the unapplied payment (the credit we are trying to move). If the Payment box is unfilled, put in the amount of the tip.
- Select save and close.
Now when you go to Transactions > Banking, you should see a matched deposit.