How to deal with receiving business gratuity and tips vs invoiced amount (edit)
I've started to actually use the business portion of my Quicken product and began using the invoicing to keep track of things even though I don't actually use the physical invoice. For some of my work, I get paid through a 3rd party (TaskRabbit). Those who hire me have the option of giving a tip. How can I account for this when I have my invoice for just the billed amount and the corresponding deposit is for more than the invoice? Doing nothing shows a negative balance in my AR account.
Answers
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An example, I invoice 3 hours at $30 hr for $90 and enter it into Quicken. Then about a week later the payment comes through and there is a tip so the deposit into the account is say $95. When I do a payment entry, I put in the $95 so it matches with the deposit correctly. Doing so the AR account shows ($5.00). Then as invoices are entered and paid with other tips that negative amount grows and I cannot figure out what I should do.
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(repeated message whoops)
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Since you don't actually send out invoices to your customers, how about this:
- If you don't have one yet, create a business Income Category for "Gratuity, Tips" with an appropriate Schedule C tax line item
- Create an Invoice Line Item "Tips", categorized to the above income category
- When you receive payment notice, add a 2nd item line to each customer invoice, "Tips" with the tip amount, e.g., $5.00
- Now you can record the New Customer Payment transaction for the full amount plus tips
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OOooo that can work so when I get the payment with a tip, I can first adjust the invoice to include it with whatever it is then the payment will be all matched up and the AR account will be happy. Helpful workaround for sure!
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