If your company receives tips from customers, these need to be accounted for in your books accordingly. Although this creates additional steps for your bookkeeping process, it’s something that needs to be done to protect yourself and the business and create a paper trail for all.
To accurately record tips in QuickBooks, you first need to create a Gratuity/Tips Liability Account. Why? This is because the tip money belongs to the employee, so it is a liability to you, as the business, until they receive their tip payment. This liability account should be used to just track tips. If you have multiple employees that receive tips, you may find it beneficial to break down each item by each employee’s name and their tip amount.
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Are you categorizing your transactions in QuickBooks? This will provide a detailed look at where money is coming and going. As a business owner, it’s vital to know which areas of your business are bringing in money and which are draining it. Categorizing transactions will provide detailed insight on your finances. With categorization, expense reports will be easier to read and more useful in strategizing for the future. Categorization can help you maximize your business’ profitability and provide valuable insight on where you can cut costs.
To categorize transactions in QuickBooks Online, first you need to sync your bank account(s) and credit card(s) to your QB account for automatic entry, categorization, and matching. QuickBooks typically downloads new and avai
QuickBooks allows its users to set up automatic entries so you never have to manually enter debits and credits unless you choose to do so. However, sometimes it’s necessary to manually add a journal entry, like when you’re transferring money from one account to another. QuickBooks Online makes the process a breeze. See below for step-by-step instructions on adding, deleting, and editing journal entries.
Select “New+” and then choose “Journal Entry.” First, select the Account you need to debit or credit, and then enter the necessary amount in the correct column. Below that, you’ll select the second Account you’ll be moving money to or from, and you’ll enter the exact same amount.