How should I handle gratuities in 17hats?
Local laws may require you to report gratuity as income. 17hats can help you to manage this information. To do so, create a new invoice to account for gratuity.
Note: Under "Income Category", select "Uncategorized Income".
Save the item, and save the invoice. Click on "Record payment" and report your payment details.
What to do if you receive a payment which includes the remaining balance and gratuity?
Invoices must end in a $0.00 balance due state. Otherwise, your accounting will get hairy.
Follow along in the situation below for an example of how to report a gratuity.
- Let's suppose you have a balance due of $500.
2. Logically, if you receive a check of $750, your instinct would be to record a payment of $750. However this would put your invoice in a state of overpayment.
3. This invoice has been overpaid by $250, and this will lead to complicated accounting.
4. If you have already done this and need to reverse it, apply a negative payment as shown below.
5. The invoice balance will be $0.00 and then all is good again!
6. Now, create a separate invoice for the gratuity, using the remaining balance of the payment as an invoice item. This will keep your bookkeeping and accounting as simple as possible.
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