I mailed an invoice to a customer for $255. The customer sent a check back for $295 which included a $40 tip for the employees who serviced the customer. When I receive the payment, I have $40 left over. How do I account for this $40?
Thanks in advance for any assistance.
You could set up both an account and an item "tips for employees". Either add the $40 item to the first invoice or create a second invoice for the customer for the tip alone. Use the "extra" $40 to "pay" the invoice. Then cut a check for the employee and charge it to the "tips for employee" account. As long as you pay out the $40 there will be no impact on your income and no tax effects.
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