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Sep 25, 2023 4:35 PM UTC
Question

Not Enough Cash for Tips

I currently have a customer who has to withdrawal cash from their bank in order to cover daily tips for their employees. What should I be coding these transactions as?

1 reply

BigRedConsulting
Sep 25, 2023 4:49 PM UTC

When recording the withdrawal, probably record it as a transfer to a petty cash 'bank' or asset account.

 

Then, from petty cash, itemize the payouts to each employee using the same Asset (?) account used on the Tips out payroll item, you'll set up and then use on the paychecks if using QuickBooks Payroll. (I think it's an asset as the employees sort of owe the company the money until it is taken from their paychecks later as the tips are recorded.)