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L
LB72
August 30, 2022
Question

Tips entered incorrectly on payroll for Restaurant

  • August 30, 2022
  • 2 replies
  • 0 views

Hello!

 

Here are the problems:

1. A restaurant has been running QBO payroll with tips being added to gross and then deducted with "paycheck tips" connected to a "tips paid" liability account instead of just using "cash tips." In doing that, it creates a positive liability account in the amount of tips paid.

 

2. All bank deposits from credit card machine have been categorized as sales income, which we all know is incorrect because SOME amount is tips collected and SOME amount should go to a sales tax payable account (not concerned with at the moment let's focus in the tips portion, I know how to fix the sales tax bit). I can do a JE debiting the sales account... and generally I would say credit a tips current asset account, but for the previously mentioned paycheck problem. 

 

So how do I debit the liability account to zero while also debiting the sales account by the tips amount. I know how it's SUPPOSED to work and will work from now on, but how do I FIX the historical inaccuracies. 

 

I will take a JE to fix the past, OR if there is a way to change all the past checks (which are not editable because forms have been filed) in order to get rid of the liability I would enjoy that option as well.

 

TIA.

2 replies

R
rvrfrf
August 30, 2022

Thanks for becoming part of the Community, balderas.

 

To properly identify how you should go about debiting your liability and sales accounts to correct invalid tips, I'd recommend working with an accounting professional. If you're in need of one, there's an awesome tool on our website called Find an Accountant. All ProAdvisors listed there are QuickBooks-certified and able to provide helpful insights for driving your business's success.

 

Here's how it works:

  1. Go to our Find a ProAdvisor page.
  2. Use the City or ZIP search field to specify a location.
  3. Select Find a ProAdvisor.
  4. Browse through your results and find one that works best for the business. You can click on each ProAdvisor's profile to learn more information about them.

 

Once you've found an accountant, they can be contacted through their Send a message form:

  1. Use the available text box to introduce yourself. Be sure to include details about which services you're looking for.
  2. Enter your appropriate info in the Your name, Your email, and Your phone number (optional) fields.
  3. Hit Send message.

 

I've also included a couple detailed resources about working with tips and journal entries which may come in handy moving forward:

 

Please feel welcome to send a reply if there's any questions. Have a wonderful day!

L
LB72Author
August 30, 2022

Thanks Zach, but I am the accounting professional. 

 

I have a team that has tried to come up with a fix. We know how double entry accounting works.

 

I'm asking here, because I'm hoping a QB professional will have the resources to look through past remedies for this particular problem - this can't be the first time someone has entered tips wrong on paychecks. We have exhausted all of our options.

 

I know you're just doing your job, and that's probably what you're supposed to send when you can't find an answer, but "go find someone else" isn't going to work for me.

MariaSoledadG
MariaSoledadG
August 30, 2022

We we're touched by how understanding you are with our job, balderas.

 

We appreciate for taking the  time to share your issue in this forum. In problems like this, I recommend reaching out to our support team so they can take a closer look and double-check how tips are being entered. Aside from that, they have the tools to pull up your account in a more secure manner. They can use a glance (screen share) which can identify the issue perfectly and in a quicker way. Here's how to reach them: 

 

  1. Click the (?) Help icon and enter Talk to a human (then type it again when prompted).
  2. When asked by the bot, enter your concern.
  3. Select I still need a human, then proceed with Contact us or Get help from a human.
  4. Choose either Chat or Callback.

 

Other than that, you may want to add your employees' pay to their setup, here's a reference that you might want to read for additional information: Add Pay History To QuickBooks Online Payroll.

 

Let us know if there's still anything else that you want to ask about tips. We're here to make sure that everything is covered. 

R
rvrfrf
August 30, 2022
[Edit: Duplicate post.]
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