How to account for customer overpayment/tip

CBLHandyman

Hi Folks,
Am after some advice on how to handle an overpayment in Crunch.
Have raised and issued an invoice for (let’s say £100). On receipt of invoice, the client has paid via bank trans £130 (basically a tip for a job well done).
So, how can this payment be reconciled with the invoice as they are for differing amounts, and because the invoice has been issued, the amount can’t be edited.
What is the best/easiest solution for accounting for this in Crunch?

Regards Carl

Katie

Hi Carl,

Tips from your clients are still counted as taxable income, so you’ll need to make sure there’s an invoice for this in Crunch.

You can either:

a) Raise a new invoice for the additional income you’ve received. You can then record both invoices as paid in full and combine the payments when you reconcile your bank account.
or
b) Credit note your original invoice and raise a new one for the total.

The new invoice you create acts as a way of accounting for the money in Crunch, so you don’t need to send this to your client. If you’re VAT registered, you may need to seek additional advice from an accountant as voluntary tips may be subject to different VAT rules.

All the best,
Katie

CBLHandyman

Thanks Katie. Good to know.

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