The National Directory of Certified Public Accountants

Ask A CPA - Tip Income Reporting

Tip Reporting - Point Of Sale Systems

A Point of Sale Register system that tracks server sales by employee is a valuable tool to assist you to see if the servers are accurately reporting their tips. Your Point of Sale system should report each server’s total credit card sales and total charged tips on credit cards, and the server’s total sales (cash and credit card). From the credit card information you can get a tip percentage to apply to the server’s cash sales. Combine the total credit card tips and the estimated cash tips for the period in question and compare this total to the tips reported by the employee.

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