After calculating payroll, understanding how invoicing, unallocated payments and credits, and adjustments work can help when paying team members based on when the practice receives payment.
Note: If the needs of your team are complex and require a full-featured payroll system, we recommend that you use another billing platform.
In this section, we’ll cover:
Invoicing and client payments
Your ability to identify and allocate payments starts with invoicing.
Payments will be unallocated and excluded from the clinician's total in the Income allocation report if an invoice’s total fee is too large and there aren’t enough payments to cover the invoice. Instead, we recommend creating individual invoices for each appointment, rather than one invoice that contains many appointments.
For example, an invoice is created for two appointments totaling $300. A payment is added for $150 for one of the appointments. The $150 won’t appear on the report because it hasn’t been allocated to an invoice yet. The $150 is therefore considered unallocated.
Note: For more information on how unallocated payments appear in the Income allocation report, see Viewing unallocated payments.
A client’s full payment for an invoice must be recorded in their account for the invoice to be marked as Paid. We also recommend invoicing and collecting full payment at the time of service. If a payment is added to a client’s file, but that payment isn’t allocated to an invoice, it won’t be included in the Total allocated to clinicians or Total allocated amounts.
Note: For more information about invoicing, see Creating invoices.
Unallocated client payments and credits
Unlike adjustments, the amounts on the Unallocated client payments and credits report don’t need to be factored into your clinician’s totals. This report tracks the income that was received or removed outside of the pay period.
The best way to avoid having clients on this list is to create invoices daily and collect payments at the time of service. You can track the status of an invoice in the Appointment status report.
Accounting for adjustments
At the end of each pay period, you can view your records to compare changes between pay periods. Adjustments happen when you use any payroll system, and comparing your current pay period to past ones can help you stay on top of the changes.
If any billing information changes after the pay period is closed, that change will be reflected as an adjustment on the current pay period once it’s locked. They can either be positive or negative amounts.
The amount in the Adjustments column of a past pay period will be included in the Total pay amount.
A positive adjustment is added to, and a negative adjustment is subtracted from the clinician’s total.
A positive adjustment means income from services rendered have increased for the amount that has already been tracked for a clinician in a previous pay period. A positive adjustment occurs when:
- An invoice is reassigned to a clinician
- A client payment is added and backdated
- A manual insurance payment is added and backdated
Note: For information on insurance adjustments, see Managing insurance adjustments.
A negative adjustment means income for services rendered have been reduced for what has already been tracked to a clinician in a past pay period. A negative adjustment occurs when:
- A refund is issued for an invoice outside of the current pay period
- A client payment is deleted, edited to be a lesser amount, or the date is changed
- An insurance payment is deleted, edited to be a lesser amount, or the date is changed
- An invoice is deleted or assigned to another clinician
For more information on the Past pay periods tab, see Using the Past pay periods tab for group practices.
To help avoid adjustments:
- Create a fee adjustment invoice for a change in client responsibility instead of deleting invoices when possible
- Refrain from backdating insurance payments outside of the current pay period
- Add client payments to invoices within the same pay period
- While the Income allocation report will still track payments added to invoices from a different pay period, the payment will only appear as part of the clinician’s income during the pay period when the invoice is marked as Paid