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Updating a client's billing page from insurance to self-pay

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  • Wendy Belding

    I asked a friend about this:

    I believe it’s a choice based on how you do your accounting for taxes.  Most places are CASH accounting.

    CASH: You (typically) bill $200.  You are only paid (or agree to only get paid) $100.  Your CASH accounting is $100.  So, you can just put $100 for the fee for reduced-fee clients.

    ACCRUAL (much less common):  You bill $200.  Your ACCRUAL accounting is $200.  You are only paid (or agree to accept) $100.  So, you need to track a write-off of $100 to offset that “loss” compared to the $200 you’ve ALREADY accounted.

    Short answer: If you’re CASH accounting (and it’s 99.9% chance you are) just put the new, reduced rate in.

    ~ Clark

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