If a patient makes a payment for a Payment Plan that is intended as an early payment (before the payment plan amount is due) or a payment to principal, future payments and interest can be recalculated.

- Enter the payment. See Payments to a Payment Plan.
- In the Account Module, double click the original payment plan. The payment will show as an line item in the amortization schedule.
- Under Terms, click Recalculate.

- Select how payment should be allocated.
**Prepay**: The amount will be applied to future amounts due (e.g. towards the next due payment).
**Pay on Principal**: The amount will be subtracted from the total balance, then remaining charges will be recalculated.

- To also recalculate interest, check the Recalculate Interest box.
- Click OK to recalculate payments.

Late Payments: Interest can also be recalculated for early or late payments. It does not matter which allocation method you choose.

- If you do recalculate interest, the accrued interest is added to outstanding interest amounts then recalculated.
- If you do not recalculate interest, the accrued interest is added to the next payment; the outstanding amounts remain the same.

## Example

Patient has a $1000 payment plan with a 5% interest rate and 4 payments. Patient pays $252.61 before payment #2 is due, making the payment plan balance - 252.61.

If you recalculate as a prepay (interest also recalculated), the payment will be applied to the next payment (payment #2).

If you recalculate as pay on principal (interest also recalculated), the payment will first subtract from the total balance. Then the remaining payments will be recalculated based on the new balance (new balance / remaining payments = new due amounts).

## Troubleshooting

**A patient has not paid their balance for more than one month and you want to recalculate interest.**

When you recalculate, it will only recalculate the interest for the balance at time you recalculate; it will not take into account more than one month.