Unearned / Prepayment
In the Account Module, at the upper right, is the family Unearned Income balance.
Unearned income is typically a patient prepayment towards future charges or a patient overpayment to be refunded. When a patient payment has a Payment Split (paysplit) with an unearned type set, it is considered a prepayment or unearned income. Prepayments may be allocated to treatment planned procedures at the time of the payment or left as unallocated, and manually allocated later when a charge is completed. See Allocate Unearned Income.
Unallocated prepayments are patient payments assigned an unearned income type but not yet allocated to a charge. These are useful for collecting payments in advance for future charges (e.g. adjustments, pay plan charges, repeating charges, etc.) or prepayments to treatment not yet determined. To instead allocate a prepayment to treatment, see Allocated Prepayment below.
To create an unallocated prepayment:
The payment window will immediately close. One unallocated paysplit will be created with the Default unearned type for unallocated paysplits set in Account Module Preferences.
The payment will show as a credit line item in the Patient Account, affecting the patient's balance. The family's total unallocated amount will show under Unearned in the top aging bar. Hover over the total to view a breakdown of the family's unallocated, unearned balance. All unallocated prepayments within the family are summed by unearned income type. No breakdown is displayed if the total unearned balance is zero.
When new charges are due, transfer the prepayment to the charges. See Allocate Unearned Income. To transfer unallocated prepayments to repeating charges, check Use Unearned in the Edit Repeat Charge window. Run the Unearned Income Reports to track accounts with prepayments.
Allocated prepayments are patient payments assigned an unearned income type flagged as Do Not Show on Account (i.e. a hidden paysplit) and are allocated to a specific treatment planned procedure. Allow prepayments to allocate to treatment planned procedures in Allocations Setup must be enabled.
To create an allocated prepayment:
Hidden paysplits will be created for each TP procedure selected and assigned the Default treatment planned procedure unearned type set in Allocations Setup.
The payment will be hidden from the Patient Account tab and most reports, to not affect the patient balance until the treatment planned procedure is set complete. It is also excluded from the Unearned balance since it is already allocated. A summary of the prepayment can be viewed under the Hidden Splits tab. Once the procedure is set complete, the prepayment is transferred to the Patient Account with an automatic income transfer. Run the Hidden Payment Splits Report to track accounts with these prepayments.
Multiple unearned types may be added in Definitions: PaySplit Unearned Types to further define what the prepayment is intended for (e.g. copay, ortho prepayment, etc.).
To change the unearned type on a paysplit: