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 Prepayment

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:

  1. Click the Payment button and enter the prepayment amount.
  2. Enter the Payment details.
  3. Process any Credit Card Payment.
  4. Click Prepay.

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.

Note: The Income Transfer Manager may also create unallocated prepayments when a procedure is overpaid and there are no other outstanding charges due.

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 Prepayment

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:

  1. Click the Payment button and enter the prepayment amount.
  2. Enter the Payment details and click Delete Splits to clear the default payment allocation.
  3. Select the Treatment Plan tab, highlight the treatment planned procedures (TP) and click Pay.
  4. Process any Credit Card Payment.
  5. Click OK on the payment window.

Hidden paysplits will be created for each TP procedure selected and assigned the Default treatment planned procedure unearned type set in Allocations Setup.

Note: An allocated prepayment may also be created when a dynamic payment plan charge is overpaid. See Dynamic Payment Plan, Payment and Interest Logic.

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.

Change a Paysplit's Unearned Type

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:

  1. Re-open the payment and double-click the Paysplit.
  2. Select an Unearned Type from the dropdown.
    Note: If the selected unearned type is flagged as Do Not Show on Account it will be treated as an allocated prepayment (hidden paysplit), even if no TP procedure is attached. Hidden paysplits not allocated to TP procedures will be transferred to outstanding charges the next time the Income Transfer Manager is run.
  3. (optional) Assign a Clinic and Provider from the dropdowns.
    • Useful to pay providers on unearned income. Allow prepayments to providers must be enabled in Allocations Setup.
    • If the prepayment is allocated to a TP procedure, the clinic and provider are inherited from the procedure.
  4. Click OK to save the changes.