When you are running a practice it’s not uncommon that there will be instances where accounts aren’t going to be paid. It may be that the patient is no longer reachable, the payment has been outstanding for a long time, or the outstanding amount is not worth your staff’s time in chasing up. Part of ensuring your financials are in control is knowing how to identify these bad debts and, if pursuing payment in these instances is not worthwhile, knowing how to record these outstanding payments as written off bad debts.
Before you begin
Before you start writing off your bad debts, you should determine how you are going to identify which outstanding accounts you are no longer pursuing and how you wish to reflect this within Genie. This article details how to apply a credit to outstanding invoices to reflect that the income has been lost. It’s a good idea to discuss with your practice accountant what information they’d like recorded when crediting an account and whether your practice works on a cash or accruals accounting basis.
In order to identify the practice's bad debts you will firstly need to know what money is currently owing to the practice. There are two in-built reports within Genie which can assist in determining this.
1. Unpaid Invoices report
The Unpaid Invoices report can be accessed by navigating to File > Maintenance and Reports > Monthly tab. This report can be run to show all outstanding invoices owing for a specified period of time and can include unprinted invoices if the preference is marked. For further information on using this report have a look at the Unpaid Invoices Report article.
2. Aged Debtors report
The Aged Debtors report can be accessed by navigating to File > Maintenance and Reports > Practice Analysis tab. This report can be run to show how long an account has been owing for. It is important to remember that the Aged Debtors report will not include invoices which have not been printed - i.e. the sale does not have a print date recorded against it. This is based on the theory that if an account holder has never been presented with an invoice (e.g. it hasn't been printed) then they can't know that it is outstanding and as such the debt should not be aged.
In order to reflect that you will not be receiving payment for an invoice you will need to apply a credit to the invoice. This can be done by following the below steps:
- Navigate to Open > Account Holders
- Search for the account holder with the balance to be credited off by entering the name of the account holder in the relevant field and clicking OK
- With their record highlighted, navigate to Billing > Account History
- Select the invoice in question from the list of invoices down the left of the window
- On the right side of the window slow double click in the Credit column cell for the relevant item to highlight. If there is an existing credit against this item, the credit amount will change to zero when you highlight it, but the new credit amount will be added to the previous amount once you save this.
- Enter the amount to credit off (usually the balance)
- Hit Enter and type a reason for the credit, such as ‘Bad Debt’ (the default response which will appear automatically)
- Repeat for any other items on the invoice
In the Payments section at the bottom of the Account History window, the credit will appear with the code of ‘2’ for credit, and the reason you have entered will appear in the Form column.
In order to quickly identify how much you have credited off within a given period, you can run a Credits Report by performing the below steps:
- Navigate to File > Maintenance and Reports > Administrator > Payments > Show Credits
- Choose a date range from the Period drop-down or enter your date range you wish to search for bad debts in
- Select whether you want to view credits for all providers or just the one you select
- Click the OK button
- The resulting window shows the individual credits that fit into your search criteria, as well as the total of these credits, at the bottom right hand corner of the window
- Double click on a result here to open a window that details more information about that particular credit, such as the reason you gave for the credit in the Payment Type area
This report can be printed by the printer icon available in this window which will open the Report Builder window. You can then select the Columns tab, drag across any desired fields you would like your report to display and print, preview, or export as desired. For further information regarding the use of QuickReports refer to the Using QuickReports article.
- Credits will display in the Receipts Report through File > Maintenance and Reports > Practice Analysis, by holding the Alt key while clicking on Item Report.
- In the Item Report through File > Maintenance and Reports > Practice Analysis > Item Report. In the Item Report, the Value column is the total amount payable (i.e. Total Fee less Credits and Discounts). As such, only partially credited items will appear as part of the Value column. If a partial credit has been applied, the value will be adjusted to the outstanding amount, not the original fee charged.
- Fully credited items are included in the Items by Month Report. If the Items by Month Report does not match the Item Report (which is based on Service Date), you may wish to cross reference with the Receipts Report to check whether a credit has been applied.
- In the Daily Billing Report the Credits column will show any partial credits that have been applied, but fully credited invoices won’t appear in the Daily Billing Report at all.
- In both the Transaction Summary in the Monthly tab of Maintenance and Reports, as well as the Daily Transaction Report through the Daily tab, all credits applied for the given time frame are shown.
- In the Practice Analysis tab, the Billing vs Income Report shows total credits. The totals are broken down when you click Print Sales, and credits also appear in Print Breakdown, Print Receipts and Summary Records.