Cleaning up Invoices

UPDATE: Simple Invoicing has largely solved the messy invoice problem! Invoices will now automatically update when a fee is updated.
Turn it on today! Settings > Client Billing and Insurance > Client Billing Documents

How Invoices Work

Invoices are like polaroid pictures. The system takes a snapshot of the appointment on the day it occurs. If something changes, the system doesn’t change the original snapshot, it creates a new snapshot, an “adjustment invoice”, that adds or subtracts an amount from the fee on the original invoice to make the total match the fee on the appointment itself.

Examples

Original fee: $0 —> Original Invoice : $0

Updated fee: $20 —> Adjustment invoice: $20

Original fee: $100 - Original invoice: $100

Updated fee: $20 - Adjustment invoice: -$80

Why we clean up invoices 

All invoices are dated the date they are created. This is fine if the invoice was created the same day as the appointment. 

Where it starts to cause issues is when the adjustment invoices come through, they are dated the date that they were created. So when you create a statement, it’s almost impossible to figure out the true charge for a given date of service. 

Running an easy-to-read statement is essential when trying to understand a client balance or credit, for both ourselves and our clients.

So when we create a statement, and it doesn’t make sense, we need to clean up the invoices.

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My Invoice Motto

ONE Invoice for each date of service with the issue date MATCHING the date of service.

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Steps

1. For any date of service with more than one invoice, delete all invoices.

2. Create a new invoice: New > Invoice

3. Choose one date of service (if there are multiple to choose from)

4. Create invoice

5. Change the issue date to match the date of service on the invoice line item

6. Save and close

7. Repeat for each date of service that has multiple invoices (you may have to go back quite a ways to find them all. It’s best to work oldest to newest)

8. Click ‘Add Payment’ and allocate funds back to the new invoices
   

Now when you run your statement you’ll be able to see the original fee and adjustment(s) for each date of service and each payment in chronological order. 

Note that the time stamp of these invoice may put them a little out of order for each date, but it should still be pretty easy to follow.

If there are any mistakes with fees or payments, you’ll be able to see them quickly and easily. You’ll also feel good about giving this statement to a client because they will also be able to understand their balance.

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Tip - Make sure the client’s copay is set correctly once you know what it is. This reduces the number of adjustment invoices that will occur since the amount will already match the EOB.

Unallocated Balances

There’s so much confusion about the unallocated amounts, and for GOOD REASON! Not only is this not designed well, SP’s implementation was akin to throwing us into the deep end of the pool and saying, “good luck!”

A few key points to understand:

1. Invoices are the backbone to client billing, reporting, and payroll. Essentially, if it’s not on an invoice, it almost like it didn’t happen. This incudes charges AND payments. This is why we have to use them, and this is why SP wants to bring unallocated amounts to our attention.

2. Payments are initiated by the clinician and must be collected AND assigned to an invoice (allocated). This was instituted so we could apply partial amounts to invoices. There was a lot of complaining about lack of that back in the day! I think this is also paving the way for clients to be able to make partial payments in the portal, but we’ll see.

3. Unallocated amounts happen for the following two reasons:

   1. Payment was collected but not assigned, so it’s in limbo (unallocated)

   2. Payment was assigned but then the invoice was deleted/recreated. The payment become unassigned and went back into limbo (unallocated).

4. If there is an unallocated NUMBER (like: (13)) but the amount is $0 —>IGNORE IT! This means that there were transactions that occurred that aren’t attached to invoices. This is not a problem because there’s no actual money in limbo. Many of these numbers are from the older billing process. But it can also happen from refunds.

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Keep it Neat!

The way to keep your accounts as tidy as possible is to keep your invoices as tidy as possible. Follow the clean up steps on this blog post if you already have a mess.

• Use the Appointment Status Report in the client’s account for a quick birds-eye view of all charges. This is a very underutilized report in my experience with many, many SP users.

• Use a statement to understand a client’s balance/credit. This ONLY works if invoices are cleaned up as per the blog post listed above.

• Put the right copay in as soon as possible. The MINUTE you know the copay, get that changed in the client’s settings. Don’t keep allowing the system to create adjustment invoices. It’s not wrong it’s just messy and confusing!

I know this system is confusing, but with some education and practice, it’s completely functional. Could it be better, yes! And maybe they’ll make it better. But in the meantime, clean up the messes with help, which will help you learn how it works. Once you “get it”, it will no longer be so intimidating or confusing.

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Are you seeing something I didn’t address here? Let me know so I can add more detail to this post!