Prepayments are a great way to collect payment from your patients before work has been completed, but sometimes you may be unsure how to best take a payment or how to allocate the payment once treatment has been completed. Below are some best practices for handling prepayments.
Treatment Plan Prepayments
One way to make sure prepayments get allocated to the correct procedures is by using Treatment Planned Prepayments. This can be enabled in Allocation Setup and allows users to allocate payments to treatment planned procedures.
To allocate a payment to a treatment planned procedure:
- In the Account Module, if you would like to allocate part of the payment to completed procedures, select those procedures from the account and click Payment.
- Enter the prepayment amount, plus the amount for the additional completed procedures selected (if any), and click OK.
- When the Payment window opens, select any auto-created prepayment and payment splits not for the completed procedures and click Delete.
- On the right-hand side of the payment window, select the TreatPlan tab.
- Select any treatment planned procedures you would like to allocate this payment to.
- Click Pay. Open Dental will create payment splits automatically for the selected procedures and assign an unearned type of Treatment Plan Prepayment to the procedures.
- Enter any additional payment details before clicking OK.
Treatment Planned Prepayments will not show as a credit in the patient’s account by default, instead, they will appear in the Hidden Splits tab awaiting the procedures’ completion. Even though Treatment Planned Prepayments are an unearned income type, they will be excluded from the family’s total Unearned balance.
Once the procedures are set complete, an income transfer will automatically be completed to reallocate the payment, so it is no longer unearned. This will move the income from the Hidden Splits into the Patient Account.
Once all treatment planned prepayments have been allocated, the Hidden Splits tab will turn from red back to gray.
General Prepayments and Allocating Unearned Income
You want to take a prepayment but don’t have specific procedures to allocate it to, or maybe your patient had a credit that can now be allocated to some other procedures. That’s where the Allocate Unearned tool can come in handy.
First, if you want to take a prepayment, follow these steps:
- Click the Payment button.
- Enter the payment amount.
- Enter any payment details (e.g., payment type)
- Click Prepay (next to Amount) – when prompted, click Yes.
Open Dental will automatically mark the payment using the default unearned type, typically Prepayment.
To allocate a prepayment:
- Click the Payment dropdown.
- Click Allocate Unearned.
- Select the procedure(s) to allocate income.
- Click OK.
- An income transfer will be created to allocate any available unearned income to the selected procedure(s).
If your office uses multiple unearned income types and needs to allocate a specific type to a procedure see Allocate Unearned Income: Multiple Unearned Types for instructions on how to properly allocate this income.
Allocating Prepayments on the Original Payment Day
If your office takes payments when patients check in or before procedures are set complete (e.g., copays), you may wish to allocate the payment to the original procedure rather than doing an income transfer, if the procedure is set complete on the same day as the payment.
Note: This method is not recommended if reports have already been run for the day or procedures are set complete on a different day than the payment was taken. Users will need the Payment Edit permission to complete the following steps.
If a patient comes in for an appointment and makes a payment before procedures are set complete:
- Take the payment as a prepayment (see steps above).
- Once the appointment (and procedures) has been set complete, edit the payment splits on the original payment. This should be done the same day only and before reports have been run for the day.
- Double-click the original payment.
- Select the Prepayment split.
- Click Delete Splits.
- Select the procedure(s) to allocate the payment to from the Outstanding Charges list (on the right).
- Click Pay.
- Click OK.
For additional resources on taking prepayments, visit the following pages in the Open Dental manual:
And of course, our support techs are available to answer any questions your office may have on prepayments and how to allocate unearned income. Contact Us to start a chat or call support today.