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There are two different scenarios when a refund might be issued :-
[1] Refund for Goods or Services (e.g. if goods are being returned or perhaps a service was unsatisfactory and a refund is agreed)
[2] Refund for a Pre-Payment (e.g. a patient pre-pays for 3 treatments, but only has 2 and then wants a refund for the third)[1] Refunds for Goods or Services
Example: A patient has a treatment for £20 and buys an ice pack for £15. An invoice is raised for £35 and the patient has paid it. The ice pack splits when the patient arrives home and they want a refund.
* Go to the Patient Record, click the Finances tab and open the Invoice in question (i.e. the invoice which is being refunded)
* From the Invoice Editor, click Create Credit Note
* A Credit Note is created which mirrors the original invoice. You now need to adjust the Credit Note so that the only items listed are those being returned/refunded
* Now click the Issue Refund button (from the Credit Note Editor)
* In the Refund Editor, select the Payment Method and enter the Amount being refunded
* Click Save and Close.You can now close the Credit Note Editor and the Invoice Editor which should take you back to the Patient Editor. You’ll notice on their Finances screen that a new Credit Note has been created and also a new Refund, which has been issued against the Credit Note.
[2] Refunds for a Pre-Payment
Example: a patient pre-pays for 3 appointments at £30 each (i.e. £90). He completes 2 appointments but feels there is no need for the third, so he requests a refund.
* Go to the Patient Record, click the Finances tab and open the Payment in question (i.e. the pre-payment which is being refunded)
* From the Payment Editor, click the Refund Payment button
* In the Refund Editor, select the Payment Method and enter the Amount being refunded
* Click Save and Close.You can now close the Payment Editor which should take you back to the Patient Editor. You’ll notice on their Finances screen that a new Refund has been created which has been applied against the pre-payment.
Why are there these two different scenarios?
In the first scenario, the refund must NOT affect the patient’s account balance. e.g. The patient is invoiced £20 for an item (their balance is -£20), they pay £20 (their balance is £0). They want a refund. A credit note is created (taking the balance to +£20) and a £20 refund is issued (returning their account balance to £0).
In other words, when issuing a refund for goods or services which have already been paid for, the patient’s account balance should not be altered at all – hence the need to raise a Credit Note AND a Refund which balance each other out.
In the second scenario, we are refunding a payment which has not yet been allocated against an invoice, so we DO want the refund to affect the account balance. e.g. The patient pre-pays £90 (balance +£90), they are invoiced for £60 (balance now +£30) then they request a refund. The £30 refund is allocated directly against the payment, hence their balance is now £0.
The bottom line is that Refunds must always be allocated either against a Credit Note (which won’t affect the account balance) or against an unallocated Payment (which will affect the balance).
This can be a difficult topic to get your head round, but if you simply follow the above rules then there shouldn’t really be any problems! 🙂
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