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  • #30845

    Lou

    The “This is an account CREDIT” box ought to read “This is a REFUND”

    1) Such a transaction reduces the “Credit” balance on the person’s account.

    2) In accountancy terms a refund is a “debit” in the Sales ledger

    #31935

    Support
    Keymaster

    Credits and Refunds are two completely different things and the box “This is a Credit” is correct.

    1) Such a transaction reduces the “Credit” balance on the person’s account.

    That’s correct. Credits are applied against Invoices in the exact same way as are payments – which is why the “This is a Credit” box is on the payment screen. Credits are given when you want to “credit” a persons account but when no money changes hands.

    2) In accountancy terms a refund is a “debit” in the Sales ledger

    While Credits are applied against Invoices, Refunds are applied against Payments, and unlike Credits (where no money changes hands), Refunds are given when money is returned to the customer.

    Refunds are also more complex because they can affect the account ledger in different ways depending on the allocation status of the Payment being refunded.

    For example, let’s say you invoice a patient for £20 and then they pay you £20. Their account balance is £0. Later on you decide to refund them that £20 payment (or perhaps just a part of that payment).

    What is their account balance after the Refund? Still £0 – hence the Refund has to be posted both as a negative payment and a negative invoice so that the account balance is not affected.

    However, what if a patient has pre-paid £100 for 5 treatments (@ £20 each)? They receive 4 treatments and invoices are raised for a total of £80 – hence their account is still £20 in credit. They don’t want the last treatment so you give them a refund for £20. This is a Refund (not a Credit) because money has changed hands, however in this case the account balance needs to be adjusted.

    Of course, it could also be the case that a Refund is applied against a part-allocated and part-unallocated Payment which further complicates the calculations required. None-the-less, ClinicOffice handles all these possibilities.

    I hope this helps to explain things a bit better for you. If you have any suggestions as to how all of the above scenarios could be handled differently and more simply then we’d be happy to listen.

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