3 Reasons Allocating Balances is So Important

Discover why allocating individual patient and provider balances is a more precise way to keep records and how to do it.

Updated 10/20/21

Allocating balances means posting procedures, payments, and adjustments in Dentrix to individual patients and providers instead of posting everything to the family guarantor and the doctor/owner of the practice. Allocating balances is a more precise way of tracking procedures and payments, and it can take a bit more time to do, especially if you haven’t been doing it in the past. But it’s important to allocate patient’s procedures, payments, and adjustments to the patient for accounts to be calculated correctly. Similarly, it’s important to post procedures, payments, and adjustments to the specific provider of the procedure.

Why do balances need to be allocated?

It’s important that payments and adjustments are always posted to individual patients and not to the guarantor. If payments aren’t posted to the patient, you’ll find that although the family may have a zero balance, the patient will have a balance in Dentrix, and the guarantor will have a credit. This can cause a mess in your accounting and make answering patients’ billing questions difficult. If you’ve been posting payments to the guarantor in Dentrix and had a patient call and asks you who in the family owes a balance, you know what I’m talking about.

It’s also very important that payments are posted accurately amongst providers. This will become increasingly important if your office hires an associate or if your doctor plans on selling the practice. Payments must be posted accurately in order for collections to be calculated accurately.

Dentrix has provided ways to simplify the allocation process by using the Provider Credit Balances Manager. With the release of G7.4, there are additional features you can use to make managing family and provider balances easier.

The first new feature is available when combining or separating families using the Edit Family Relations option in the Family File. When editing family relations, Dentrix walks you through the process, showing you how balances will be affected when moving family members.

When separating families, you have the option to move the balance to the new family or keep it with the original family. Any necessary adjustments will be calculated for you and you can designate a specific adjustment type to be used.

Another new feature in Dentrix that is available in Dentrix G7.3 and higher is the ability to have up to 255 adjustment types. Because of this, it’s a good idea to create specific adjustment types for both family adjustments and provider adjustments. That way, when reviewing reports, you’ll be able to see exactly why an adjustment was made.

The addition of these two new features in Dentrix can simplify the process of making adjustments when combining and separating families and can help you allocate balances correctly.

Why is it so important to post procedures to the treating provider?

Many practices that are privately owned by a solo practitioner have always posted all payments and adjustments to the owner-doctor. This can result in messy accounting and inaccurate reports. For example, if a patient comes in for a prophy with the hygienist, which costs $100, and an exam with the doctor that costs $50, and the entire $150 payment is posted to the doctor, reports in Dentrix will reflect that the hygienist has a balance, or is owed $100, while the doctor has a credit of $100.

Why does it matter if providers have balances and credits if the patient’s balance is accurate?

If your doctor decides to retire in the future or bring on an associate who is paid on production or collections, it will be imperative that procedures, payments, and adjustments are posted properly among the different providers. Usually, associates are paid based either on their production or on money collected from procedures they performed. In order to determine how much they should be paid, you would run a report in Dentrix to determine the amount of production or collections. Production is determined by the provider ID that the procedure is assigned to. That’s why it’s important to always double-check that the provider ID is correct when setting an appointment complete. Collections amounts are also determined by the provider ID that the payment is assigned to.

You can use the Spilt by Provider feature when posting a payment to ensure the payment is posted to the provider of the procedure.

The Split by Provider feature takes the guesswork out of which provider to post payments and adjustments to. In the example I gave earlier, with the $100 that should have been posted to the hygienist and the $50 that should have been posted to the doctor, when you use the Split by Provider feature, Dentrix calculates this automatically and posts the payment accordingly. This feature will prevent the problem of provider credits from continuing to happen in the future.

It’s also important to post adjustments by provider because adjustments affect production and collections based on the adjustment type. An example of how this could affect the way an associate is paid is if a patient overpays for a procedure and has a credit. Let’s say the patient paid $1000 for a procedure, their insurance pays more than estimated, and the patient is left with a credit of $200. The patient refund adjustment should be posted to the same provider the payment was assigned to. Otherwise, if the provider is paid a percentage based on collections, they would be paid a percentage of $1000, instead of $800, which would be correct.

The best Dentrix report to use when calculating provider production and collections is the Provider A/R Totals Report. The reason to use this report is because adjustments are calculated into the production and collections to give you accurate totals.

For past provider credits and balances that weren’t allocating correctly, Dentrix has developed some tools to assist in the proper allocation of provider credits with the Provider Credit Balances Manager. This new tool will help your office to clean up provider credits for more accurate reporting.

With the release of Dentrix G7.4, another new feature has been introduced to help you clean up provider credits and balances. When inactivating a provider, you have the option to transfer provider balances to a replacement provider.

This eliminates the need to allocate balances for the inactivated provider by individual patient accounts. This is an exciting new feature. Many offices I work with have providers who haven’t worked at the office in years but still have credits and balances. By inactivating them and transferring their balances and credits to a replacement provider, it will save you a lot of time.

Before inactivating a provider, choose the replacement provider carefully. It’s important that you understand how the balances and credits of the replacement provider will be affected. An example of how balances and credits will be affected is if provider DR01 retires. In Dentrix, payments have been posted to provider DR01, so he has a large credit within the provider credits reports. Provider DR02 is taking over the practice, but payments had not been posted to his provider ID, so he has a balance. When you inactivate DR01, and replace him with DR02, then DR01’s credit will be applied to DR02’s balance. Part of the inactivating process is to review a list of changes that will take place in your database when you inactivate a provider. Watch the short video in the Inactivate Provider section of the What’s New Blog to see how it works.

Taking the time to allocate your procedures and balances correctly will make it easier for you to create an accurate treatment record, collect patient payments, and pay associates and hygienists based on production. If you aren’t doing it, get started today!

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For additional information, read the following Dentrix Magazine articles:

To see a preview of the latest Dentrix features and updates, be sure to check out our What’s New Blog.

By Charlotte Skaggs
Certified Dentrix Trainer and The Dentrix Office Manager columnist

Charlotte Skaggs is the founder of Vector Dental Consulting LLC, a practice management firm focused on taking offices to the next level. Charlotte co-owned and managed a successful dental practice with her husband for 17 years. She has a unique approach to consulting based on the perspective of a practice owner. Charlotte has been using Dentrix for over 20 years and is a certified Dentrix trainer. Contact Charlotte at vectordentalconsulting@gmail.com.