Credits

Credits can be used in ALIS to clarify service changes, correct errors, and close resident accounts. In this article you can learn the best practices for applying credits.

• It's possible to add credits for items invoiced during closed GL periods, making it the best option for correcting or adjusting charges billed in the past.
• Credits are almost always used to correct something, and if your team has been given notice of service changes move-outs, the entire crediting process can be prevented by adding rate changes ahead of the billing period in which they will occur! Read this article for more information about rate changes: Recurring Charges and Rate Changes.

Prorated credits on invoices

• Adding a prorated credit to an invoice (instead of editing the dates of a charge that has already been invoiced) helps ensure the correct chronology of transactions exported to your GL. Your accounting team will thank you for following this process!
• You might do this to adjust incorrect charges that were completed in error, account for a change of service such as moving to a different room type or updating the care plan fee, or adjust a move-out invoice.

Steps 1-4 below outline the most common way to utilize credits in ALIS:

1. Go to the Edit Invoice page for your invoice. Anywhere you see the invoice in ALIS, you should be able to click Options > Edit to get there.
2. In the Transactions section, click the letters CR in the row of the item you need to credit.
   • If you do not have the CR option, this is likely because the invoice period has already been closed. In this case, click the Apply Credit button at the top right of the Transactions area.
3. Complete all details on the pane. Make sure the Amount Calculation is set to Prorated and the Credit Service Period is the period of time the payer should be credited.
   • It is a great idea to add a description in case there are questions later about why this concession was made!
   • If there is already a payment on the invoice, there will be a question asking to unapply all payments on the invoice, or to unapply the overpayment amount, which is calculated by the credit. Most likely you want to just unapply the overpayment amount, but it is a good idea to confirm the preferred policy with your accounting team.
   • Click Save to add the credit.
4. Now that your credit has been added to the invoice, review the resident's billing account to proceed with any next steps for overpayments or other items you may need to add. You can either apply the overpayment to future invoiced charges or create a Refund. Read this article for more information about Refunds: Resident Refunds.

Move-out invoices

Creating a credit is often the middle step for managing overpayments on move-out invoices if the move-out was unplanned. It is important that you refund overpayment balances as a result of crediting a specific invoice.

It is not advised to create a credit on the account and refund the credit. It is not a good accounting practice to refund a credit!

This article describes how to reconcile and lock the accounts of moved-out residents: Billing for Resident Move-Outs.

Adding credits for future invoices

Your organization may have a policy of only applying credits to future invoices. This preference will lead you to add the credits on the resident profile instead of adding it to a particular existing invoice.

Verify that your community has this setting turned on: "Automatically Apply Excess Credits to Invoices".

1. On the resident's profile, go to the Credits section and click the +Add Credit button.
2. Verify all details in the Create Credit pane.
   • It is very important to include a clear description of the credit here, since it will be applied separately from the exact item and invoice that necessitated it.
   • Fill in the billing item to credit in the Credit For menu, set the Amount Calculation to Prorated, add the Credit Service Period, item price, and Description.
   • An Internal Note may be useful to add if you want to include information that should not display on the invoice to which it will apply in the future.
   • Click Save.
3. This credit can be applied to any invoice at any time, but if you do nothing (assuming the above-mentioned setting is turned on), it will apply to the next invoice that generates. The overall balance of the future invoice will be lower as a result of the credit.

Bad debt

In the event that you will not be able to collect on an invoice and need to lock the resident's account, a credit is the best way to reconcile the outstanding balance.

On the outstanding bill, apply a credit for the appropriate billing item at your community for this scenario. This billing item may be called something like 'Bad Debt' or 'Write Off'. By applying a credit to the account for this billing item, the balance can be exported into the correct concessions account.

Read this article for more information about billing settings, including adding billing items: Billing Settings.

Related Articles:

Recurring Charges and Rate Changes

Billing for Resident Move-Outs

Resident Refunds