Credits correct charges after an invoice has been generated. Use them for billing errors, service changes, unplanned move-outs, and bad debt write-offs. This guide covers applying credits to existing and future invoices, managing overpayments, unapplying credits, and writing off balances.
About Credits
- Best practice for corrections: A credit, especially a prorated one, creates a separate transaction with a clear audit trail. This is preferred over editing a historical charge, which can disrupt financial reporting and closed GL periods.
- Overpayments: A credit applied to a paid invoice often creates an overpayment, which can be applied to a future invoice or refunded.
- Future invoices: Credits added to the Credits section of a resident profile apply automatically to the next invoice that generates.
- Bad debt: A credit using a “Bad Debt” or “Write Off” billing item zeroes out an uncollectible balance.
Tip: If you know about a service change or move-out in advance, add a rate change or end service date before the billing period instead. See Recurring Charges and Rate Changes.
For planned reductions like promotions and concessions, use a discount instead. See Discounts vs. Credits.
Apply a Credit to an Existing invoice
This is the most common workflow. Use it to correct billing errors, account for an unplanned move-out, or handle a service change, such as a room change or care plan fee update.
- Open the invoice and click Options > Edit.
- In Transactions, click CR on the charge to credit.
- Select the Issued On date.
- Set Amount Calculation to Prorated and enter the Credit Service Period for the exact dates to credit. ALIS calculates the Credit Amount from the daily rate.
- Add a clear Description, such as “Credit for 10/25 move-out.” Optionally, add an Internal Note, which won’t display on the invoice.
- Click Save. The credit appears on the invoice immediately.
Tip: If CR isn’t available, which can happen when the GL period is closed, click Apply Credit at the top of Transactions instead. This requires a few more manual steps.
If the invoice has a payment, ALIS asks how to handle the new overpayment. The most common practice is to unapply only the overpayment amount, but confirm this with your accounting team.
Manage Overpayments
A credit on a paid invoice creates an overpayment balance on the resident’s account. Apply that balance to a future invoice or process it as a refund. This is a common step in the final bill for an unplanned move-out.
Important: Refund the overpayment balance that is created by the credit. It is not a good accounting practice to create a credit on an account and then refund that credit directly. See Resident Refunds and Billing for Resident Move-Outs.
Add a Credit for a Future Invoice
Use this method if your policy is to apply credits to future charges rather than to a past invoice. Make sure Automatically Apply Excess Credits to Invoices is set to Yes in Billing Settings.
- In the resident profile’s Billing section, expand Credits and click +Add Credit.
- Select the billing item in Credit For.
- Set Amount Calculation to Prorated, then enter the Credit Service Period and Item Price.
- Add a clear Description, since the credit appears separately from the original charge. Optionally, add an Internal Note.
- Click Save.
The credit stays unapplied and applies automatically to the next invoice that generates. You can also apply it manually to any invoice at any time.
Unapply a Credit
To remove a credit from an invoice but keep it on the resident’s account, open the invoice, click Options > Edit, and click Unapply on the credit line.
If the credit’s period is closed, the reversal posts to the current open period. If the period is under a Restricted Close, only staff with the Manage Restricted Closed Periods permission can unapply it, after a confirmation prompt.
Write Off Bad Debt
When an invoice can’t be collected, apply a credit using a “Bad Debt” or “Write Off” billing item. This zeroes out the invoice balance and exports the write-off to the correct GL account. To set up the billing item, see Billing Settings.
Credits Report
Use the Credits Report to audit credits issued within a date range. The Issued On Date filter defaults to the current month. Adjust the filters and click Refresh.