Wednesday, January 15, 2014

2014 New Year's Resolution - credit balance cleanup

My 2014 New Year’s Resolutions continue for all the office managers who are looking to clean up their databases. My last two blog posts were how to clean up duplicate insurance companies and duplicate or unused Medical Alerts. Check both of those articles out.

Today we are going to tackle the issue of allocating payments properly on the Ledger and fixing the provider credits. In Dentrix, you can apply payments to the patient and allocate the payment to the different providers. However, most practices do not split the payments accordingly and then the patient balances and the provider A/R is not accurate. To fix the patient’s ledgers can be bit of a project, but, if this is one of your 2014 New Year’s Resolutions, here is how you do it.

First, you need to tell the computer how you want to allocate the balances. Go to the Office Manager > Maintenance > Practice Setup > Preferences. Here are your default choices:
  1. Guarantor’s Provider – Generically assigns all payments as if they go to the Guarantor’s PROV1 choice in Family File, whether or not that provider did any work for the patient or family receiving the payment.
  2. Split Payment, Percentage – If the doctor did 75% of the work and the hygienist did 25% (based on production dollar value), the payment is divided into two payments, paying the providers 75/25. Not the best choice because insurance may later pay the same providers for those services, creating imbalances.
  3. Split Payment, FIFO – FIFO is “First In, First Out” and attempts to pay the oldest debt first, paying providers until money runs out. Not the best choice because insurance may later pay the same providers for those services, creating imbalances.
  4. Split Payment, Guarantor/Account Estimate – Generally regarded as the best choice. This uses FIFO but also considers if there are insurance estimates. Additionally, it only pays the portion expected to be owed by the patient.
  5. Split Payment, Equal Payments – If two providers did work for the patient, the money is split 50/50 between the two. Not the best choice because insurance may later pay the same providers for those services, creating imbalances.

My recommendation is #4 because this is the only one that will take into account the estimated insurance portion. Now you also must have two adjustment types that you will use to reapply the provider credit balance … one being a credit adjustment and one being a debit adjustment. If you need to create two new adjustment types, go to Office Manager > Maintenance > Practice Setup > Definitions. You might already have an adjustment type called “Transfer Balance Credit” and “Transfer Balance Debit.” These will work just fine.

Next, from the Ledger go to File > Pre-Payment Options Setup, then check Enable Allocate Balance Option and then select the adjustment types. Make sure the Itemize Allocation Adjustments for Billing Statements is not checked. This will ensure the adjustments will not show up on your patient’s billing statements.


The report you are going to start with is called The Provider Credits Report. Go to the Office Manager > Reports > Ledger > Aging Report and check Provider Credits. This will give you a report of all your providers who have a credit balance.

Finally, from the Ledger, you can start reallocating the balances properly. When you start correcting the balances, it is recommended to correct the patient balances first then allocate to the correct provider. So if you need to transfer a credit balance from one patient to another (or several), do this first. Select the patient > click on Transaction > Allocate Credit Balance, check either Family or Patient (in the long run, Patient will be more accurate), then select the allocation method (Guar Est is the most accurate) and click OK. This will apply adjustment on the patient ledger to correct the provider balances.

Remember, these adjustments will not show on the billing statement as long as you have not checked it in the Allocation setup in the above instructions.

If you want more information on keeping your ledger balances correct, please refer back to a previous blog post, “Are you a stickler for accurate numbers?”




Dayna Johnson, Certified Dentrix Trainer
Dayna loves her work. She has over 25 years of experience in the dental industry, and she’s passionate about building efficient, consistent, and secure practice management systems. Dayna knows that your entire day revolves around your practice management software—the better you learn to use it, the more productive and stress-free your office will be. In 2016, Dayna founded Novonee ™, The Premier Dentrix Community, to help cultivate Dentrix super-users all over the country. Learn more from Dayna at and contact Dayna at


  1. Can I use allocate debit balance and allocate credit balance for both allocating provider credit balances and patient credit balances? Currently I am using Transfer debit balance and transfer debit balance to correct the patients' balance.

    1. Yes, I do. This way on your Adjustment Report these two categories should always balance each other out.