Before we go into a couple of methods that you could use for entering interest income received in to Therabill, we want to be up front and tell you that interest received from an insurance company is not something that Therabill tracks or that you would normally enter in to Therabill. Therabill is all about charges for therapy sessions that you performed along with the corresponding balances on those charges. Therabill is not meant to take place of your businesses accounting system (for example, Quickbooks). While you would definitely enter interest income received into your businesses accounting system, it is not really necessary to enter it into Therabill. Therabill is not a full accounting system where you enter all income received by your business. In a nutshell...
- Your accounting software (for example, Quickbooks) is your double entry accounting system. This is where you keep track of all of the income received by your business. You should enter your payments received from insurance companies into your accounting system as well as any other income you receive. You will also enter all of your business expenses into your accounting software. Your accounting software is where you will generate balance sheets and profit and loss statements. In the case of interest, you may want to create an income category called interest income.
- Therabill keeps track of your therapy services and the balances due on those services. Each service is a charge that gets added to your accounts receivable. You then enter in payments and adjustments on those charges. Eventually, each session (charge) will have a zero balance (when the sum of payments and adjustments applied to the session/charge is equal to the charge amount). The balance on a session should never be a negative number (which would happen if you were to apply interest received to sessions). If you are entering all of your payments into Therabill, then you can use reports within Therabill to enter payments received in to your accounting software.
In general, you will probably have different types of miscellaneous income as well as office expenses to track. Therabill is not double entry accounting software and you will not be entering in miscellaneous income nor office expenses in to Therabill. Your business should have accounting software to enter all of your income and expenses.
So, you really, really want to enter your interest income into Therabill?
Just to re-iterate, Therabill is about charges and payments / adjustments applied to those charges. A charge is something that increases the amount due by a patient (accounts receivable) and a payment / adjustment decreases the amount due. Payments and adjustments should be applied to a specific charge. In the end, all sessions should have a zero balance (after all insurance payments, client payments and adjustments have been applied to the charge). A session should not have a negative balance (overpayment towards a specific session). Doing this will throw off many of your accounts receivable reports. Therefore, you should never enter interest received (which doesn't have a corresponding charge) without first creating some kind of charge for it. Here are two ways that you can do that.
- Create a fake charge: You can create a session / charge in Therabill. The charge amount of the session being the interest amount received. You should probably even create a session class for this type of session in order to easily track it in your reports. For information on session classes, please see: Session Classes in Therabill. You would then apply the payment towards this fake session. If you are really wanting to enter interest income received, then this is the recommended way of doing it.
- Increase the charge amount of a session: This is similar to the option above, however, in this case you are editing the charge amount of a session that you already have entered in to Therabill. You will be making an edit to the charge amount to increase it by the same amount as the interest income received. You would then apply the interest payment as a payment towards this session.