Payment and Adjustment transactions are used when creating and posting payments in the system. Once set up, they allow you to accurately categorize and track different types of financial activity, ensuring consistency in your billing records. When entering a payment, you’ll select the appropriate transaction type to reflect the nature of the payment or adjustment being recorded. When entering a payment, you’ll select the appropriate transaction type to reflect the nature of the payment or adjustment being recorded.

Create a payment transaction

A payment transaction is created whenever funds are received, refunded, or otherwise transferred, such as when a patient or insurance company makes a payment, a refund is issued, or an overpayment is corrected. Creating a payment transaction records the movement of money, maintains an accurate audit trail, and ensures that financial reports and patient balances remain current.

To create a new Payment Transaction, click the Utilities icon on the top right. 

Click Practice Setup, then Payment Transactions.

Click New Payment Transaction. 

Select the appropriate payment type from the Master Transaction Type dropdown menu. 

Manually enter the payment transaction code in the Code field. For example, if you selected Patient Payment as the Master Transaction Type, you may want to enter a code such as PPAY to represent a standard patient payment or another code your organization uses for tracking specific payment types. Then, enter a description in the Description field, if applicable, to provide additional context for the transaction.   

Click Save.

Create an adjustment transaction

An adjustment transaction refers to a change made to a patient's account balance that reflects a modification in the amount owed. This could occur for several reasons, such as:

• Insurance Adjustments: After an insurance claim is processed, the insurance company may deny certain charges or apply a discount, leading to a reduction in the amount the patient owes.
• Patient Discounts: If a provider offers a discount for prompt payment or for uninsured patients, this would be recorded as an adjustment.
• Payment Errors: If an error is found in previous billing, such as double billing or incorrect coding, an adjustment may be necessary to correct the account balance.
• Contractual Obligations: Some providers have agreements with insurance companies that specify the amount they can collect from patients, which may require adjustments to the billed amount.

To create a new Adjustment Transaction, click the Utilities icon on the top right. 

Select Practice Setup and click Adjustment Transactions.

Select New Adjustment Transaction in the top right of the screen. 

Choose one of the following Master Transaction types:

• Insurance Adjustment: Choose this option when the adjustment applies to an insurance claim rather than the patient’s direct balance. This type is typically used when an insurance company denies or reduces payment for a service, applies a contractual write-off, or makes a correction to a previously processed claim. Use this when the adjustment affects the amount the insurance is responsible for paying.

Example: The billed charge for a procedure is $200, but the insurance contract allows only $150. You would post a $50 Insurance Adjustment to reflect the contractual write-off.

• Patient Adjustment: Select this option when the adjustment applies directly to the patient’s balance. This type is used for activities such as applying discounts, correcting billing errors, waiving a fee, or writing off an uncollectible patient balance. Use this when the adjustment changes what the patient owes directly.

Example: If a patient is granted a $25 courtesy discount on their bill, you would post a Patient Adjustment to reduce their outstanding balance accordingly.

If you’re creating an Insurance Adjustment, be sure to select the appropriate Denial Code from the Claim Adjustment Reason dropdown list. Denial codes are standardized codes used to explain why all or part of a claim was not paid by the insurance company. Selecting the correct code ensures that the reason for the adjustment is properly documented and can be accurately reported or appealed if needed. 

For example, you might select a denial code indicating that a service is not covered by the patient’s plan, that additional information is required, or that the charge exceeds the contracted rate. Recording the correct denial code not only keeps your claim records compliant with payer requirements but also helps your team track denial trends and improve claim processing efficiency.

If you’re creating a Patient Adjustment, you can either select an existing Denial Code from the Claim Adjustment Reason dropdown list or create your own custom code by entering a unique name in the Code field. If applicable, provide additional context by entering a detailed explanation in the Description field. Creating your own code is useful when the adjustment reason doesn’t fit any of the standard claim adjustment codes provided.

For example, you might create a custom code like “PTDISC” for a Patient Courtesy Discount or “ADMINERR” for an Administrative Error Correction. Including a clear description ensures that anyone reviewing the account later can easily understand why the adjustment was made, improving internal tracking, reporting accuracy, and audit readiness.

Click Save.