If you’ve been following along with our series on daily accounting tasks for dental practices, you’re likely already tackling the first two tasks: balancing your day sheet and ensuring claims are submitted within 24 hours. These tasks form the foundation of a streamlined workflow. Today, I want to discuss a third task that, while optional, can significantly improve the accuracy of your records: understanding Dentrix ledger allocations and why they matter.
Listen to full episode on SoundCloud
Listen to full episode on Apple Podcast
Ledger allocations are crucial if you want accurate patient ledgers, clean accounts, and meaningful provider AR (accounts receivable) totals. Imagine this: Little Johnny’s ledger shows a $100 balance, while his dad’s ledger has a $100 credit. Or worse, your provider AR report lists inactive providers with massive credit balances. Without proper allocations, your reports may misrepresent the financial state of your practice, creating stress and inefficiency.
Why Do Ledger Allocations Go Wrong?
Let’s break down how ledger allocations can become problematic. When a patient makes a payment, Dentrix defaults to allocating the entire amount to the primary provider listed in their account. For example, if a patient’s ledger includes $50 for an exam attributed to DDS-1 and $150 for a cleaning attributed to a hygienist, the system may allocate the full $200 payment to DDS-1. As a result, DDS-1’s account builds a credit, while the hygienist’s balance remains unpaid.
Over time, this misallocation leads to significant discrepancies. Primary providers may accumulate large credit balances while hygienists’ production remains unsettled. If left unaddressed, these issues can snowball, making it difficult to accurately track and resolve balances years down the line.
The Solution: Embrace Allocations and Trust the System
To maintain accurate ledgers, you need to let Dentrix do what it does best—math. By enabling and adhering to split allocation settings, you ensure that payments are appropriately distributed among providers. Here’s how it works:
- Enable Split Allocations: Adjust your Dentrix settings to split payments by provider. For instance, if a patient pays $200, the system will allocate $50 to the doctor and $150 to the hygienist, ensuring all balances reflect reality.
- Avoid Overriding: One common mistake is manually overriding allocations. For example, if a patient owes $100 for a hygienist visit and $500 for a crown with DDS-2, and they pay $300, the system should allocate $100 to the hygienist and $200 to DDS-2. Overriding this process creates inaccuracies.
- Use Provider Credit Balances Manager Daily: This tool helps you monitor and correct allocations in real-time. Making it part of your daily routine prevents discrepancies from accumulating.
Setting Up for Success
Before implementing allocations, ensure you’re set up for success. You’ll need two adjustment types exclusively for allocations: one for credits and one for charges. These adjustments will balance each other out, ensuring no financial impact on your reports.
For example, if you allocate $50,000 monthly, you should see a $50,000 transfer balance credit and a $50,000 transfer balance charge. These adjustments will appear on your day sheet but won’t clutter patient billing statements, keeping communication with patients clean and professional.
Cleaning Up Historical Allocations
If your ledgers require a cleanup before you can begin daily allocations, prepare for a one-time project. Historical balances may include credits for providers who left the practice years ago. Trust Dentrix to resolve these accurately by redistributing payments to outstanding accounts receivable. It’s essential to “trust the process” and let the system handle the math.
Why Accurate Allocations Matter
Understanding Dentrix ledger allocations and why they matter isn’t just about numbers; it’s about creating a stress-free, efficient workflow. Accurate allocations mean:
- Patient ledgers reflect reality, eliminating confusion.
- Provider AR totals are meaningful and actionable.
- You’re equipped with reliable financial data for decision-making.
Final Thoughts
If this process feels overwhelming, remember you’re not alone. I’ve developed comprehensive resources to help you master Dentrix ledger allocations and maintain accurate records. Reach out to me directly at [email protected] or explore our membership for step-by-step guidance.
By understanding Dentrix ledger allocations and why they matter, you’re investing in a smoother, more productive practice. Trust the system, and watch your workflow transform. Let’s make your dental team the high-performing unit it deserves to be.
