Adjustments in DELPHI32 generally fall into the following two categories. The first is simply a correction against the amount you bill for your services. The second is a correction against the amount you receive in the form of payments. Each category is described below:
Adjustments against what you bill - These are very common when dealing with insurance companies and are generally referred to as discounts, write-off's, risk pool or hold harmless amounts. Although you may bill an insurance company $100 (or any other amount) for a date of service they will probably only allow you a negotiated rate of something less than $100. For example, their negotiated rate for a specific procedure code may be $75. In this case, your adjustment (discount/write-off/hold-harmless) amount would be $25. Since, you will never receive the $25 and cannot bill it to the client if you are a provider for that insurance company, you can simply 'write-off' that amount.
Here's another way of viewing these types of adjustments with an extreme example. Suppose that we are going to bill you $1 million for reading this sentence. Obviously, you are not going to pay us anything, but the point is that the $1 million figure is purely theoretical and does not exist in the real world. We cannot physically touch the million dollars as it is simply a figure that we decided to attach to your reading of the sentence. At some point in time, we are going to have to make an adjusting entry against the million dollar charge, effectively writing it off because we will never receive it. The same holds true with the amounts that you bill insurance carriers. You can charge them anything you want but they will only pay you what they "allow" for a given procedure code. The difference between what you bill and what you receive is an adjustment against what you billed (a write-off.) Whether it is a charge or a write-off it is only a figure that exists only on a piece of paper.
Adjustments against what you receive - These are less common, but are simply corrections against the amount that you receive in the form of a payment. A good example of an adjustment against payments received is a refund. In the case of a refund, the client or insurance company overpaid you and at some later point in time you decide (or are asked) to give some of that money back. A less common example might be if you accidentally recorded a payment of $50 and then later discovered that the payment should have been $55. You could make a $5 adjustment against the original payment to correct it instead of deleting the original payment and re-entering it.
Unlike charges and write-off's, payments are physical entities that you can touch. They exist as cash, checks, and possibly credit cards that you can deposit into your bank account. They are what makes the financial world go round and are the only thing that the IRS cares about. In the previous extreme example, billing someone for $1 million has absolutely no consequence on your taxes. If you receive $100 as a payment and refund $10 back to the client, your income would be $90 and the IRS is very interested in this figure. In the context of adjustments against what you receive, the refund of $10 is the physical act of returning cold hard cash (which you can touch) to a client or insurance company because they overpaid you.
These instructions are a jumping off point to all of the various adjustments that can be made in DELPHI32. Before making any kind of adjustment it is important for you to take a moment to understand exactly what it is you are adjusting. As described above, you adjust either what you bill or what you receive.
Below is a list of adjustments that can be made in DELPHI32. You can also reference the section on Financial Theory of DELPHI to see how these transactions fall within the overall framework of the software. Click on the appropriate link for detailed instructions.
Adjustments against what you bill: (Revenue)
Write-off's (very common - basically reducing the amount you bill)
Reverse Write-off's (not common - but basically reversing a previous write-off.)
Note. This can also be accomplished by simply editing the charge for an existing session from the Session History screen but most accountants would "frown" on this practice as there would be no tracking of what happened.
Adjustments against what you receive: (Income)
Refunds (somewhat common - returning money that you have already received)
Adjusting Payments up (very rare - basically increasing a payment that was entered incorrectly)
Adjusting Payments down (very rare - basically reducing a payment that was entered incorrectly)
Adjusting Advances up (same concept as Adjusting Payments Up)
Adjusting Advances down (same concept as Adjusting Payments Down) zzzzz