Reducing Rates After Billing/Payments and Issuing Credits

Question

I have what seems to be a complex issue, which i have provided background info for below: 
 
 I have been billing a matter to a client - hourly at higher rate i will call "Rate X". ($450) 
 We decided later (after billing and receiving payments at Rate X) to reduce the hourly rate to "Rate Y". ($395) 
 An insurance carrier agreed to pay a portion of that hourly rate, "Rate Z". ($320) This results in our client only being responsible for a fraction of the actual bill after reduction to Rate Y. ($75) 
 
 So, i need to figure out how to do the following: 
 
 Issue a credit to our client for the overpayments for the reduction between Rate X to Rate Y 
 Apply the Funds currently held from the insurance carrier at Rate Z.

I am unsure what needs to be done to accomplish the above and would appreciate any and all input. 
 Thanks!

Nancy Duhon · Answer

Depends a little bit, and the following is a bit off the cuff.....but: 
 Are you going to continue to bill this project under the new Rate Y, AND continue to split the bill between the client and Insurance Co? Do you need to keep track of how much each owes you going forward? 
 Scenario 1: NO, billing is all done, just need to apply the credit and Ins Co $$ and get the client to pay remainder. 
 - Apply the Ins Co $$ as a regular payment with a nice description of same 
 - Create a Credit (or Write Off) on original Client for the total difference in rate that has already charged. 
 -That will leave a remainder that is the client's portion at the lower rate. 
 Scenario 2: YES, billing wll continue at new/lower rate and want to track the two balances for each 
 - Change the rate rules to make sure new slips are billed at Rate Y going forward. 
 - Create a second Timeslips Client entity to keep track of what the Ins Co will owe/pay, and set up a Split Billing Rule to have the new charges at Rate Y be split between original Client Account and Ins Co. 
 - Create a Credit (or Write Off) on original Client for the total difference in rate that has already charged. 
 - Create a second Credit (or Write Off) for how much the Ins Co is going to pay of the total due at the new rate (I would do a second credit because it will just be easier to follow and understand later) 
 - That should leave the Original Client with their own balance due. 
 - On the new Insurance Company client. Issue an Invoice A/R transaction to charge their account for the amount you credited the Original Client above. I.e, previously billed, but going to be paid by Ins Co. 
 -Issue a payment on the Ins Co account to pay the previous balance. 
 Hope that helps. 
 Nancy Duhon, Esq. Duhon Technology Solutions, LLC Master Certified Consultant for Sage Timeslips Providing individual Consultations and Third Party Remote Desktop Support - including older/unsupported versions. 404-325-9779 duhon@duhon.biz

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