Where patient credit comes from
A patient ends up with credit on their account through one of several routes:
The source matters for attribution. Membership-sourced credit, in particular, is what makes a membership program “earn” revenue: the cycle billing creates the credit (liability), and the credit becomes revenue when spent.
Booking fees converted to patient credit
When Apply Booking Fee as Patient Credit is turned on for a service, that service’s booking fee becomes patient credit after the payment succeeds. For appointments with multiple services, only the booking fees from services with this setting turned on are credited; other booking fees remain ordinary booking-fee revenue. The credited amount appears in Patient Credits, and Accounting Overview moves the same amount out of booking-fee revenue and into Patient Credit Liability. If the booking-fee payment is later refunded, Decoda removes any unused credit tied to the refunded service lines so refunded money cannot still be spent.Credit sold at checkout
Staff can sell a patient credit directly from checkout — add it to the ticket like any other item and take payment for it. The patient walks out with a balance equal to the amount on the line, which is not always what they paid for it. A few things to expect:- The balance appears once the payment goes through, not when the ticket is built. Cash and check payments finish immediately, so the credit is there right away. A card takes a moment to clear before the credit shows up.
- Bank transfers are credited right away, but the bank can still take the money back. A transfer can be returned days after it looks successful. The credit is available in the meantime, and if the transfer is returned Decoda removes whatever is left of it and puts the amount back on the ticket as owed.
- A promotion lowers what the patient pays, not what they get. Run 20% off on a $100 credit line and the patient pays $80 and still receives $100 of credit.
- The automatic cash discount is the exception. Clinics on cash pricing enter the cash price, and that is what loads — the card-price difference isn’t a promotion, so it doesn’t get added back.
- A refund takes back the credit, not just the discounted price. Refund the $80 and the $100 of credit comes off the account. Refund half and $50 comes off, so a promotion can’t be turned into cash.
- A payment that never clears removes the credit. If the card is declined, the payment is cancelled, or a bank transfer is returned days later, Decoda takes the balance back off the account.
- A refund removes the unused balance. Refunding the credit line returns the money and removes the matching credit, so the patient can’t keep both. If they already spent part of it, only what’s left comes off.
Patient credit is never revenue at issuance
Adding credit to a patient’s account doesn’t count as revenue on accrual reporting. The clinic took money in (or already had it) but now owes the patient that value in services or product. Until the patient redeems the credit, it’s a balance the clinic has to deliver against — exactly like an unredeemed package or an unspent gift card. Cash reporting is the one exception, and only when the patient buys credit: cash reporting counts money as it arrives, so the purchase shows up then and the visit they later spend it on doesn’t. Either way the amount is counted once — the two reports just disagree about which day. This is why your Product Sales Breakdown may show $0 revenue for a charge that was paid $200 from credit — the original revenue event was wherever the credit came from (a cycle billing, an overpayment, a refund). Spending the credit is the second half of that transaction, not a new sale.When patient credit recognizes as revenue
Revenue recognizes when the patient spends the credit on a real service, product, or other deliverable — the same moment a card payment would recognize. The mechanics:- A $300 facial billed at checkout, paid $200 from credit + $100 from card → $300 of revenue recognizes on the facial line. The clinic’s bookkeeping records $200 less liability (credit was drawn down) and $100 more cash.
- A $50 product purchased entirely from credit → $50 of revenue recognizes on the product line. Liability decreases by $50.
- Credit applied to a charge that has not yet been delivered (e.g., paying down a package up front) defers the recognition. The credit moves from “patient credit liability” to whatever the new deferred bucket is (deferred package revenue, deferred banked-item revenue). Revenue recognizes when the underlying service is delivered.
Why a $200 credit payment doesn’t add $200 to revenue twice
A common confusion: if a patient pays $200 from credit, isn’t that a separate $200 revenue event in addition to the service itself? No. Here’s the rule Decoda follows: A patient-credit payment is a liability draw-down, not a separate revenue event. The facial is the revenue event. The patient-credit payment is just how the patient paid for it — same as paying with a card, but pulling from a balance the clinic already owed them instead of from outside the clinic. If we counted both the facial and the credit payment as revenue, the books would inflate every time a patient spent credit. Where you’ll see this play out:- Product Sales Breakdown counts the service line, not the patient-credit payment line.
- Accounting Overview shows the credit moving out of liability (credit balance decreases) as the same dollars move into recognized revenue (the service recognizes).
- Payment Breakdown counts the $200 patient-credit payment as a transaction for reconciliation purposes (you can see how patients are paying), but separately tracks revenue elsewhere.
Refunds and credit
Refunds to credit are common — easier to issue than card refunds and often what the patient prefers. The accounting moves both directions at once:
The principle: revenue can only reverse what was actually counted. Credit, in turn, can only become revenue when the patient spends it on something the clinic delivers.
How patient credit shows up on each dashboard
- Product Sales Breakdown: never lists “patient credit” as a line — credit is a payment method, not a product. Items paid with credit appear as their normal line (service, product, etc.).
- Payment Breakdown: lists patient credit as a payment method alongside card, cash, and the rest. Use this to see how much patients are paying from credit vs. other methods.
- Accounting Overview: lists Patient Credit Liability as a balance bucket. Click the bucket to drill into the individual credits contributing to the total (which patient, when issued, source, expiration if any). The Roll-forward column next to the bucket shows the period’s new credit issued, credit spent (Redemption), credit refunded, and credit expired.