Journals should only be used for the following 6 reasons:

• Small Balance Write-Off: The account balance is under a certain amount and the Practice is clearing the account. Small balances are written off because the resources needed to collect them, outweigh the value of the balance and therefore can't be justified. Each Practice will use their own discretion in determining what amounts will be written off.
• Settlement Discount: The Debtor/Patient would like to settle their account in full and by doing so the Practice has granted a discount on the account.
• Bad Debt Write Off: No payment has been received toward the account, The Practice has decided that they would rather write the debt off as they have tried all avenues to collect the debt without success. The Practice does not foresee that the payment will be recovered.
• Bad Debt Recovered: Debt that was previously written off, due to non-payment, and the fact the Practice thought that the money would not be recovered, has now been paid.
• Hand Over: The account has been handed over to a third party in order to collect the funds that are owed. The Practice hopes that by paying for third-party collection services, the outstanding funds will be recovered. 
• Interest: A fixed percentage of the outstanding amount based on how long the account is overdue. Interest that has accumulated due to late payments will need to be allocated, to advise where the funds came from.

Please Note: Journals are not to be used to rectify incorrect invoices or receipts. Using Journals to fix errors will cause incorrect reporting, as Journals do not correct turnover and cashflow reports.