How do I record a part payment in Xero during reconciliation?

Open Find and Match beside the bank statement line, tick the invoice the money belongs to, choose Split, enter the amount of the part payment, choose Split again, then reconcile. Xero applies that amount to the invoice and the outstanding balance still shows on it, so it can be reconciled when the next payment is made.

Why did the funder pay less than I invoiced?

Usually one of three things. The scheme pays costs based on the scheduled fees in its table of costs, up to the maximum listed. The support item carries a price limit the claimed unit price cannot exceed. Or a plan manager's remittance paid the line in part, with the approved lines less the rejected lines equal to the money that arrived. Read the remittance before you touch the invoice, because the first two are the scheme's own price rules and the third is a line worth asking about.

What do I do with the balance left on the invoice after a part payment?

Decide whether anybody can still be asked for it. If yes, leave it outstanding and let it sit on aged receivables. If no, close it with a credit note posted to the shortfall account in your chart, carrying the tax type of the original invoice line. The canonical allied health template leaves that choice to the practice and its BAS agent rather than setting a default.

Should a funder shortfall reduce my revenue or show as an expense?

The canonical allied health template gives it an expense account, Funder shortfalls and write-offs, rather than crediting the clinical revenue line. Revenue then still reads as what the practice billed, and the gap between billing and what schemes pay is visible as its own figure. Crediting revenue instead hides that gap inside the sales total.

Does writing off a shortfall change my GST?

On a funder consultation that is GST free in the canonical template, the write off carries the same tax type as the original line, so there is no GST to reverse. What changes is which figures move: an expense posting leaves reported sales alone, while a credit note against the revenue account reduces them. Confirm the reporting treatment with the practice's BAS agent before setting a policy.

Xero how to

Reconcile a part payment in Xero

On the reconcile tab, open Find and Match, tick the invoice, choose Split, and enter the amount that arrived. Xero records that much and leaves the balance showing on the invoice. The harder part comes next: decide whether the rest is still owed by somebody, or is a funder shortfall the practice will not collect.

Key facts

Where Split sits: Under Find and Match on the reconcile tab, beside the bank statement line³
What Split does: Records the amount that arrived against the invoice you ticked, and the statement line reconciles once the payments match it³
What happens to the balance: The outstanding amount still shows on the invoice, so it can be reconciled when the next payment is made³
The one restriction on the screen: Where a part payment was already recorded on the invoice itself, the amount applied cannot be changed during reconciliation³
Why a compensation scheme pays less: It pays costs based on the scheduled fees in its table of costs, up to the maximum amount listed, and does not pay charges above that maximum⁵
Why an NDIS claim cannot be raised above the limit: The unit price on a bulk payment request cannot exceed the price limit for that support item⁷
The payer treats these as two questions: One scheme's provider answers list a question about not being paid the complete amount for an invoice, and a separate question about not being paid the full amount for the service charged⁶
Where a written off shortfall goes: Account 605, Funder shortfalls and write-offs, an expense account in the canonical allied health template⁸
The tax type on the write off: It mirrors the original invoice line's tax type rather than a fixed Xero code, because a write off is a partial reversal of the original supply⁸
Whether to write off at all: The canonical template leaves that to the practice and its BAS agent, because leaving the balance outstanding is the other valid choice⁸

What Split does, and where it stops

Split is the option Xero puts inside Find and Match for the case where the money that arrived is smaller than the invoice it belongs to. Tick the invoice, choose Split, type the amount that came in, and reconcile. Xero applies that much to the invoice and the outstanding amount stays on it, so the invoice can be reconciled again when the next payment turns up.

On the reconcile tab, beside the statement line that arrived, open Find and Match. (Bank account, Reconcile)
Tick the invoice, bill or expense claim the money belongs to, and nothing else. (Find and Match)
Choose Split, enter the amount of the part payment, then choose Split again. (Find and Match, Split)
Reconcile the statement line. The outstanding amount stays on the invoice, ready for whatever comes next. (Find and Match)
Read the funder's remittance line against what the invoice was raised at, and name which of the three causes produced the gap. (Outside Xero, in the funder's remittance or payment report)
Either leave the balance outstanding against whoever still owes it, or clear it with a credit note to account 605, Funder shortfalls and write-offs, carrying the tax type of the original invoice line. (Sales, Invoices, Awaiting payment, Create and apply credit)

Xero's own article ends after step four, and for a customer paying in instalments that is the whole answer. It is not the whole answer for a health practice, because the reason the money is short usually means no second instalment is coming.

Three reasons a funder deposit arrives short

The three causes look identical in Xero and behave nothing alike outside it. Name the cause from the remittance before touching the invoice, because the cause is what tells you whether anybody still owes the balance.

What made a health funder deposit short, and what the balance is⁵⁷¹⁸

What produced the gap	How to recognise it	What the balance is
A scheduled maximum fee	The scheme publishes a table of costs and pays up to the maximum listed, so the same item is short by the same amount every time	Money on a valid claim above the scheme's listed maximum, which is the part the scheme does not pay
A price limit on the support item	The claimed unit price cannot exceed the price limit for that support item, so a claim above the limit does not go through as charged	A pricing decision that was made before the claim, not a payment decision made after it
A line paid in part on a remittance	The remittance carries lines paid in full, lines paid in part and rejected lines as negatives, and the approved lines less the rejected lines equal the money that arrived	A balance no published price rule refused, so there may still be a payer to ask before it is treated as a shortfall

One scheme puts the distinction in its own provider answers, where a question about an invoice not being paid in full sits beside a separate question about a service not being paid at the amount charged. Two questions, because they have two different causes and two different answers.

Why haven't I been paid the complete amount for the invoice?⁶

A short paid deposit, drawn whole

Here is what the bookkeeper is actually looking at: one insurer payment covering three treatment invoices, two of them paid at what the practice charged and one of them paid at the scheme's scheduled maximum. The deposit reconciles in full. One invoice does not.

Plate 1One insurer payment, three invoices, and the part of the third one that arrived short of what was charged.

The balance is a decision, not a data entry problem

After the split, the practice owns an open balance on a closed clinical event. There are two defensible answers and the canonical allied health template holds both of them open, with a note on the shortfall account asking the practice to settle it with its BAS agent rather than taking a default from the software.

Leaving the balance outstanding

This is the right answer whenever the gap is a gap somebody agreed to pay: a client covering the part their scheme does not, a gap the practice set out before the appointment, or a second funding source that has not paid yet.

The invoice stays open for the balance, which is exactly what Split leaves behind.
Aged receivables read as true, because someone really does owe it.
The revenue was recognised when the service was invoiced and nothing about that changes.
The risk is inertia. A balance nobody chases looks the same on the report as a balance somebody is chasing.

Writing the balance off to a shortfall account

Where the scheme has paid its scheduled maximum and no other party is liable, the balance is not a debt. The canonical template gives it a home: a credit note against the invoice, posted to the shortfall account, which is an expense account rather than a reduction of the clinical revenue line.

Raise the credit note against the original invoice and allocate it, so the invoice closes at the amount the funder paid.
Post the credit note line to the shortfall account named in the template, not to the revenue account the service was billed to.
Carry the tax type of the original invoice line rather than a fixed Xero code. A shortfall write off is a partial reversal of the original supply, so it follows the supply.
Keep the funder and the practitioner on the write off line, so the shortfall shows up in the same reports the revenue does.

The mechanics of the credit note itself are the same ones a clawback uses, and reconciling a credit note covers them. What differs here is that no money moves: the credit note closes an invoice, it does not settle a bank line.

What each choice does to the reported figures

The two answers produce different books, which is why picking one by habit is worse than picking one on purpose. The account the template names for a written off shortfall is an expense account, so a write off posted to it leaves the sales figure where it was. Neither answer changes the GST payable on a funder consultation, because that revenue is GST free in the canonical template to begin with.

Leave it outstanding: revenue stays at what was billed, receivables carry the balance, and profit is unchanged until somebody decides.
Write it off to the shortfall account: revenue stays at what was billed, receivables come down, and an expense appears that a practice owner can read as the cost of billing above what the scheme pays.
Credit note it against the revenue account instead: revenue falls, receivables come down, and the reported sales figure quietly stops matching what the practice actually billed.

A part payment is not the neighbouring cases

Four things look alike on the reconcile tab and want four different Xero objects. Getting this wrong is how a practice ends up with a rounding account holding a consultation.

More money than the invoice is an overpayment, which Xero holds as its own object rather than stretching the invoice to fit.
One deposit that arrived net of a fee is a split bank statement line, where the gross goes to the clearing account and the fee to an expense account.
A claim the funder paid and then took back is a credit note inside a later deposit, netted against that batch before the deposit total is checked.
A claim the funder did not pay at all is not a part payment. Leave its payment out of the match, reopen the invoice, and resubmit the claim.

The part payment that did not need to exist

Some short payments are made at the invoicing desk rather than by the funder. Where a scheme pays a fixed benefit and the practice cannot charge a gap, raising the invoice at the practice's own fee produces a shortfall on each claim, and each one lands in this workflow.

The cheaper fix is upstream: raise the invoice at the benefit the scheme pays, so the claim settles in full and nothing is left to decide. That is a practice management setting rather than a Xero one, and it removes more part payments than any reconciliation routine can.

What Ledger Map does with it

Ledger Map posts one balanced document set per deposit, built from the funder's own remittance, and leaves one exact match in the bank feed for a person to accept. A line the funder paid short is not folded into that match. It is raised as a question, with the two treatments and what each does to the invoice set out side by side.

That is deliberate. The shortfall policy is a practice decision with a BAS agent in it, and the canonical template says so on the account itself, so the product asks rather than picks. How it works walks through the standing map a practice approves before any of this posts, and reconciling a clearing account covers the month end check that catches the shortfalls nobody answered.

Questions

How do I record a part payment in Xero during reconciliation?
Open Find and Match beside the bank statement line, tick the invoice the money belongs to, choose Split, enter the amount of the part payment, choose Split again, then reconcile. Xero applies that amount to the invoice and the outstanding balance still shows on it, so it can be reconciled when the next payment is made.
Why did the funder pay less than I invoiced?
Usually one of three things. The scheme pays costs based on the scheduled fees in its table of costs, up to the maximum listed. The support item carries a price limit the claimed unit price cannot exceed. Or a plan manager's remittance paid the line in part, with the approved lines less the rejected lines equal to the money that arrived. Read the remittance before you touch the invoice, because the first two are the scheme's own price rules and the third is a line worth asking about.
What do I do with the balance left on the invoice after a part payment?
Decide whether anybody can still be asked for it. If yes, leave it outstanding and let it sit on aged receivables. If no, close it with a credit note posted to the shortfall account in your chart, carrying the tax type of the original invoice line. The canonical allied health template leaves that choice to the practice and its BAS agent rather than setting a default.
Should a funder shortfall reduce my revenue or show as an expense?
The canonical allied health template gives it an expense account, Funder shortfalls and write-offs, rather than crediting the clinical revenue line. Revenue then still reads as what the practice billed, and the gap between billing and what schemes pay is visible as its own figure. Crediting revenue instead hides that gap inside the sales total.
Does writing off a shortfall change my GST?
On a funder consultation that is GST free in the canonical template, the write off carries the same tax type as the original line, so there is no GST to reverse. What changes is which figures move: an expense posting leaves reported sales alone, while a credit note against the revenue account reduces them. Confirm the reporting treatment with the practice's BAS agent before setting a policy.

Sources

Open questions

The Xero Central article for this task renders client side and returned an empty document on 3 Sep 2026, so the Split steps here rest on a bookkeeping knowledge base's republication of Xero's help rather than on Xero's own page.
Whether the NDIA short pays a claim at the price limit or refuses it at lodgement is not settled. The June 2025 bulk payment request guide says the unit price cannot exceed the price limit for the support item, which reads as refusal, while the corpus's own mechanics notes describe short payment at the price limit. Both are stated here and neither is resolved.
ndis.gov.au refuses automated fetches, so the price limit rule is taken from the module in this repository that records the June 2025 guide, rather than from a fetch made for this page.
No source read for this page names the reason a plan manager pays a claim line in part. The plan manager guide read here shows lines paid in full, lines paid in part and rejected lines as negatives without saying what produced each one, so the third cause is stated as the pattern on the remittance rather than as an exhausted budget.
The scheme's provider answers page serves its question index but not its answer text, which was still true on 3 Sep 2026. Only the wording of the questions is used here, and no fact rests on an answer nobody could read.
Whether Xero applies a floor to how small a part payment may be, and how a part payment behaves against a lock date, could not be confirmed from any source read for this page.
Whether a written off shortfall on a GST free supply should change the sales figures a practice reports is a question for that practice's BAS agent. This page states what each posting does to the accounts and leaves the reporting judgement open.
No google.com.au ranking, AI Overview or People Also Ask data could be observed for this query on 3 Sep 2026, because the session's search budget was exhausted and the proxy search endpoints returned nothing, so the answer landscape in the brief is inferred from the link graph rather than read.
The deposit drawn on this page is an illustrative insurer payment rather than a practice's data, and the amounts on it are chosen so the arithmetic is visible.

Reconcile NDIS plan manager remittances in Xero
ToTheCent. Retrieved 29 Aug 2026.
secondary
GST and health
Australian Taxation Office. Retrieved 29 Aug 2026. Source updated 13 Jun 2024.
primary
Record a part payment during reconciliation
No Stress Accounting knowledge base. Retrieved 3 Sep 2026.
secondary
Record a part payment during reconciliation
Xero Central. Retrieved 3 Sep 2026.
unverified
Fees and tables of costs
WorkCover Queensland. Retrieved 3 Sep 2026. Source updated 3 Jul 2026.
primary
Provider Connect frequently asked questions
WorkCover Queensland. Retrieved 4 Sep 2026. Source updated 17 Mar 2020.
primary
Bulk payment requests, self help guide for providers
National Disability Insurance Agency. Retrieved 3 Sep 2026. Source updated Jun 2025.
secondary
Allied health by funding source, the canonical template
Ledger Map. Retrieved 3 Sep 2026.
primary
Add a credit note to a customer's invoice
Xero Central. Retrieved 4 Sep 2026.
primary

Review

Last reviewed 3 Sep 2026 by Shane

General information for Australian allied health practices, not tax advice. Confirm a treatment with your BAS agent or accountant before you post it.

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