How do I assess my AR?

You can’t improve what you don’t measure. A good place to start is by measuring Days in Accounts Receivable, which is the average number of days it takes for your practice to collect due payments. To calculate days in AR, total the charges posted over the last six months; then, divide that number by the total number of days in those six months. This number will be your average daily charges. Next, divide your six-month total charges by the average daily charges. The result is your days in accounts receivable.

Now try measuring the percentage of accounts receivable in each “aging bucket” (i.e., 0 – 30 days, 31 – 60 days, 61 – 90 days, and so on). To calculate it, you’ll first need a report showing the dollar amount of AR in each aging bucket. Now, simply determine what percentage of the total AR sits in each bucket.

Your billing company should be providing these reports for you monthly. If they’re not, ask for them. This information will go a long way in helping you monitor the performance of your billing department. (Of course, these are simply outcome indicators—a mere snapshot into a report card.)

And remember, if these reports are not where you want them to be, ask questions. Find out what can be done to move your AR in the right direction. Contact us at for a complimentary practice assessment.