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What Is Days In Accounts Receivable?

Description:

This widely-used metric provides a number showing the practice or provider accounts receivable balance compared to your practice or provider daily charges.

Why is This KPI Important?

This KPI allows the practice to monitor how well the billing cycle is working. The theory behind this KPI is it tells the practice how many days it takes to collect what is owed for the provider's services.

PMI Recommended Frequency to Run this KPI:

Monthly

Formula:

Provider or Practice AR Balance / Average Charges Per Day Over Past 90 Days

Show the Math:

$500,000 / $27,777 = 18.00 Days

How Should I Track It?

This KPI can be tracked using an Excel spreadsheet by Practice and/or Billing Department.