What Is Days In Accounts Receivable?

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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.

 

 
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Paul Vanchiere, MBA

For over 15 years, Paul has dedicated himself exclusively to addressing the financial management, strategic planning, and succession planning needs of pediatric practices. His background includes working for a physician-owned health network and participating in physician practice acquisitions for Texas's largest not-for-profit hospital network, giving him a distinctive insight into the healthcare sector. Paul is adept at conducting comprehensive financial analysis, physician compensation issues, and managed care contract negotiations. He established the Pediatric Management Institute to offer a wide range of services tailored to pediatric practices of all sizes and stages of development, with a focus on financial and operational challenges. Additionally, Paul is actively involved in advocacy efforts to ensure healthcare access and educational opportunities for children with special needs.

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