Wiki How to calculate days in A/R

[staceyb1977]

Hello,

I am hoping someone will be able to help me. Does anyone have any information that may help me to calculate my days in A/R. We are a family practice group.

Thank you,

Stacey

 

[Cynthia Hughes]

Days in A/R

The most common way of figuring days in accounts receivable is to take your total amount of current accounts receivable less any existing credit balances and divide this by the practices average daily charge total for the time period you determine (some prefer to look at 90 day periods and other use a calendar year). You can determine your average daily charge by dividing your total gross charges for the period by the number of days in the period.

MGMA data for family medicine practices can provide you with benchmarks to compare your practice's aging. Several years ago, the median benchmark was less than 25% over 90 days and high-performing practices had about 12%.

Hope this helps.
Cindy

 

[staceyb1977]

Days in A/R

Thank you Cynthia. When you say to take your total amount of current accounts receivable less any existing credit balances. Are you talking about payments that we have received in the office or our A/R balance?

 

[cyndeew]

Turn-Around Time (ARR) Total A/R divided by Adjusted Charges, multiplied by 30 days

You have to figure your adjusted charges first. Here's the equation for that:

Adjusted Charges = Total Charges minus write-offs and adjustments