Tips to Better Manage Your Accounts Receivable
Why it must be less than 50% of your average monthly production!
The average general dental practice, taking insurance, receives approx. 50% of their income from insurance. With electronic claims, most insurances pay within one week or less.
If the practice were collecting the patient’s portion at time of service, then the only outstanding balance would be the remaining outstanding insurance. On this basis, the Accounts Receivable would be significantly less than 50% of the average monthly production.
Example: If you produced $100,000 per month and were collecting 50% from insurance, then insurance would pay $50,000. If you were able to collect 50% of the patient’s portion at time of service or $25,000, then receivables would be $25,000 or 25% of monthly production.
Collecting on this basis means that your Accounts Receivable will be collectible on a timely basis and cash flow will not be a hardship.
Copyright. The Richardson Group