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Days in A/R, calculated
The single best health metric for a billing operation: how many days of revenue are sitting unpaid. Two numbers from your reports, one answer, benchmarked.
Current outstanding A/R from your aging report, all buckets
Gross charges per month, averaged over the last 3 months for stability
Your days in A/R WATCH
38 days
Under 35 is healthy for most outpatient practices. 35 to 50 deserves attention. Over 50 means real money is aging toward write-off.
What ten days is worth
$19,737
Cash that would land in the bank if your days in A/R dropped by ten at your charge volume. Not new revenue, just your own money arriving sooner.
Formula: total A/R divided by average daily charges (monthly charges / 30.4). Benchmarks: under 35 days healthy, 35 to 50 needs attention, over 50 urgent, per common MGMA-style guidance for outpatient practices. Specialty mix and payer mix shift what "good" looks like.
The formula, worked
Days in A/R = total accounts receivable ÷ average daily charges. Average daily charges are your average monthly gross charges divided by 30.4 (the average month length). A practice with $75,000 outstanding and $60,000 in monthly charges has average daily charges of $1,974 and days in A/R of about 38: five and a half weeks of work delivered but not yet paid for.
Two habits make the number honest. Average your charges over at least three months so one slow month does not flatter or panic you. And calculate it monthly on the same day, because the trend matters more than any single reading.
What actually moves it
- First-pass acceptance. Every rejection restarts a payment clock that averages 14 to 30 days. Front-end scrubbing is the biggest single lever.
- Eligibility at scheduling. Coverage surprises discovered after the visit add weeks of chasing per claim.
- Same-week denial work. A denial worked the day it lands pays weeks sooner than one found at month-end. Push alerts exist for exactly this.
- Patient balances billed immediately. Statement lag after adjudication quietly adds days across every patient-responsibility claim.
- Watching the 90+ bucket. Days in A/R can look fine while old claims quietly die. Pair this number with your aging buckets and the filing deadlines.