Take a look at the metrics that will help your collections grow. Watch this short video to learn more about the metrics shown in the Collections Board:
AR (Accounts Receivable) Days
What is this?
AR (Accounts Receivable) Days is like lending money to a friend and waiting to be repaid. It shows the average number of days your dental practice waits to receive payment from patients and insurance. A low number means quick payment; a high one may signal delays.
Formula: AR Days = Avg. AR / Avg. Net Daily Production
Note: Data will not appear in this metric until Dental Intelligence has been actively syncing for 30 days. This metric is not based on historical data pulled from your Practice Management Software, this is based on cumulative data.
What to Watch Out For:
Data Delays: AR Days won’t appear until Dental Intelligence syncs with your system for 30 days. It builds from the day you start using Dental Intelligence, rather than looking at old data.
Production Settings: This metric is calculated with the Net Production setting that you have selected within Dental Intelligence.
Why is this important?
Understanding Production and Payments: It’s like a report card on how much work your practice does and how fast patients pay.
Patient Satisfaction and Credit Issues: AR Days might uncover patient happiness levels or if you’re extending credit unwisely.
Cash Flow Trends and Patterns: Monitoring changes in AR Days helps predict potential cash flow problems.
Seasonal Variations: Regular monthly changes may be normal, but erratic patterns might be a warning sign.
In essence, AR Days is a snapshot of your practice’s financial health, providing insights into payment speed, patient satisfaction, and financial stability. Like waiting for a friend to repay a loan, this metric tells you if you’re being paid in a timely manner and can alert you to potential issues. It’s a practical tool to help you make informed decisions and stay ahead of problems.
AR (Account Receivable) Ratio
What is this?
AR (Accounts Receivable) Ratio is like a report card for how well your dental practice is handling payments from patients. It tells you if you’re collecting money on time or if there are problems. Let’s break it down:
You find the AR Ratio by taking the average amount of money patients owe you (Average Accounts Receivable) and dividing it by the money you expect to collect (Net Production) during the same time.
Formula: AR Ratio = Average Money Owed By Patients / Money You Expect to Collect
Note: Data will not appear in this metric until Dental Intelligence has been actively syncing for 30 days. This metric is not based on historical data pulled from your Practice Management Software, this is based on cumulative data.
What to Watch Out For:
Hidden Problems: Since it’s an average, some details might be hidden. Think of it like grading a group of students; one failing grade can be offset by all the others doing well.
Data Delays: It will take 30 days of actively syncing with your system to show this metric. Unlike some other numbers, it doesn’t look at the past data stored in your Practice Management Software. Instead, it builds up over time using ongoing, cumulative data. Think of it as starting a fresh count from the day you begin using Dental Intelligence, rather than using old scores.
Why is this important?
Check Your Efficiency: The AR Ratio helps you see if you’re good at collecting money that patients owe.
Look at the Big Picture: Tracking this number over time lets you see trends, like if you’re getting better or worse at collecting payments.
Understand Your Money: It can help you figure out if the way you handle credit is helping or hurting your business.
Past Performance: You can look at the AR Ratios for the last 36 months to understand how things have changed.
In summary, the AR Ratio is like taking your dental practice’s financial temperature. It helps you understand how well you’re managing money owed by patients. It’s not just about one number; it’s about seeing how that number changes and what it means for your practice.