Optimal Account Aging
I need to know the recommended distribution of accounts receivable by age for a medical practice. What is considered the optimal range of days outstanding for a medical practice?
Question: I need to know the recommended distribution of accounts receivable by age for a medical practice. What is considered the optimal range of days outstanding for a medical practice?
Answer: The Medical Group Management Association tracks this benchmark by specialty.
"The median for multispecialty groups - as a percentage of total A/R per category - as reported in its Cost Survey, 2004 Report Based on 2003 Data, are:
- 0-30 days in A/R: 51.99%
- 31-60 days in A/R: 15.07%
- 61-90 days in A/R: 8.18%
- 91-120 days in A/R: 5.48%
- 120 days or more: 17.52%
"So, that's a norm, but the faster you can collect the money the more chance you have of collecting it at all. If you can beat this, do. Never rest.
