Clients often ask us about the type of information that they should expect from a billing department. It’s easy to find yourself lost in the weeds on this issue. So, let’s take a minute and explain a few key points.
As the CEO of your business, this is a great question to ask yourself. It’s easy to overwhelm yourself with numbers and reports that may not be that important to you as a practice owner.
Let me tell you the numbers that you want to look at:
First, you need to be calculating and analyzing your Collection Ratio. If you do not know how to calculate this statistic, you can check out our previous article on the subject.
Next, you will want to know what your average number of days a bill spends in your receivables account. Look at you’re A/R and see how long it takes from the time you send out a bill until the payment for that bill arrives in your bank account.
From that information, you should be able to figure out what your average collection per visit is and how long it takes for the money to come your way.
Now you are able to add some predictability to your practice.
You’ll be able to use these ratios to calculate how much money in revenue you practice will generate over the next week, the next month, or the next quarter. This gives you better information when you communicate with your suppliers and vendors.
As a provider of outsourced billing departments, we pride ourselves with giving our clients this type of information. Every Monday we send out detailed reports that allow you to quickly see what is going on.
If you handle your billing and collections internally, you should be able to walk into that department on a Monday morning and have these types of questions answered. However, if you are receiving blank stares and excuses, then you need to consider a company that can provide you with this information.
If you find your practice struggling in this area, you may want to reach out and have some questions answered about just how easy it is to unload all this burden from you and your staff.
Let us know if we can help in any way. We’d be happy to show you what you may be missing in your billing department.