Key Performance Indicator: Accounts Receivable (AR) Aging

To classify AR by its age, you must measure the time since a particular service was billed. Payments due for services in the past thirty days are placed in the 0-30 day bucket, those billed between thirty one and sixty days are placed in 31-60 day buckets, etc. While monitoring your AR aging is important, we caution against over emphasis on this indicator. It is easy to manipulate this metric and make it appear as though the billing resource is performing well by writing things off, sending to collections or simply not billing for services that are hard to collect. Continue reading

We recommend billing for every appropriate service rendered, because if you don’t bill for it you’ll never get paid for it! Don’t be afraid to leave AR on the books for as long as it takes to collect the balance. In other words, we favor a healthy revenue per visit indicator over a squeaky clean AR aging.


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