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A/R Days: A Simple Layman's Explanation
A/R days is a calculation to help you compare your current receivables to the national benchmarks of your business. It is used in medical receivables extensively to measure the effectiveness of your collection and billing operation. Each subgroup of your type of business may have its own benchmark. For most hospitals the ideal A/R days is 40 or less. You can calculate your A/R days by dividing your average monthly outstanding A/R by the average daily income to your business.
Average A/R $1,000,000.00
Average Daily Income / deposits $25,000.00
A/R Days = 40
Samples for Pediatric Accounts receivable
http://www.pcc.com/benchmark/ardays.php
Physicians Standards Days in A/R
http://www.physiciansnews.com/business/1101.html
Top 10 questions for rural, community hospital CFOs
http://www.findarticles.com/p/articles/mi_m3257/is_4_59/ai_n13621277
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