You’ve heard the saying, “You can’t manage what you don’t measure.” It’s true. Unless you are tracking your costs or calculating your ratios, you don’t know if your organization’s performance is getting better or worse. You can’t manage your process to improve your collection rates.
Here are a few important numbers you should be able to calculate and track:
You can use the following formula:
(Accounts receivable / Total credit sales) x Number of days = Days Sales Outstanding
Compare it to the healthy A/R ranges listed below.
If you see room to improve your collection results, give us a call at 913-338-4790, x205.
COLLECTPlus can help remove the burden of collections. Our four-phase, automated billing and collection system includes an integrated payment portal and call center. Using COLLECTPlus to capture your remaining debt gives you confidence that you are providing your clients every opportunity to pay.
Source: BSM Consulting’s Maureen Waddle and Derek Preece
Quality DME was writing off a lot of patient A/R because they did not have a complete Patient-pay Billing and Collection system. Their staff was responsible for printing and mailing statements but did not have time to make collection calls. So, they used the outside collection company. Without an integration with their collection company, it was challenging to track the payments the collection company received.
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