Reducing Accounts Receivable (AR) Days is a surefire way to optimize your revenue cycle. However, finding ways to reduce AR days might easily slip your mind when you have a million things to do to ensure the best patient care. In this article, we show how you can take advantage of technology to do it easily and effectively.
What are Account Receivable days?
Accounts receivable refer to the payments owed by customers to a company. In the medical field, these are mostly the payments owed by patients to medical practice. When talking about account receivable days, that refers to the number of days a patient invoice is left outstanding before it gets collected.
The goal of measuring the number of days is to determine the effectiveness of credit and collection efforts of the medical practice. It also shows the company’s ability to collect payments from patients in a timely manner.
Here’s how you calculate account receivable days,
Number of days in the year x (Accounts receivable ÷ Annual revenue)
How to reduce accounts receivable days with technology?
The higher the account receivable days go, the more money gets stuck outside of the business. So, trying to lower this value is the best choice financially. Thanks to the latest technological advancements, the process of lowering the accounts receivable days has become a bit simpler. For instance, here are a few ways to reduce accounts receivable days with technology.
- Accounts Receivable (AR) Automation
This is done by using the latest technologies to streamline and automate the AR process. The usage of digital tools or software eliminates all the manual tasks involved in the process. Therefore, with correct implementation, this will save time, reduce errors, and reduce costs to make things more profitable.
- Predictive AR Management
With technologies like Machine Learning and AI, making intelligent predictions have become much more streamlined. So, by using that, medical practices can predict payment dates, provide payor trends, perform risk profiling, and deliver real-time cash forecasting. This also will give a much better insight into the collection cycle of your business.
- Automating Reminders and Collections
Another way to reduce the AR days is by setting automated reminders and collections. This is a great way to go about the collection process without micromanaging the routine. You can take steps to automatically send reminders of the due dates and late reminders. This will save time and allow you to focus on more important aspects of the business than constantly being on the phone.
Accounts receivable of any practice is an important aspect of the business that can hold large sums of money for long periods of time. So, taking the necessary steps to quickly handle the AR and reduce the AR days is always a wise choice.
If you have any issues with AR, check our small guide above. Also, if you want to know more about the subject or want a medical biller who has the tools to handle any AR situation, contact us at Invoisync. Our expert accountants and advanced tools can easily manage AR days and automate the process to make things easier for you.