Accounts receivable (A/R)

Accounts receivable is every dollar you have billed and not yet been paid. Each claim sent to a payer and each statement sent to a patient adds a balance to A/R. Payment posting reduces it. Contractual adjustments reduce it too, because that part of the charge was never collectable under the payer’s contract, and so do write-offs for bad debt or timely filing. What remains is the open balance the practice is still owed, split between insurance A/R and patient A/R and sorted into aging buckets by the date the charge was entered or the claim was first sent.

A/R is the first number an owner looks at and the easiest to misread. A large balance is not bad on its own; a busy practice that bills a lot will carry a lot. What matters is how fast it turns into cash and how much of it is old. Days in A/R, the aging buckets and the net collection rate all read from the same A/R data, so a payment posted to the wrong account or a denial recorded as an adjustment distorts all three at once.

The mistake is treating A/R as one number. Insurance balances and patient balances need different work. Insurance A/R needs follow-up on unpaid claims, denials and underpayments, with payers that answer on their own timetable. Patient A/R needs statements, payment plans and a decision about when to stop. A report that lumps them together hides which side is growing and lets old claims age past the timely filing or appeal window while the total looks stable.