What is a good days in A/R?

What it measures and how it is calculated

Total accounts receivable divided by average daily charges. If you have $300,000 outstanding and average $5,000 a day in charges, that is 60 days in A/R.

Conceptually it answers "how long does it take us to get paid" — but as an average it conceals the distribution, which is where the problems live.

Why the benchmark is less useful than it looks

You will find a lot of published targets for this metric. Treat them cautiously, for three reasons.

• Payer mix moves it a long way. A practice weighted toward fast commercial payers will show a better number than one weighted toward Medicaid, with identical billing quality.
• Charges are not collections. The denominator uses billed charges, which bear only a loose relationship to what you actually collect. Two practices with the same number can be collecting very different proportions.
• An average hides the shape. A practice with everything paid in 45 days and a practice with most paid in 20 days plus a large ancient backlog can produce the same figure. One is healthy and one is not.

The number to watch instead

Percentage of A/R over 90 days. Commonly cited as acceptable under 15–20% and healthy under 5–10%. It is harder to distort, it is directly actionable, and it points at a specific pile of claims rather than an abstraction.

Days in A/R is still worth tracking — against your own history, not against a benchmark. A steady figure that starts climbing is a real signal. The absolute number compared to someone else's practice is close to meaningless.

How to use both together

• Days in A/R rising, 90+ percentage flat → claims are going out more slowly. Check submission lag.
• Days in A/R flat, 90+ percentage rising → new claims are fine but old ones are not being worked. The most common pattern.
• Both rising → capacity. Something has broken or volume has outgrown the team.
• Both fine, collections down → look at underpayments and patient balances, neither of which appears here.

For reading the underlying report, see how to read an aging report.