Let’s be clear, the system that we use to pay doctors is broken and ridiculous. We all agree on that. But it’s the system we’ve got and we need to get better at keeping tabs on our money. A key tool you can use to find out there may be a problem that is losing you money is your accounts receivables report. Every accounting program can produce these reports that show how much money owed to you. They’re organized by time like this:
- 0-30 days
- 30-60 days
- 60-90 days
- 90-120 days
- 120+ days
You should review your A/R at least twice a month. The 0-30 day number should be as big as it can be. This reflects your current business, which you want to be as big as possible. That’s why you market your practice.
- 30-60 days should drop off to no more than 25 percent of your total A/R.
- 60-90 days should be less than 10 percent.
- 90-120 days should approach 0 percent.
- 120+ days must be 0 because you are unlikely to ever collect this money owed to you.
Roll up your sleeves and look at the accounts that aren’t getting paid. Find out why and fix the problems. It’s your money and you worked hard for it. Once you get this under control, you’ll sleep better at night.
Come to the AAPPM Meeting in Ft. Lauderdale in November to learn more about managing your practices finances. If you don’t sort this out, no one else will and can cost you hundreds of thousands of dollars in your career. That money could be used to build your retirement instead.