Accurate Prediction of Your Practice Revenue, Based on Charges During Previous Months.

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You can build your dream practice! Each day that a claim is not processed, the likelihood of claim payment drops approximately by 1%. So, the percent of AR over 120 defines your billing performance.

Referencing an example from one of our previous videos, if you had charges amounting to $180,000, you would expect to get paid $61,146. Now, how do we use this knowledge to figure out what are you going to get paid next month? Let's assume that this month your charges are $180,000, the previous month the charges were $110,000, and 3 months ago your charges were $140,000.

If we want to know what will be paid the next month, we need to take 46% of $180,000, and then 18% of $110,000, which is $8,000, and then 9% of the $150,000, and then the 6% of the $140,000, for the total of $53,535. Please note that it is important to distinguish between what we are going to get next month, which is the sum of payments received during those periods for the previous 4 months, as opposed to what we expect to get for charges in total of $180,000.

Now you know how to forecast your cash flow next month!