Accounts Receivable Days (A/R Days)
A/R days measures how long, on average, it takes a practice to collect payment after a service is billed. Formula: total accounts receivable divided by average daily charges. The MGMA benchmark range is 30–40 days; above 50 signals a revenue cycle problem worth auditing.
- Benchmark
- 30–40 days (MGMA); best-in-class under 30
- Formula
- Total A/R ÷ average daily charges
- Warning level
- 50+ days
- Review cadence
- Monthly, alongside the aging report
What does A/R days actually tell you?
A/R days converts your entire receivable balance into one intuitive number: how many days of revenue are sitting uncollected. It is the practice's cash-flow thermometer. When denials rise, follow-up slips, or the front desk stops collecting at check-in, A/R days is where it shows up first — usually a month before the bank balance feels it.
How do you calculate days in A/R?
Take total A/R and divide by average daily charges. Compute average daily charges over a trailing 90 days so one big surgery week does not distort the figure.
Worked example: total A/R is $310,000. Gross charges over the last 90 days were $810,000, so average daily charges = 810,000 ÷ 90 = $9,000. A/R days = 310,000 ÷ 9,000 = 34.4 days — comfortably inside the benchmark range.
What counts as a good A/R days number?
MGMA data puts well-run practices at 30–40 days, with best-in-class operations under 30. Specialty and payer mix move the goalposts: a primary care office with heavy commercial insurance should sit near the bottom of the range, while a practice with significant workers comp or personal injury volume will legitimately run higher.
The trend is the real signal. A practice that drifts from 36 to 44 over two quarters has a process leak — rising denial rate, unworked clearinghouse rejections, or follow-up staff stretched thin. Your aging report tells you exactly which bucket the drift is coming from.
How do you bring A/R days down?
- Fix the front of the funnel. A higher first-pass resolution rate is the fastest structural fix — claims that pay first try never age.
- Work denials within 7 days. Every week a denial sits, appeal deadlines burn down. Use the appeal deadline calculator so nothing times out.
- Collect patient responsibility at the visit. Patient balances collected at check-in have close to 100% yield; statements mailed later collect a fraction of that.
- Split A/R by payer monthly. One slow payer often accounts for most of the drift, and that conversation belongs with the payer rep, not the billing team.
Frequently asked questions
MGMA benchmarking puts a healthy range at 30–40 days, varying by specialty and payer mix. Under 30 is best-in-class. Consistently above 50 days means cash from January visits is not arriving until March, and usually points to denials, slow follow-up, or unworked rejections.
Divide total outstanding accounts receivable by average daily charges (gross charges for the last 90 days divided by 90). Example: $310,000 in A/R with $9,000 average daily charges gives 34.4 A/R days. Run it monthly and trend it; the direction matters more than any single month.
Exclude credit balances when you calculate, or at least calculate both ways. Credits artificially lower total A/R and can hide a worsening trend. Many PM systems net credits automatically, which is one reason two reports from the same system can disagree.
Not always. A payer mix heavy in workers comp, personal injury, or slow state Medicaid programs naturally runs longer. That is why you should benchmark against your own specialty and split A/R days by payer before blaming the billing team.
Sources & further reading
Reviewed by the ImmediCare Solutions RCM team
Certified billers and coders handling claims across 50+ specialties nationwide. This entry is reviewed against current payer policy and CMS rules. Last review: Jul 5, 2026.
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