Articles · The money side
The five numbers every clinic owner should read monthly
Most owners open their practice management report, look at revenue, and close it. Revenue is the least useful number on the page. Here are the five that actually tell you whether your practice is healthy, and how to read each one.
Why revenue is the wrong headline
Revenue on your software report is usually what you billed, or what you expect to collect. For running the practice, treat it as a forecast; your accountant's revenue is a different, properly defined number. The payer has not sent most of the payments yet, and some of the expected amount will never arrive. Run your practice off that number and you are steering by a promise. The five numbers below start from what is real and work outward, so the picture you manage by matches the money you actually have.
1. Cash collected
Not billed. Not expected. What landed in the bank last month, tied to real deposits. This is the one revenue number you can trust, and it is the one number the software is least eager to show you plainly. Read it first, every month, and read the trend across the last several months, because one slow month can be noise and a run of them is a signal. A single very bad month is its own emergency.
2. Collections per visit
Take the cash you collected and divide it by the visits you delivered. That is what a visit is actually worth to you after every contracted rate, denial, and write-off. It folds payer mix and volume into one number, which means it moves when either of them does: a payer paying less than it used to, payments landing later than the visits they belong to, more cash-pay or fewer high-rate visits in the mix, patient balances going uncollected, or a takeback. When it drifts down while your schedule stays full, check the payment lag first, then the rates, and catch either in a month, not at year end.
3. Days to get paid
The gap between the visit and the money. Count the average days from when you see a patient to when the payment for that visit hits the bank. A healthy practice gets paid on a predictable clock. When the clock stretches, cash tightens even though nothing looks wrong on the schedule, and a growing lag is often the first sign a payer changed how it processes your claims.
4. Money stuck, and aging
Every practice has claims and balances waiting to be paid. The number that matters is not the total; it is how old the pile is getting. Watch the share of what you are owed that has sat past sixty and ninety days. Old money is money going cold: past the appeal or timely-filing window, a claim you could have collected usually becomes a write-off, and no one sends a memo when that happens. Medicare and some contracts allow a late filing for specific reasons, so ask before you write one off.
5. Deposit match
Of the payer dollars that hit your account, what share can you tie to a specific payer and a specific remittance? Few owners have this number, and it is the foundation for the other four. Until nearly every deposit ties out, your collected figure is an estimate and everything built on it wobbles. We wrote a whole piece on this one: your EMR says you got paid, your bank might disagree.
How to actually use them
You do not need a dashboard to start. Once a month, write these five down and put them next to last month's. You are not looking for perfection; you are looking for the one line that moved the wrong way, so you can ask why while the problem is still small. Owners who catch problems early tend to look at the same numbers on the same day every month.
These are general finance ideas, not accounting or tax advice, and the right benchmarks vary by practice. Your numbers will differ.
Want numbers like these landing in your inbox every week?
That is the Back Office retainer: we reconcile your deposits to the bank each month and hand you these numbers with the exceptions listed, so you read them instead of chasing them. See a sample report, or book a call and we will read your own.