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How to Reduce Days in A/R: A Practical Guide

By Dynamic Medical Billing Solutions · Updated October 13, 2026 · 6 min read

Days in accounts receivable (A/R) tells you how long, on average, it takes your practice to get paid. When the number creeps up, cash gets tight even though the schedule is full. This guide explains how to calculate it correctly, what to aim for and the routines that bring it down.

What Days in A/R Measures

Days in A/R (also called days sales outstanding, or DSO) estimates how many days of charges are sitting unpaid. A low number means claims are paid quickly. A high number means money is waiting on payers or patients, and some of it may never be collected.

Formula:

Days in A/R = Total A/R balance ÷ average daily charges
where average daily charges = net charges over a period (commonly the last 90 days) ÷ the number of days in that period.

Example (illustrative): if your total A/R is $360,000 and you billed $540,000 in the last 90 days, average daily charges are $6,000, so days in A/R = 360,000 ÷ 6,000 = 60 days.

Use the same period and method every month. The trend matters more than any one number.

What Is a Healthy Number?

Targets vary by specialty and payer mix, but commonly cited goals are:

• Days in A/R around 30–40 is generally considered healthy for many practices; numbers above about 50 usually point to a problem.
• A/R older than 90 days should be a small share of the total, with many practices aiming for roughly 15–20% or less.
• A/R by payer matters: a single slow payer can distort the average.

Treat these as starting points, not rules. A practice with a high share of self-pay patients or workers' compensation claims will run higher than a Medicare-heavy primary care practice.

Always Look at the Aging Report, Not Just the Average

The average hides the story. Run an A/R aging report by payer and break it into buckets: 0–30, 31–60, 61–90, 91–120 and 120+ days. Then ask:

• Which payers hold most of the 90+ balance?
• How much is insurance A/R versus patient A/R?
• How much is tied to denied claims that nobody has worked?
• How much is in claims that were never submitted, or are stuck in the scrubber?

Money in the 0–30 bucket is normal. Money older than 90 days has a sharply lower chance of being collected, and timely-filing and appeal deadlines are closing.

Seven Routines That Lower Days in A/R

1. Submit claims within 24–48 hours of the visit. Every day between the date of service and submission adds directly to A/R days. Set a daily charge-entry deadline and track lag days.
2. Submit clean claims. Verify eligibility, capture complete demographics and run a claim scrubber so claims are accepted first time. See our guide to reducing claim denials.
3. Confirm claim acceptance. Check the clearinghouse report for rejections every day. A rejected claim never reached the payer, and the clock keeps running.
4. Follow up on unpaid claims on a schedule. Most commercial claims should be paid in a few weeks. Check status at about 30 days, then again regularly, using the payer's portal rather than waiting on the phone.
5. Work denials within days. Post, categorize and correct or appeal denials quickly, before appeal deadlines pass.
6. Post payments daily through ERA/EFT and reconcile deposits so underpayments are visible. Compare payments with the contracted fee schedule; underpayments are common and often go unnoticed.
7. Bill patients early and clearly. Collect copays at check-in, send statements promptly after insurance adjudicates and offer online payment and payment plans. Patient balances tend to age quickly if left.

Build a Weekly A/R Meeting

Thirty minutes a week with the biller and practice manager is enough: review the top ten largest unpaid balances, any payer with a rise in aging, claims within 30 days of timely filing and any recurring denial reason. Assign a person and a date to each action. A/R is reduced by many small follow-ups rather than a single fix.

Common Mistakes That Keep A/R High

• Waiting for a monthly report before looking at the aging.
• Writing off small balances so the report looks better without fixing the cause.
• Resubmitting claims without correcting the problem, which leads to duplicate denials.
• Treating all payers the same. Slow payers need a specific follow-up routine.
• Ignoring patient balances because collecting feels awkward.
• Leaving claims with no recorded next action.

When to Bring In Help

If your A/R over 90 days keeps growing, if your biller is working only on new claims and nobody has time for old ones or if a staffing gap has created a backlog, dedicated follow-up capacity is often the quickest fix. Our A/R recovery services work the aged claims, while denial management addresses the cause. For a broader view, see revenue cycle management, or read how in-house and outsourced billing compare.

A 30-60-90 Day Plan to Bring A/R Down

First 30 days: stabilize. Run the aging report by payer and age bucket. Confirm that every claim from the last 60 days was actually submitted and accepted. Fix the daily routines: charge entry within 48 hours, daily clearinghouse rejection review and daily payment posting. Assign owners for the five largest payer balances.

Days 31 to 60: clean up. Work the 61 to 120-day balances, starting with the largest and the ones approaching filing or appeal deadlines. Categorize every denial by root cause, and fix the top two causes at the source, whether that is eligibility checks, authorization tracking or a specific coding edit. Begin statements for patient balances on a regular schedule.

Days 61 to 90: sustain. Start the weekly A/R meeting, set targets for days in A/R and the share over 90 days, and report them monthly. Review underpayments against contracted rates. Decide whether older balances that cannot be collected should be written off according to a written policy. By the end of 90 days most practices can see the trend clearly, and the cash effect shows in the following months.

Frequently Asked Questions

What is a good days in A/R number?

Many practices aim for roughly 30 to 40 days, and numbers above about 50 usually signal a problem. The right target depends on your specialty and payer mix, so track the trend and compare each payer's aging.

How often should I review my A/R?

Review the aging report weekly and run a full review monthly. Look at A/R by payer and by age bucket, and focus on balances approaching timely-filing or appeal deadlines.

What is the difference between days in A/R and A/R over 90 days?

Days in A/R is an average that shows how long collections take overall. A/R over 90 days is the share of balances that are old, which are harder to collect. You need both: the average can look fine while a large old balance sits unworked.

Does patient A/R count?

Yes, but track insurance and patient A/R separately. They need different processes: payer follow-up and appeals for insurance, and clear statements, online payment and payment plans for patients.

How long should I wait before following up on a claim?

Check the claim status after a couple of weeks and follow up on a fixed schedule from then on, based on the payer's usual turnaround. Do not resubmit a claim that is still in process, as that creates duplicate denials.

When should I write off a balance?

Write off only after the claim has been properly worked, corrected or appealed within the deadlines, and follow your written policy and payer contract. Do not write off balances to improve a report, because that hides the cause.