Written by Reed Tinsley |
June 19, 2007
Some people have a hard time calculating the percentage for net collections because write-offs are sometimes higher than the charges for any given month. This is a timing issue because the EOB doesn't arrive in the office sometimes until 60-90 days after the charge is billed.
This is why you should always use the "average" line to analyze your gross and net collection percentages. Calculating the percentages based on the YTD average for charges and write offs "evens out" the timing issue mentioned above.
About the Author
Reed Tinsley CPA
This article is written by Reed Tinsley, a Houston, TX-based CPA with over 30 years of experience advising physicians and medical practices across Texas and the United States. Reed holds certifications as a Certified Valuation Analyst (CVA), Certified Healthcare Business Consultant (CHBC), and Certified Financial Planner (CFP), specializing exclusively in the healthcare sector. He is a published author, nationally recognized speaker, and trusted advisor to physicians on
accounting & tax,
practice management, and
financial planning.
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