Days in AR

Days in AR converts the accounts receivable balance into a measure of time: roughly, total AR divided by average daily production. It answers a different question than the raw AR dollar figure does, not "how much are we owed" but "how long, on average, does it take us to actually get paid for work we've already done."

The reason this matters as its own number is that a growing practice can have a growing AR balance and still be perfectly healthy, simply because there is more volume moving through the pipeline. Days in AR strips that scale effect out. A practice holding steady at 25–30 days in AR is collecting efficiently regardless of size; one drifting toward 45 or 60 days has a real problem in claims follow-up, financial arrangements, or patient billing, even if the dollar total looks unremarkable next to the practice's overall revenue.

Track it monthly alongside the collections ratio. The two numbers answer related but distinct questions (collections ratio tells you how much of production eventually gets collected, days in AR tells you how quickly), and a practice that is strong on one and weak on the other still has a specific, findable problem to fix.