Get Your A/R Days Under 25 Before Year-End: The Cash Flow Sprint That Transforms Your Practice
Cash is king in any business, but in optometry practices, cash flow problems are rarely caused by lack of revenue. They're caused by money sitting in accounts receivable for weeks or months—services you've already provided, claims you've already submitted, but payments you haven't yet received.
Every day your money sits in accounts receivable is a day you can't use it to pay staff, cover rent, invest in equipment, reduce debt, or take home as owner compensation. It's essentially an interest-free loan you're giving to insurance companies and patients—and unlike a real loan, there's no guarantee you'll ever collect it all.
The longer money sits in A/R, the less likely you are to collect it. Claims denied at 90 days are harder to appeal than those caught at 30 days. Patient balances unpaid for six months are significantly harder to collect than those followed up on immediately.
Most optometry practices operate with A/R days in the 35-50 range, meaning it takes 35-50 days on average from the date of service until payment is received. This feels normal because it's common—but it's also costing you thousands in delayed cash flow and lost revenue every month.
The most financially successful practices operate with A/R days under 25. Some achieve under 20. This isn't magic or luck—it's systematic execution of three fundamental disciplines: collecting at checkout, following up relentlessly on outstanding claims, and posting payments daily to surface problems quickly.
With six weeks left in 2025, you have time to dramatically improve your A/R days before year-end. Let's build the system that gets you there.
What Are A/R Days (And Why Should You Care)?
Accounts Receivable Days (also called Days Sales Outstanding or DSO) measures how long it takes, on average, to collect payment after providing services.
The formula:
A/R Days = (Total Accounts Receivable ÷ Average Daily Charges)
Breaking this down:
Total Accounts Receivable: The total dollar amount patients and insurance companies owe you right now for services already provided. Pull this from your practice management system's A/R aging report.
Average Daily Charges: Your average daily gross charges. Calculate this by taking total charges for the past 90 days and dividing by 90, or use a monthly average.
Example calculation:
Total A/R: $65,000
Monthly charges: $75,000
Average daily charges: $75,000 ÷ 30 = $2,500
A/R Days: $65,000 ÷ $2,500 = 26 days
This practice's money sits in A/R for an average of 26 days before being collected.
Why this matters:
Cash flow impact: If you have 40 A/R days instead of 25, you're essentially operating with 15 days' worth of revenue locked up and unavailable. For a practice generating $75,000 monthly, that's $37,500 in cash that could be in your bank account but isn't.
Working capital: High A/R days means you need more working capital (cash reserves) to cover operating expenses while waiting for payments. Lower A/R days means you can operate with leaner reserves.
Collection risk: The longer money sits uncollected, the higher the risk you'll never collect it. Patient memories fade, insurance appeal windows close, and collection becomes progressively harder.
Growth constraint: If you want to grow your practice but your cash is constantly tied up in A/R, you can't invest in marketing, equipment, or additional staff. High A/R days constrains growth.
Stress and uncertainty: Not knowing when money will arrive creates financial stress and makes planning difficult. Predictable, fast cash flow reduces anxiety.
Industry Benchmarks
Accounts Receivable Days benchmarks for optometry:
Excellent: Under 20 days
Good: 20-30 days
Average: 30-40 days
Concerning: 40-50 days
Problem: Over 50 days
If you're currently above 30 days, you have significant opportunity for improvement. Getting to 25 days or below should be your target.
The Three Levers That Cut A/R Days
Improving A/R days isn't about one dramatic change. It's about tightening three fundamental processes that, collectively, transform your cash flow.
Lever 1: Collect at Checkout
The fastest money to collect is money collected before the patient leaves your office. Every dollar collected at checkout is a dollar that never enters accounts receivable, accelerating your cash flow immediately.
Why this works:
Patients have their wallet out: They're already in "payment mode" at checkout. Collecting is easier now than calling them later.
Eliminates collection costs: You avoid the time and expense of sending statements, making phone calls, and processing payments later.
Prevents bad debt: Patients who leave without paying sometimes never pay. Collecting at checkout eliminates this risk.
Improves patient experience: Settling financial obligations immediately provides closure. Patients know what they owe and don't have to worry about bills arriving later.
Current reality in most practices:
Many practices collect copays at checkout but don't collect patient balances, deductibles, or non-covered services. Staff say "we'll bill you" and patients leave without paying.
Common reasons practices don't collect at checkout:
"We don't know what insurance will pay yet"
"We don't want to make patients uncomfortable"
"Our staff isn't trained to have money conversations"
"Our system doesn't tell us the patient balance until after insurance pays"
All of these are solvable problems.
How to implement point-of-service collections:
Step 1: Verify benefits before the appointment
When patients schedule, verify insurance coverage and understand:
Copay amount
Deductible status (met or not?)
Coverage for planned services
Patient responsibility estimates
Many practice management systems integrate with insurance verification tools that provide real-time eligibility and coverage information.
Step 2: Communicate patient responsibility upfront
Before services are provided, inform patients of their estimated out-of-pocket costs:
"Your insurance shows a $30 copay today, and based on your plan, you'll likely have about $50 in additional responsibility after insurance processes. We collect copays when you check in, and we can also collect the estimated balance at checkout if you'd like to avoid a bill later. Does that work for you?"
Setting expectations upfront makes checkout collections easier because patients aren't surprised.
Step 3: Train front desk staff on checkout collections
Your front desk team needs:
Clear scripts for requesting payment
Authority to collect
Comfort with financial conversations
Understanding of why this matters
Sample checkout script:
"Your total for today is $[amount]. Your insurance will cover $[estimated amount], leaving a balance of approximately $[amount]. We can collect that today to save you from receiving a bill later, or we can bill you once insurance processes. What would you prefer?"
Key elements of this script:
States total clearly
Explains insurance coverage
Offers choice (collect now or bill later)
Frames immediate payment as avoiding hassle, not as pressure
Most patients, when given the option and clear information, prefer to pay now and avoid bills later.
Step 4: Offer multiple payment methods
Make it easy to pay:
Credit/debit cards
HSA/FSA cards
Cash or check
Payment plans for larger balances (pay $X today, $X next month)
Healthcare financing (CareCredit, etc.) for large balances
The more payment options you offer, the higher your collection rate.
Step 5: Have a policy for patients who refuse to pay
Some patients will say they can't or won't pay at checkout. Have a clear policy:
"I understand. We'll send you a statement. Just so you know, we require payment within 30 days. If you have any questions about your bill, please call our office."
For patients with a history of non-payment, consider requiring payment upfront for future appointments or asking them to find another provider (in accordance with patient abandonment laws—consult an attorney).
Step 6: Track your point-of-service collection rate
Metric: (Amount collected at checkout ÷ Total patient responsibility) × 100
Target: 60-80% collected at point of service
Track this weekly. If your rate is below 50%, your staff needs more training or your process needs refinement.
Expected impact:
Improving point-of-service collections from 40% to 70% means 30% less money entering A/R. For a practice with $75,000 monthly in charges and 20% patient responsibility ($15,000), that's $4,500 less entering A/R each month—$4,500 that's already in your bank account instead of waiting to be collected.
This alone can reduce A/R days by 5-10 days.
Lever 2: Follow Up Weekly on Outstanding Claims
Claims don't pay themselves. Insurance companies delay, deny, and downcode whenever possible. Without systematic follow-up, claims sit unpaid for months.
Why this works:
Insurance companies respond to pressure: Claims that are followed up on get paid faster than those that aren't. Squeaky wheels get paid.
Catches denials early: The sooner you identify a denied claim, the sooner you can appeal or resubmit. Many payers have 30-60 day appeal windows—miss them and the money is gone.
Surfaces systemic issues: If you're consistently seeing denials for specific codes or from specific payers, weekly follow-up reveals patterns you can fix.
Prevents aging: Claims followed up on at 14 days don't become 90-day aged claims that are nearly impossible to collect.
Current reality in most practices:
Many practices are reactive rather than proactive with claim follow-up:
They only follow up on claims when they're 60-90+ days old
Follow-up happens sporadically when someone "has time"
No one owns claim follow-up responsibility
No systematic process exists
The result: Claims sit unpaid for 45-60+ days before anyone notices, and by then many are difficult or impossible to resolve.
How to implement systematic weekly follow-up:
Step 1: Assign ownership
One person must be responsible for claim follow-up. This could be:
Your billing specialist
Your office manager
An outsourced billing company (if you use one)
Whoever owns it must have:
Dedicated time each week for follow-up
Access to claim status tools
Authority to appeal or resubmit claims
Accountability for results
Step 2: Pull a weekly aging report
Every Monday (or whatever day you choose), pull an A/R aging report from your practice management system showing:
All outstanding claims
Organized by payer
Sorted by age (oldest first)
Showing: Date of service, patient name, claim amount, payer, current status
Step 3: Prioritize claims for follow-up
You can't follow up on every claim every week (too time-consuming). Prioritize:
High priority (follow up immediately):
Claims 21-30 days old (most payers should have processed by now)
Any denied claims regardless of age
High-dollar claims (over $500)
Claims from payers known to be slow or problematic
Medium priority (follow up if time allows):
Claims 14-20 days old from typically slower payers
Medium-dollar claims that are nearing 30 days
Low priority (monitor but don't actively follow up yet):
Claims under 14 days old (normal processing time)
Claims from very reliable payers with predictable timelines
Step 4: Use electronic claim status tools
Most payers offer electronic claim status portals or EDI transactions (276/277) that allow you to check claim status without calling.
Use these first—they're faster than phone calls. You can check 20 claims electronically in the time it takes to call about 2 claims.
Check for:
Has the claim been received?
Is it pending (being processed)?
Has it been paid? (If yes, check if payment was posted correctly)
Has it been denied? (If yes, what's the reason?)
Step 5: Make phone calls for unresolved claims
For claims that show as pending for 21+ days, or that show as denied, call the payer:
"Hi, I'm calling from [Practice Name] regarding a claim for patient [Name], date of service [Date], claim number [Number]. Your system shows this as pending/denied. Can you tell me the status and what's needed for payment?"
Document the response:
Representative name and ID
Date and time of call
What you were told
What action is needed
Reference number if provided
Step 6: Take immediate action on denials
When you discover a denial, act immediately:
If denial is due to missing information: Resubmit with corrected information within 48 hours
If denial is due to coding issue: Correct the code and resubmit, or appeal if you believe original coding was correct
If denial is due to medical necessity: Submit medical records and appeal letter demonstrating necessity
If denial is due to timely filing: If you're within appeal window, appeal aggressively. If you're past appeal window, write off and learn from it.
The faster you act on denials, the higher your success rate in getting them paid.
Step 7: Track your follow-up results
Metrics to monitor:
Claims resolved per follow-up session: How many claims moved from outstanding to paid each week?
Average days to payment by payer: Which payers pay fastest? Which are consistently slow?
Denial rate by payer and code: Which payers deny most? Which codes get denied most?
Appeal success rate: What percentage of appealed denials get paid?
Use this data to:
Identify problematic payers (consider dropping if too difficult)
Fix coding issues causing frequent denials
Train staff on preventing common denial reasons
Set realistic expectations for cash flow by payer
Step 8: Make it a standing weekly ritual
Block 2-4 hours every Monday (or whatever day works) for claim follow-up. Put it on the calendar as non-negotiable time.
Make it routine:
Same time each week
Same process each time
Track progress and celebrate wins
Expected impact:
Systematic weekly follow-up typically reduces average days to payment by 10-15 days.
Claims that would have sat for 45 days get followed up on at 21 days, identified as problematic, and resolved within a week—turning a 45-day collection into a 28-day collection.
For a practice with $75,000 monthly in charges, shaving 10 days off payment timing means approximately $25,000 less sitting in A/R at any given time.
Lever 3: Track and Post Payments Daily
The faster payments are posted to patient accounts, the faster you identify problems—underpayments, incorrect postings, missing claims, or patient balances that need collection.
Why this works:
Surfaces issues quickly: When you post today's payments today, you immediately see if an insurance payment is lower than expected, if a claim was downcoded, or if patient balances remain.
Enables faster patient balance collection: The sooner you post insurance payments and identify patient responsibility, the sooner you can bill patients or collect at their next visit.
Improves cash visibility: You always know your actual cash position, not your cash position from three weeks ago.
Reduces reconciliation headaches: Daily posting prevents backlogs that create reconciliation nightmares at month-end.
Prevents duplicate billing: When payments are posted promptly, you avoid accidentally billing patients or payers for claims already paid.
Current reality in most practices:
Many practices post payments in batches:
Weekly posting (payments sit unposted for up to 7 days)
Bi-weekly posting (up to 14 days lag)
"When we get to it" posting (chaos)
This creates blind spots—you don't know what's been paid, what's been denied, or what patient balances exist until days or weeks after payments arrived.
How to implement daily payment posting:
Step 1: Assign daily posting responsibility
Someone must be responsible for posting payments every single business day. This is typically:
Your billing specialist
Your office manager
Front desk staff during slower periods
This person needs 30-60 minutes daily (depending on payment volume) to post all payments received.
Step 2: Establish a daily routine
Set a specific time each day for posting:
First thing in the morning
Right after lunch
End of day
Consistency matters. Make it as routine as opening the practice or closing the register.
Step 3: Post all payment types
Electronic payments (EFTs and ERAs):
Most insurance payments now arrive electronically. Your practice management system likely can import ERA (Electronic Remittance Advice) files automatically or semi-automatically.
Check your system daily for new ERA files. Import and post them.
Paper checks (EOBs):
For payers still sending paper checks with Explanation of Benefits:
Open all mail daily
Post each payment immediately, matching to the claim
Document any discrepancies (underpayments, denials shown on EOB)
Patient payments:
Credit card payments made online
Payments mailed by patients
Payment plan installments
Post these daily as well so patient account balances stay current.
Step 4: Reconcile daily with bank deposits
Your posted payments should match your bank deposits. Check this daily:
Total payments posted should equal bank deposits (accounting for 1-2 day processing delay for credit cards)
If they don't match, identify the discrepancy immediately while it's fresh and easy to fix.
Step 5: Flag discrepancies for immediate follow-up
As you post payments, flag:
Underpayments: Insurance paid less than expected. Why? Downcoded? Contractual adjustment? Denial of portion?
Missing claims: ERA shows multiple claims but one from your batch is missing. Was it denied and not shown? Lost?
Incorrect patient responsibility: Insurance paid their portion, leaving patient balance—but the amount seems wrong compared to your estimate.
Create a "discrepancy list" for immediate follow-up. Don't let these sit.
Step 6: Generate patient statements quickly
Once insurance payments are posted and patient balances are identified, generate statements:
Best practice: Generate patient statements within 48 hours of posting insurance payment.
The faster patients receive statements, the faster they pay. Statements sent 3 weeks after insurance paid feel old and confusing to patients. Statements sent within days of insurance processing feel current and urgent.
Step 7: Track your posting lag
Metric: Average number of days between payment receipt and payment posting
Target: Same day (0 days lag) or next day (1 day lag)
If your lag exceeds 2 days regularly, you need to dedicate more time to posting or improve efficiency.
Expected impact:
Daily posting doesn't directly speed up when payers send money, but it dramatically speeds up:
Your awareness of cash position
Your ability to follow up on underpayments and denials
Your patient balance collection (because statements go out faster)
Your overall visibility into practice financial health
The result: 3-5 day improvement in effective A/R days through faster problem identification and resolution.
The 6-Week A/R Days Reduction Sprint
With six weeks until year-end, here's your implementation plan:
Week 1 (This Week): Establish Baseline and Assign Ownership
Monday:
Calculate your current A/R days
Pull an A/R aging report and review what's outstanding
Identify where your A/R sits: How much is insurance? How much is patient balances? How much is over 90 days?
Tuesday:
Assign ownership: Who will handle claim follow-up? Who will post payments daily? Who will manage point-of-service collections?
Block time on calendars for weekly follow-up sessions
Wednesday:
Review and update your point-of-service collection scripts with front desk
Verify your practice management system can show estimated patient responsibility at checkout
Thursday:
Begin daily payment posting if you're not already doing it
Set up your "weekly follow-up day" for claims
Friday:
Calculate your point-of-service collection rate this week
Track how many payments were posted daily vs. backlog
Week 2: Launch Point-of-Service Collections
Focus: Train staff and begin collecting patient responsibility at checkout
Monday:
Hold 30-minute team training on point-of-service collections
Role-play checkout conversations
Set goal: Increase point-of-service collection rate by 10% this week
Tuesday-Friday:
Front desk practices collection conversations with every patient
Track collection rate daily
Celebrate wins: "Great job, Sarah—you collected 8 out of 10 patient balances today!"
End of week:
Review results: Did collection rate improve?
Identify challenges and refine approach for next week
Week 3: Launch Weekly Claim Follow-Up
Focus: Establish systematic claim follow-up process
Monday:
Dedicated claim follow-up day
Pull aging report, prioritize claims 21+ days old
Spend 2-3 hours checking claim statuses electronically and calling payers
Document results
Tuesday-Friday:
Continue daily payment posting
Continue point-of-service collections
Address any denials discovered on Monday immediately
End of week:
How many claims did you resolve through follow-up?
Calculate new A/R days—has it improved from Week 1 baseline?
Week 4: Optimize and Refine
Focus: Identify bottlenecks and improve processes
Review what's working:
Which of the three levers is having the biggest impact?
Where are you still losing money in A/R?
Common bottlenecks to address:
If point-of-service collections still low: Staff may need more training or confidence-building. Consider offering small bonuses for collection rate improvements.
If claims still aging slowly: You may need to dedicate more time to follow-up, or hire/outsource billing support.
If payments not posted daily: The assigned person may need help or the posting process may need streamlining.
Action this week:
Fix your biggest bottleneck
Continue all three levers consistently
Week 5: Sprint to Clean Up Aged A/R
Focus: Attack old balances aggressively
Target: All claims and patient balances over 60 days
Monday:
Pull list of all A/R over 60 days
Divide into: Insurance claims vs. patient balances
Insurance claims over 60 days:
Call every single one
Resubmit or appeal as needed
Write off any that are uncollectible (past timely filing, patient left area, etc.)
Patient balances over 60 days:
Send final notices
Call patients with balances over $100
Offer payment plans
Send to collections agency if appropriate (after exhausting internal efforts)
Goal: Clean up as much aged A/R as possible before year-end
Week 6: Lock in Gains and Plan 2026
Focus: Measure final results and commit to maintaining momentum
Calculate final A/R days:
Compare to Week 1 baseline
Celebrate improvement with team
Document your new processes:
Point-of-service collection procedures
Weekly claim follow-up schedule
Daily posting routine
Plan for 2026:
Set A/R days goal for Q1 2026 (e.g., maintain under 25 days)
Schedule monthly A/R review meetings
Commit to continuing these disciplines
Tracking and Celebrating Progress
You can't improve what you don't measure. Track these metrics weekly:
Primary metric: A/R Days
Calculate every Friday
Chart it: Week 1: 38 days, Week 2: 35 days, Week 3: 31 days, Week 4: 28 days, Week 5: 26 days, Week 6: 24 days
Celebrate when you hit your goal
Supporting metrics:
Point-of-service collection rate: (Collected at checkout ÷ Patient responsibility) × 100
Target: 60-80%
Claims resolved through weekly follow-up: Number of claims paid as a result of follow-up
Track: How much money did follow-up bring in this week?
Payment posting lag: Average days between payment receipt and posting
Target: 0-1 days
A/R over 90 days: Dollar amount and percentage of total A/R
Target: Under 10% of total A/R
Share progress with your team:
Post a simple chart in your staff area showing weekly A/R days. As the number drops, the team sees their impact.
Celebrate milestones:
"We dropped from 40 days to 35 days in two weeks!"
"Sarah collected $2,800 at checkout this week—awesome!"
"We resolved $8,500 in outstanding claims on Monday—great work!"
Recognition motivates continued effort.
Common Mistakes That Prevent A/R Improvement
Mistake #1: Focusing only on old balances
Many practices attack aged A/R over 90 days while ignoring current A/R management. This is backwards.
Problem: You can clean up 90-day balances, but if you're still creating new 90-day balances through poor processes, you'll be in the same spot in three months.
Solution: Focus on preventing A/R from aging by tightening the three levers. Old balances will gradually clear as you prevent new ones from forming.
Mistake #2: Treating A/R improvement as a one-time project
Some practices do an A/R "sprint" once a year, then let processes slip back to old habits.
Problem: A/R management is ongoing, not episodic. Gains evaporate without consistent execution.
Solution: Build permanent processes. Weekly claim follow-up and daily posting aren't temporary—they're permanent parts of how your practice operates.
Mistake #3: Not collecting at checkout because "patients will be upset"
Many front desk staff fear offending patients by asking for payment.
Problem: Most patients aren't offended—they expect to pay for services. Staff discomfort, not patient reluctance, is usually the issue.
Solution: Frame collection as helping patients avoid bills later. Train staff on scripts that feel helpful, not pushy.
Mistake #4: Giving up after one week
If your first week of trying to collect at checkout goes poorly, or your first week of claim follow-up doesn't yield results, you might conclude "this doesn't work for our practice."
Problem: Behavior change and skill development take time. Staff need practice. Processes need refinement.
Solution: Commit to at least 4 weeks of consistent effort before evaluating effectiveness. Adjust processes, but don't give up.
Mistake #5: Not accruing bad debt appropriately
If you have significant aged A/R that's likely uncollectible, but you're not writing it off or accruing it as bad debt, your financial statements are misleading.
Problem: You think you have $80,000 in A/R, but $20,000 of it will never be collected. Your cash position is weaker than your books suggest.
Solution: Work with your accountant to establish a bad debt reserve or write off clearly uncollectible balances. This gives accurate financial visibility.
What Success Looks Like
After implementing these three levers consistently for 6 weeks, here's what you should see:
A/R Days:
Before: 38-45 days
After: 22-28 days
Improvement: 10-20 days faster cash conversion
Cash flow impact:
For a practice with $75,000 monthly charges, reducing A/R days from 40 to 25 means:
Before: $100,000 sitting in A/R (40 days × $2,500 daily charges)
After: $62,500 sitting in A/R (25 days × $2,500 daily charges)
Cash freed up: $37,500
That's $37,500 that moved from "waiting to be paid" to "in your bank account" through process improvement alone.
Other improvements you'll see:
More predictable cash flow: You know when money is coming in because you're following up weekly and posting daily
Fewer aged balances: Less money sitting over 90 days that's difficult to collect
Lower stress: Less financial uncertainty, fewer surprises
Better financial decision-making: Clear visibility into true cash position allows better planning for equipment purchases, hires, or investments
Higher collections percentage: By following up on denials quickly and collecting at checkout, your overall collection rate improves (fewer write-offs)
Take Action This Week
Don't wait for January. Start your A/R improvement sprint this week.
Monday morning:
Block 30 minutes to calculate your current A/R days
Pull an A/R aging report
Identify your baseline
Monday afternoon:
Assign ownership: Who handles claim follow-up? Who posts payments daily?
Block weekly time on calendars for claim follow-up
Tuesday:
Train front desk on point-of-service collection scripts
Begin attempting to collect patient balances at checkout
Wednesday:
Begin daily payment posting if not already doing it
Set up tracking spreadsheet for weekly A/R days
Thursday:
Conduct your first dedicated weekly claim follow-up session
Follow up on claims 21+ days old
Friday:
Calculate your A/R days after one week of new processes
Celebrate any improvement, no matter how small
Plan adjustments for next week
Cash flow isn't luck—it's a process. Execute the process consistently, and the cash flow improvements follow inevitably.
Six weeks from now, your December bank balance will be stronger, your January will start with better cash position, and your practice will be entering 2026 with momentum.
Start today. Your future self will thank you.
