Page 48 - 2015 Key Metrics-Assessing ECP Practice Performance

Accounts Receivables
Accounts receivable days outstanding is calculated by dividing total accounts receivable by annual gross revenue, divided by 365. The
median practice had 17 days accounts receivable in 2010.

Another key metric related to receivables is the aging of the uncollected amounts due. A universally true rule is that there is an inverse
correlation between the probability of collection and the number of days a bill remains unpaid. In typical optometric practices during
2010, some 80% of receivables were aged less than 60 days, and 20% were 60 days or longer. MBA data suggest that having one-third
or more of receivables aged 60 days or longer indicates a deficient collections process.

Accounts Receivables

Improvement High
Opportunity Median Performance
50 32 30 24 18 17 15 11 8 5 2

5th 15th 25th 35th 45th 50th 55th 65th 75th 85th 95th
percentile ranking
AVERAGE=22

Accounts Receivables Aging % 60 days or more (By Performance Decile)

Improvement High
Opportunity Median Performance
60% 47% 36% 30% 22% 20% 17% 15% 10% 6% 2%

5th 15th 25th 35th 45th 50th 55th 65th 75th 85th 95th
percentile ranking

46 Key Metrics: Assessing Optometric Practice Performance 2015