What is Days in AR?
The average number of days it takes to collect a dollar after the service is billed — the headline speed metric of a revenue cycle.
Definition
Days in AR measures how long money spends outstanding. The standard calculation divides total accounts receivable by average daily charges, where average daily charges is gross charges over a trailing period divided by the number of days in that period.
It is a speed measure, not a completeness measure, and it moves for reasons that are not always about collections: a spike in charge volume lowers it temporarily, and writing off aged AR lowers it without a dollar being collected. Read alongside an AR aging breakdown — specifically the share of AR over 90 days — it becomes much harder to game.
Why it matters
Every additional day in AR is working capital sitting at a payer instead of in the practice, and aged AR collects at a steeply declining rate as it ages.
Related terms
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