Managing AR: Keeping Your Practice Profitable and Cash Flowing

The success of your dental practice isn't just about clinical skills—it’s about running a financially healthy business. One of the biggest challenges in dentistry is managing accounts receivable (AR) effectively. If overdue payments and inconsistent billing are causing cash flow issues, it's time to put a rock-solid system in place.

Managing and optimizing your AR system helps ensure that your dental practice remains profitable, efficient, and stress-free. We’ll break down three key strategies to create a healthy AR system that keeps your revenue flowing. Let’s dive in!

1. Set Clear Payment Policies—And Stick to Them

The foundation of a strong AR system is having crystal-clear financial policies that patients understand upfront. Many practices struggle with collections simply because expectations weren’t clearly communicated. Here’s how to fix that:

• Require payment at the time of service. Patients should know that payment is expected before leaving the office. This reduces the number of overdue balances and follow-ups.
• Offer flexible financing options. Partner with third-party financing companies to provide easy payment solutions.
• Implement a no-future-scheduling rule for unpaid balances. This ensures that outstanding payments don’t keep stacking up.
• Limit in-house payment plans to two installments max. For example, 50% upfront and 50% upon crown seat. Anything beyond that should go through external financing.

By setting these policies, you’re empowering your front office team to confidently handle payments without awkward conversations or financial uncertainty.

2. Build a Bulletproof Follow-Up System

Even with clear policies, some patients will still have outstanding balances. That’s where a strong follow-up system comes in. Here’s what works best:

• Run your AR report at the start of each month. Organize accounts by aging categories (30, 60, 90+ days) using a color-coded Google Sheet.
• Call before sending statements. Instead of mailing invoices and hoping for payment, proactively call patients. A simple script like, “Great news! Your insurance has paid. Your remaining balance is $X. Would you like to pay by Visa or MasterCard today?” works wonders.
• Use digital payment solutions. Services like Moolah allow you to text statements, making it easier for patients to pay online.
• Assign a dedicated team member to AR management. Designate specific billing days (Tuesdays & Thursdays work well) and ensure that follow-ups happen consistently.

3. Monitor Your Metrics and Take Action

If you don’t track your AR performance, it’s impossible to improve it. Here’s how to monitor the right metrics and keep your collections on track:

• Set a goal to keep AR over 90 days below 10% of total AR. Ideally, it should be closer to 5%.
• Ensure total AR never exceeds one month’s worth of collections.
• Review AR data monthly. Have a billing meeting where the doctor and billing coordinator analyze performance, discuss outstanding balances, and refine collection strategies.
• Track statement cycles. If a patient reaches the third statement without payment, stop sending statements and take the next step (collections, legal action, etc.).

By regularly reviewing these numbers, your team will stay proactive instead of reactive, keeping your practice’s cash flow strong and consistent.

Stop Leaving Money on the Table

Your dental practice has already done the work—now it’s time to get paid. By implementing clear financial policies, a structured follow-up system, and consistent metric tracking, you’ll transform your AR process into a seamless, predictable system.

At Dental A Team, we specialize in helping practices like yours implement proven systems for success. If managing your AR is a pain point, we’re here to help. Go to TheDentalATeam.com or book a complimentary Practice Assessment.

Let’s get your cash flow thriving!

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