Days' sales outstanding

(redirected from Collection Ratios)

Days' sales outstanding

Average collection period.

Days' Sales Outstanding

In accounting, a company's average collection period. Usually calculated monthly, it indexes the relationship between outstanding accounts receivable and total sales over a given period and is a common tool in measuring liquidity. Tracking trends in days' sales outstanding can also indicate the level of credit risk a company is willing to extend at different points of time. It is also called the collection ratio.
References in periodicals archive ?
A majority of respondents reported high costs for touching non-clean claims, low same-day collection ratios, high revenue loss due to preventable denials and a large percentage of underpayments.
This is not only for calculations of collection ratios, but to determine your "seasonality"--which I'll discuss in greater detail next month.
Some of the tools that physicians and their staff can use to oversee this area include tracking the days in accounts receivable, to find out how long it takes to collect, and calculating gross and net collection ratios, which show how much is being collected.
Collection ratios can be helpful in determining the share of the accounts receivable that has actually been collected.
At the highest level, forecasting and performance improvements require data on three primary billing elements: historical net collection ratios (NCRs), lag time between billing and payment, and the percentage of insurance collections versus private pay.
This will significantly reduce billing and collection costs and will result in higher collection ratios.
Collection ratios can catapult to 100 percent because payment card authorization is equivalent to guaranteed payment.

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