SILKIN MANAGEMENT GROUP: CALCULATING A PERCENTAGE

On Silkin Management Group’s Tuesday, August 16th blog site, we presented a sample job description for an Accounts Manager in a health care office. This job description is part of Silkin Management Group’s Office Policy and Job Description Manual that every client new to Silkin Management Group’s program receives. You can link to the August 16th Silkin blog site here: http://www.silkinmanagementgroup.blogspot.com/

One of the statistics we discussed in that sample job description was the “percent of collections to service”. To calculate this stat based on just one month’s services and collections would, in most offices, not be an accurate representation. It would not take into account the turn around time for payment, especially if you are in any way using insurance reimbursements as part of your collections.

We suggest to Silkin Management Group clients to use the following formula which more closely represents the effectiveness of the Accounts Manager.

FORMULA:

THIS MONTH’S COLLECTIONS PLUS LAST MONTH'S COLLECTIONS
_______________________________________________________________

LAST MONTH’S SERVICES PLUS SERVICES FROM THE MONTH BEFORE LAST

For example, if the month you just completed was July, you would take the total of July’s collections, plus June’s collections and divide that by the total of June’s services plus May’s services.

The services stat used for this formula would be the adjusted services, meaning the service statistic after subtracting any barter, charitable work or any services that don’t result in monetary collection.

This formula covers the collection and services figures on the basis of the same month (June’s services and collections), a 30 day lag (July’s collections and June’s services) and a 60 day lag (July’s collections and May’s services). This gives you an accurate overall picture of the collection efficiency.

For more information about how Silkin Management Group can help you with your collections, give us a call at 800-695-0257 and visit our website at http://www.silkinmanagementgroup.com

Jack Hennessy
Silkin Management Group Consultant