Managing accounts receivable

Jan 01, 2007

Q How do the levels of accounts receivable compare in a companion animal practice to an equine practice? What's a reasonable level of accounts receivable for both?

Denise Tumblin
"Ideally, accounts receivable will represent no more than 1.6 percent of annual revenue in a well-managed companion animal practice," says Denise Tumblin, CPA, president of Wutchiett Tumblin and Associates in Columbus, Ohio. "In a well-managed equine practice, accounts receivable typically represent 10 percent to 11 percent of annual revenue." To calculate your percentage, she says, divide your total accounts receivable by your annual revenue.