Professional services
Medical Practice Cash Flow Calculator
Works practice cash flow, where the payer cycle sits between the work and the money.
Result
Profit and cash are different things and a growing contractor can run out of cash while profitable, because the work is paid for before the invoice is. This models collection speed, not seasonality.
Get a Free Business AuditHow the calculation works
Amounts billed against the days payers and patients actually take to pay, with costs paid monthly and the opening balance, giving the funding gap and months of runway. A practice pays its staff and rent on a monthly cycle while claims move through submission, adjudication, payment and patient balance collection, and that gap has to be funded.
What moves the number
- Days in accounts receivable by payer.
- Denial rate and the time taken to rework denials.
- Patient responsibility balances after insurance.
- Claim submission lag after the visit.
Where this one goes wrong
Submission lag is the part the practice fully controls and the part most often neglected: a claim sitting unsubmitted for a week delays the money by a week for no reason, and documentation that holds claims up is a cash problem as much as a compliance one. Denials are the other controllable element, since a denied claim not reworked within the payer's timeframe becomes permanently uncollectable, and the window is shorter than people assume.
Before you quote
- Submit claims within days of the visit, not weeks.
- Rework denials inside each payer's appeal window.
- Collect patient responsibility at the time of service where possible.
Where the rules come from
Questions
About this calculator
What does a practice control in its cash cycle?
Submission speed and denial rework. A claim sitting unsubmitted delays the money for no reason, and a denial not reworked inside the payer's window becomes permanently uncollectable. Both are entirely within the practice's hands.
How long do denials stay appealable?
Each payer sets its own timeframe and they are shorter than people assume. A denial discovered during a quarterly review is frequently past the window, which is why denials need working weekly rather than being allowed to accumulate.
Why collect at the time of service?
Because patient responsibility collected after the visit is far harder to obtain, and higher deductibles have made that balance a larger share of revenue than it used to be. Collecting at the desk converts a receivable into cash at no cost.
The formula
cash tied up = daily invoicing x days to get paid
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How to use this calculator
- Invoiced per month ($). Enter your own figure; the page starts at $68,000.
- Payment terms (days). Enter your own figure; the page starts at 30.
- Days patients actually take. Enter your own figure; the page starts at 46.
- Costs paid out per month ($). Enter your own figure; the page starts at $38,000.
- Cash in the bank now ($). Enter your own figure; the page starts at $22,000.
The result updates as you type, so you can try a figure, see what it does to days of funding gap, and change it back. Nothing you enter is sent anywhere or saved.
A worked example
These are the figures the calculator opens with. Every number in the results column below is produced by the same calculation the page runs, so you can follow it through before putting your own figures in.
What goes in
| Input | Value |
|---|---|
| Invoiced per month | $68,000 |
| Payment terms (days) | 30 |
| Days patients actually take | 46 |
| Costs paid out per month | $38,000 |
| Cash in the bank now | $22,000 |
What comes out
| Result | Value |
|---|---|
| Days of funding gap main result | 16 |
| Cash tied up in invoices | $104,267 |
| Monthly surplus | $30,000 |
| Months of cover | 999.0 |
There is $104,267 sitting in unpaid invoices, and customers take 16 days longer than your terms allow. That gap is the money you are lending them for free.
How sensitive the answer is
Holding everything else steady and changing only invoiced per month, this is what happens to days of funding gap. It is worth knowing which of your inputs the answer actually hinges on, and which barely move it.
| Invoiced per month ($) | Days of funding gap |
|---|---|
| $34,000 | 16 |
| $51,000 | 16 |
| $68,000 example above | 16 |
| $102,000 | 16 |
| $136,000 | 16 |
Every other input is held at the example value while this one changes, which is not how a real job behaves. Treat it as a guide to which number matters most, not as five separate quotes.
What each figure means
- Invoiced per month ($)
- A money amount, starting at $68,000.
- Payment terms (days)
- A number, between 0 and 180, starting at 30.
- Days patients actually take
- A number, between 0 and 365, starting at 46.
- Costs paid out per month ($)
- A money amount, starting at $38,000.
- Cash in the bank now ($)
- A money amount, starting at $22,000.
What the results tell you
| Result | What it is |
|---|---|
| Days of funding gap | The headline result. A number. |
| Cash tied up in invoices | A money figure. |
| Monthly surplus | A money figure. |
| Months of cover | A decimal figure. |
Estimating is the easy part
The jobs you never hear about cost more than the ones you mis-measure. BDEVY builds the marketing, systems and automation that bring them in.