This means it is necessary to understand the cash flow for the following 90 days, at any given time. For this, the first thing you need to do is to consistently measure your conversion rate by each procedure type. This means that you need to know on average, the ratio of your last six months conversion rate to revenue to procedure. You need that metric combined with the lead time between an appointment and surgery because that is going to impact your billing. Third, you need to consider the attendance rate for the last six months because not everyone that is scheduled shows up.
Once you have gathered the previous three numbers, it is straightforward. Take one, multiply it by three, consider your time for two in terms of the number of days until you get paid, to arrive at your estimated cash flow. Having an accurate understanding of your cash flow is important in operating your practice effectively.
