There are seven reports that should be on your desk every month. Skip any of them and you’re making decisions with incomplete information.

Profit and loss by location and provider. A combined P&L for the whole practice hides problems. One location might be profitable while another bleeds money. One provider might generate twice the revenue of another but cost nearly the same in overhead. Break the P&L down so you can see where the money is actually coming from and where it’s going. If you run multiple entities under one healthcare group, each one needs its own P&L as well.

Accounts receivable aging for insurance claims. Split your A/R into 0-30, 31-60, 61-90, 91-120, and 120+ day buckets. The bulk of your insurance A/R should sit in the 0-30 day range. When balances start piling up past 90 days, your billing process has a problem. A/R over 120 days is a serious red flag that usually means claims aren’t being followed up on, denials aren’t being reworked, or something is broken in the submission process.

Accounts receivable aging for patient balances. Patient A/R behaves differently from insurance A/R. Patient balances over 90 days become very difficult to collect. Review this separately so you can see whether your front desk is collecting copays at the time of service and whether your billing team is following up on outstanding patient balances before they go stale.

Days in A/R. This single number tells you, on average, how many days it takes to collect on what you’ve billed. For most medical and dental practices, anything under 35 days is good. Over 50 days means cash is sitting out there that should be in your bank account.

Net collection rate. This measures how much you actually collect compared to what you’re allowed to collect after contractual adjustments. A healthy practice should be collecting 95% or higher. If your net collection rate is below 90%, you’re leaving real money on the table through write-offs, missed follow-ups, or billing errors.

Overhead ratio. Add up your total operating expenses and divide by your collections. For most medical specialties, overhead should fall between 55% and 65% of collections. Dental practices sometimes run a bit higher. If your overhead is creeping above 65%, look at staffing costs first since they’re usually the biggest line item, then rent, then supplies. Tracking this monthly prevents the slow creep that eats away at profitability over a year or two.

Cash flow statement. Revenue doesn’t equal cash. Your P&L might show a profitable month while your bank account tells a different story because of insurance payment delays, large equipment purchases, or loan payments. The cash flow statement reconciles that gap and shows you whether you can actually cover payroll, rent, and upcoming expenses. This is especially important for practices with seasonal fluctuations in patient volume.

Beyond these seven, consider reviewing provider productivity numbers monthly. Revenue per provider, patients seen per day, and procedures per visit help you spot capacity issues and staffing imbalances before they become financial problems.

The common mistake is generating these reports but not actually reviewing them together. Each report tells part of the story. A great P&L with deteriorating A/R means your profit is on paper but not in the bank. Low overhead with a declining collection rate means you cut costs but also cut revenue. You need the full picture.

If you’re not getting these reports from your current bookkeeping setup, or if they’re not broken out in ways that are useful for a healthcare practice, that’s worth fixing now rather than later. Our Orange County small business bookkeeping services include financial reporting structured around how healthcare practices actually operate, so you’re reviewing numbers that help you make better decisions every month.