Mistakes as simple as invoice errors can increase processing costs anywhere from 20% to 30%. Revenue cycle management (RCM) is the backbone of any sustainable organization. The cost of administrative inefficiency can be staggering and if left unchecked, and detrimental to your revenue process.
Businesses that deal with fluctuating client information, such as healthcare organizations, face these risks everyday. For example, during a patient visit someone might change their surname, insurance information, or address. By inputting the wrong data, you could negatively affect your organization's overall financial health. That's why using a data focused approach, like tracking revenue cycle management metrics, is so helpful.
Tracking key performance indicators (KPI) can help you spot issues in your RCM process faster. Your financial performance can grow without the labor of manually combing through your entire process for mistakes. Today we will talk about some of the best practices and metrics to track when it comes to your business.
KPIs is a quantifiable measure of performance over time. For revenue cycles, they determine how financially viable a business is.
Organizations rely on these revenue cycle metrics to figure out what is currently working. And also what needs to change. These numbers provide a story. Which explains how and why a business might need to change strategies.
Like I mentioned, revenue cycle KPIs matter because they help determine what businesses need to focus on to continue to successfully collect payments. They help to provide a transparent insight on how efficiently your business functions. Take a healthcare practice for example. You can't collect on revenue from a service provided without being able to successfully send out a claim.
Management challenges such as coding errors tend to go unnoticed without tracking revenue cycle data. Leading to an influx of claim denials and slowing the gross collection rate. Lost revenue and an interruption to cash flow are common symptoms of a broken link in the metaphorical chain that is your revenue cycle. Tracking performance metrics stops the break before everything spirals out of control.
Now that you understand how important KPIs are to your daily business, let's go over a few. These are the ones that help you focus on efficiency and streamline your processes. Cutting down on administrative burden in the long run.
The most common forms of KPIs are:
Let's go over a few specific examples together.
Your days in Accounts Receivable (AR) metric is arguably one of the most important when measuring financial health. This operational metric measures the average number of days it takes for a business to collect payment after the date of service.
In other words, this looks at the amount of time a bill sits unpaid. High performing revenue cycles aim for this metric to be under 35 days. The more time that goes by, the higher the chance of failure to follow-up and collect.
Use the following formula to calculate days in AR:
Your net collection rate is another vital revenue cycle management KPI to keep track of. It measures the effectiveness of your revenue collection against what you are actually allowed to collect. This is a true reflection of your revenue cycle performance.
Aim for 96% to 99% as a low rate suggests issues with uncollected payments or excessive write-offs. You can calculate your net collection rate through the following formula:
Make sure to keep track of the amount of money written off as uncollectible. A high write-off percentage indicates your company is struggling to collect on outstanding revenue. You want to aim for a low percentage with this metric. Use the following formula to calculate where you stand:
If you run a healthcare organization, you know that one of the most significant hurdles lies within your claim denial rate. That is why a solid denial management strategy is key to preventing lost revenue. Let's take a look at some specific KPIs to track in your healthcare revenue cycle to stay on top of this risk.
For healthcare providers, the clean claim ratio is key to track. Often referred to as clean claim rates, this KPI measures the percentage of claims that are successfully processed and accepted by the payer on the first submission. That means no rejections on the first try.
The metric goal here should come in at least at 95% or higher.
The higher your clean claim rate is, the faster you receive your reimbursement. Less time spent waiting on rejected or denied claims. Also, less time your team needs to work on the same claim over and over again.
Calculate your clean claim rate with the following formula:
It’s worth mentioning here that organizations that utilize denial management software, AppealsPlus, enjoyed an average clean claim rate of 98% in 2025.
Similar to tracking your clean claim ratio, you want to make sure you keep an eye on your denial rate as well. This is the total number of claims denied by an insurance company. Break this down by the following categories for better understanding: technical denials and clinical denials.
Technical covers issues with eligibility or duplicate claims submitted. Clinical refers to issues regarding medical necessity or coding errors. The formula to find your claim denial rate is:
Let's talk about how to turn raw data into action.
First, you need a reliable and real-time revenue cycle dashboard.Having a KPI dashboard is vital for keeping your finger on the pulse of your financial health.
Real-time updates and ready-to-download reports are key when tracking not only healthcare revenue, but any industry's cycle. This allows you to spot troubling trends before they become a problem.
So what makes up a solid dashboard?
To improve and optimize your revenue cycle management KPIs, you want to look at the following strategies.
These steps move beyond simple tracking. They focus on actionable improvements that benefit any organization, regardless of your industry.
Revenue cycle management is not a "one and done" process. It is actively changing and evolving.
Simple mistakes can increase processing costs by up to 30%, silently eating away at your margins.
By implementing what we’ve outlined above, you can move your organization from chasing down owed revenue to a more proactive state.
Making this shift impacts all levels of your business. For example, improving the accuracy of claim submissions and other front-end processes helps to reduce human error and administrative delays. Customer and patient payments become more streamlined and timely with less back-and-forth, relieving strain between you and your clients.
Your efficiency in financial collection is more than just your bottom line. It sets the foundation for customer and patient satisfaction. When your processes meet industry standards and utilize key metrics, you remove the stress of simple errors and financial confusion. This builds trust and ensures that your organization or healthcare facility meets those industry benchmarks.
The only question remaining is: how do you find a revenue cycle management KPI dashboard that actually works for you? You don’t have to look any further.
We’ve created Rev Vitals, a comprehensive RCM KPI dashboard tool designed to give you total visibility into every stage of your billing cycle.
Rev Vitals isn't just a reporting tool; it’s a proactive management system. By breaking down complex data into actionable insights, it allows decision-makers and billing teams to "run to the red" by identifying and fixing bottlenecks before they impact your bottom line.
Our suite includes specialized dashboards tailored to the metrics that matter most:
The difference between a struggling organization and a thriving one often comes down to data visibility. With Rev Vitals, you no longer have to manually comb through spreadsheets to find errors. You have a real-time view of your organization’s financial health at your fingertips.
Ready to see your revenue cycle in high definition? Contact our team today to learn how we can help you reach a 98% clean claim rate.
