Q: Why is my practice profitable on paper but always tight on cash?

The P&L looks healthy. You still hesitate before the big supply order. Profit and cash are two clocks. The P&L books revenue when the work is done. The bank only fills when money actually lands. We would treat those as separate reads. You can look profitable and still be short while deposits lag the visits that earned them.

Q: Why is revenue up but cash down?

Billed revenue climbed. Deposits did not. It feels like the money walked out. Billed and collected are different stories. Revenue can climb while deposits fall if more money sits in unbilled visits, open claims, or patient balances. The gap between those two lines is where cash is waiting, not a missing patient.

Q: Which should I trust: the dashboard or the bank?

The dashboard looks calm on Monday. The account balance does not. The bank is the only report that pays vendors and staff. Dashboards tell a story about the bank. When they disagree, trust the account first. Then find which report drifted and why before you act on the pretty number alone.

Q: What does cash positive actually mean?

Someone said the practice is cash positive. The account still feels thin. Cash positive means money lands close to the care that earned it. Not "we booked a lot this month." Not a strong P&L with a quiet account. Close timing between visit and deposit is the test that matters.

Q: Where does the money wait between the P&L and the bank?

The work is already on the P&L. The deposit is not. It feels like the dollars vanished. They did not vanish. They wait in a few quiet places: unbilled visits, claims still moving toward insurance, patient balances sitting on statements. The P&L already counted the work. The bank is still waiting on those steps to finish.

Q: Why does growth make cash feel worse?

You added providers and the schedule filled. The account still feels thinner than last year. More work today does not speed up how long money takes to land. You do more visits on the old slow clock. The bank feels the lag before the P&L admits anything is wrong. We would watch days from visit to deposit while volume climbs, not only the growth line.

Q: Why do we only collect sixty cents on the contracted dollar?

You budgeted on the contracted rate. What landed was a lot less. It feels like theft. Contract value is not expected cash. Denials, underpayments, and the patient's share sit in the gap. If you plan spending on the contracted dollar, you are counting money that never agreed to arrive. Plan on what actually lands.

Q: Why do so few appointments reach paid-in-full?

The visit happened. The balance is still open weeks later. Nobody can say when it closes. Paid-in-full means the visit closed all the way to a zero balance. Visit done does not mean money closed. Track how many visits finish that trip: claim, patient share, and posting. That close rate is the honest picture.

Q: What does fixed actually look like?

You want a picture of "done" that is not another busy week. Cash lands close to care. Someone owns the weekly numbers by name. Denials trend down because the causes get shut, not because one person works harder on the same backlog. The account stops disagreeing with the P&L without weekly heroics.

Q: What is hiding in a category nobody questions?

An aging report that looks fine still has a bucket nobody opens. Cash never comes from it. Some buckets still read as collectible while money never lands. A category that nobody opens becomes a place dollars go to die quietly. Question the buckets that feel safe before you call them current.

Question 1

Why is my practice profitable on paper but short on cash?

Accepted Answer

Because the P&L records revenue when the work is done, and the bank records money when it arrives. The distance between those two dates is where your cash sits. A practice can grow its profit and lose cash in the same quarter, with nobody doing anything wrong, when that distance is getting longer.

Profitable on Paper, Broke in the Bank: Two Reports, Two Stories

Question 2

Why is revenue up but cash down?

Accepted Answer

Because revenue counts work when it's delivered, and cash only counts money that has arrived. A growing practice has more work sitting between those two points at any moment: notes waiting on a signature, claims waiting on insurance companies, and balances waiting on patients. A one-page monthly comparison of what you billed, what you expected, and what reached the bank shows where the gap sits.

Question 3

Which report should I trust when the reports and the bank disagree?

Accepted Answer

Start with the bank statement. Your accounts receivable (AR) records what someone promised to pay, and the P&L records revenue under accounting rules, while only the bank records what actually arrived. Work backward from it: take the month’s revenue and subtract what’s unbilled, what sits with insurance companies, what sits with patients, and what was written off. Whatever is left should match your deposits.

The Medical Practice Cash Bridge: Your Bank Account Is the Report

Question 4

What does cash positive mean for a medical practice?

Accepted Answer

It means the cash in your account today is more than what you owe in the near term, so payroll, rent, and suppliers get paid from money that has arrived. It has nothing to do with when the money was earned. Profit describes a month or a year that has closed. Cash positive describes today, and a profitable practice can fail that test for years.

What Does Cash Positive Mean for a Medical Practice

Question 5

How do I forecast cash for the next three months?

Accepted Answer

Start from money already owed instead of hoping for next month’s visits. Take each insurance company’s open claims and apply how long that company usually takes to pay, since each one runs on its own clock. Add what patients owe at the rate they really pay. That gives you the cash to expect if nothing changes, and your plan goes on top of it.

Medical Practice Cash Flow Forecast: What Cash Looks Like in Three Months

Question 6

Why is the cash we expect lower than our contracted rates?

Accepted Answer

Because the contracted rate prices the work, and expected cash prices where each visit actually sits. Work not yet billed, claims the insurance company hasn’t decided, and balances owed by patients each carry some chance of never arriving. In one trace, expected cash came to about sixty cents per contracted dollar. Your own number depends on your mix of insurers and where your visits sit.

Contracted Rate vs Cash Collected: Why You Keep Sixty Cents

Question 7

How many of our appointments get paid in full?

Accepted Answer

There's no published benchmark, because almost nobody measures it. To find yours, take appointments from a month that closed at least 90 days ago and count how many reached a zero balance. Then sort the rest by who has to act next: the insurance company, the patient, or someone in your office. The ones waiting on your own office are the ones to work first.

Medical practice profit and cash: why they disagree