How to Analyze Revenue Cycle Performance

A revenue cycle performance analysis is an excellent tool for measuring the success of your business production and a good way to identify sources of lost potential. Analyze the revenue cycle periodically to stay a step ahead of your competitors and in touch with your business. Follow a few steps to conduct a useful and cost effective revenue cycle performance analysis.

Instructions

Difficulty: Moderately Challenging

1. Determine revenue cycle key indicators. Go beyond cash, receivables and A/R days to identify your business' specific indicators. This will enable you to get a more comprehensive and complete picture of your revenue cycle.
2. Refer to your records and business data. If you have data collected for the purpose of examining revenue cycle performance, then refer to the data to begin to get a picture of the cycle. If you have not assembled data, do your best to piece together data to form a picture of your business revenue cycle and create trends based on past performance.
3. Set appropriate benchmarks. While your business is certainly part of an industry, it has its own specific practices and conditions which you must account for. Benchmark against your own goals and industry peaks and norms to get a fair idea of how your business is performing.
4. Present longer term trends on the basis of your data. It is not enough to simply mark peaks and troughs in a given period. Find long-term trends that give you substantive information about your business in general, not just for a given period of time.
5. Analyze relationships between key indicators. Thinking about how the number of A/R days relates to high (or low) complaints, rising cost or falling efficiency will give you a more complete and holistic picture of your business and revenue cycle. Bring staff members from various sections of the company to contribute ideas about the relationships between key indicators and general business performance.