Production vs collections

Production vs collections is the distinction between the dollar value of dental work a practice performs in a period (production) and the cash it actually receives for that work (collections). Production tells you how busy and how well-scheduled a practice is. Collections tell you whether that work turned into money. Every practice management system reports both, and the two are compared with the collection ratio.

What is the difference between gross production and net production?

Gross production is the value of completed procedures at the practice's full fee schedule, while net production is gross production minus contractual write-offs, insurance adjustments, discounts, and other adjustments, leaving the amount the practice can actually expect to collect. Net production is the number to compare collections against; comparing collections to gross production makes any office that accepts insurance look like it is failing to collect.

Groups should also decide whether production is counted when a procedure is completed or when it is posted, and use one convention across all offices. Practice management systems such as OpenDental or Dentrix report both gross and net figures, but the adjustment categories are configured by the office, so two offices in the same group can have very different net production for the same work until the adjustment types are standardized.

How is the collection ratio calculated?

The collection ratio is calculated by dividing total collections in a period by net production in the same period and multiplying by 100, so a practice that collects $95,000 against $100,000 of net production has a 95 percent collection ratio. Because insurance pays weeks after the work is done, the ratio is most meaningful over a rolling 90-day or 12-month window rather than a single month.

Worked example (illustrative figures). In a quarter an office produces $480,000 at full fee. Insurance write-offs and discounts total $96,000, so net production is $384,000. The office collects $357,000 in the same quarter, from patients and from insurance. Its collection ratio is 357,000 divided by 384,000, or about 93 percent. The $27,000 gap is what the office and its billing team need to explain: aging claims, patient balances, or write-offs that were never posted.

Why does the gap between production and collections matter?

The gap between production and collections matters because it is where a practice loses money it already earned: unfiled or denied claims, patient balances that were never collected at checkout, and adjustments that were posted late or not at all. Production can look strong while cash quietly falls behind, and by the time the bank balance shows it, the receivables are months old and harder to collect.

For a multi-office group, tracking both per office is what makes the gap visible early. Production is the operating number the morning huddle starts from; collections and balance follow-up are the second half of the same day, and both belong to patient outreach when a patient with a balance is also a patient who needs to be scheduled.

Related terms

• Morning huddle: A morning huddle is a short daily meeting, usually 10 to 15 minutes before the first patient, in which a dental office team reviews the day's schedule, production goal, open time, and priority patients.
• Treatment acceptance rate: Treatment acceptance rate is the percentage of diagnosed and presented dental treatment that patients agree to and schedule, measured either by dollar value or by number of procedures over a set period.
• DSO (dental support organization): A DSO (dental support organization) is a company that provides business and administrative support services, such as human resources, billing, marketing, purchasing, compliance, and IT, to dental practices that remain clinically owned or directed by licensed dentists.

This entry is part of the MyDentalForce dental operations glossary, a plain-language reference for office managers, practice owners, and DSO operators. Definitions describe common industry usage; your group may define its own metrics differently, and figures in examples are illustrative.