Production vs Collection

What is Production vs Collection?

Production measures the value of services delivered during a period. Collection measures the cash actually received. In dental and medical practices, these two numbers diverge significantly because insurance reimbursements and patient payments arrive weeks or months after services are performed.

A practice producing $180K in a month might collect $115K in the same period. The $65K gap is not lost revenue. It is revenue in the collection pipeline waiting for insurance processing and patient payments.

The production-collection gap is structural, not temporary. Every month, new production adds to the pipeline while previous months' claims clear. The gap stabilizes at a level determined by payer mix, collection efficiency, and average processing times. Practices that grow production faster than collection speed widens the gap and increases cash pressure. See our dental practice finance guide. Monitoring the gap monthly shows whether operations are improving collection efficiency or simply adding more volume to an already strained pipeline.

Why it matters

Planning payroll around production instead of expected collections causes cash shortfalls even in profitable, growing practices. The production-collection gap is the metric that explains why your practice management report and bank account disagree.

Formula

Collection Gap = Production - Collections (for a given period)

Example

How RunwayCal helps

Common mistakes

• 1Using production as a proxy for available cash
• 2Ignoring the gap when planning growth or hiring
• 3Not tracking whether the gap is widening over time