Summary
Accounts receivable is money you’ve already earned but haven’t collected. A little is normal. A lot — balances aging 60, 90, or 120 days — is a silent tax on your practice: staff hours spent chasing payments, write-offs on what never arrives, and cash you can’t put to work.
Accounts receivable is money you’ve already earned but haven’t collected. A little is normal. A lot — balances aging 60, 90, or 120 days — is a silent tax on your practice: staff hours spent chasing payments, write-offs on what never arrives, and cash you can’t put to work.
This guide breaks down what aging A/R actually costs, how third-party financing removes those balances from your books, and why the smartest way to think about a financing fee is as insurance. It’s part of our series on Understanding Dental Practice Profit Margins: A Manager’s Guide.
What aging A/R actually costs
The balance on the report is only the visible part. The real cost is everything attached to carrying it:
- Carrying cost — cash tied up in receivables can’t fund payroll, supplies, or growth. It has a real opportunity cost.
- Collection labor — hours of staff time each month spent generating statements, making follow-up calls, and reconciling partial payments.
- Write-off risk — the older a balance gets, the lower the odds you ever collect it in full.
Add those together and a balance that looks like revenue-in-waiting is often costing you money every day it sits there.
How third-party financing shrinks A/R
When a patient finances through a third party, the practice is paid upfront — usually within a few business days — and the financing company handles repayment directly with the patient. The receivable simply leaves your books. You trade a small, known financing fee for fast, certain cash and zero collection labor on that balance.
The effect on your A/R aging report is immediate: financed cases never enter the 30-, 60-, or 90-day columns in the first place. Instead of managing a growing pool of balances, your team manages far fewer.
Reframe: the fee is A/R insurance
Managers sometimes resist financing fees on principle. The sharper way to see it: the fee is the premium you pay to eliminate carrying cost, collection labor, and write-off risk on that case. Weighed against the fully loaded cost of carrying a balance for 90-plus days, or never collecting it at all, a transparent financing fee is frequently the cheaper outcome.
And the lower and simpler that fee, the better the trade. Sunbit’s simple two-tier pricing, as low as 1.9% and regardless of the offer chosen, keeps the “premium” small and, just as importantly, predictable — so you can budget it rather than guess at it.
Do the math for your practice
A rough but revealing calculation:
(Average aging balance × your cost of capital) + estimated write-off rate + (monthly collection hours × loaded wage) = your true A/R carrying cost.
Compare that to the financing fee on the same balance. For most practices, financing comes out ahead.
Bonus: proactive financing keeps A/R low to begin with
The 2026 State of Dental by Sunbit report found that practices which discuss financing before presenting treatment costs maintain lower accounts receivable — by 10 points — and see stronger collections growth, by 12 points, compared with practices that only raise financing after a patient objects to price. The best A/R is the balance that never ages because it was financed from the start.
Turn aging balances into upfront deposits. With Sunbit, financed cases are funded in days — and never enter your A/R report. See how Sunbit compares →
Frequently asked questions
How does third-party financing reduce accounts receivable?
When a patient finances through a third party, the practice is paid upfront and the financing company collects from the patient directly. The balance never enters your A/R aging report, so there’s nothing to chase and no write-off risk on that case.
What does aging accounts receivable actually cost a dental practice?
Beyond the balance itself, aging A/R carries opportunity cost on tied-up cash, staff labor spent on collections, and write-off risk that grows the longer a balance ages. Together these often exceed the cost of a transparent financing fee.
Is it worth paying a financing fee to avoid A/R?
For most practices, yes. The fee functions like insurance — a small, known cost that eliminates carrying cost, collection labor, and write-off risk. Compared with the fully loaded cost of a balance aging 90-plus days, financing is frequently the cheaper outcome.
Does when I discuss financing affect my A/R?
It does. The 2026 State of Dental by Sunbit report found practices that discuss financing before presenting treatment costs maintain lower accounts receivable and see stronger collections growth than those that raise it only after a price objection.
*Funding timelines may vary. Loans are made by Transportation Alliance Bank Inc. dba TAB Bank, which determines qualifications for and terms of credit.