--- title: "Dental Production vs. Collections: The Gap Explained" description: Learn the difference between production and collections in dental practices. Understand why the gap matters. image: https://reciprocityaccounting.com/hubfs/blog-images/post_211554708402.png --- [Skip to content](https://reciprocityaccounting.com/blog/production-vs-collections-dental-practice#main-content) [![](https://reciprocityaccounting.com/hs-fs/hubfs/logo-horizontal-transparent.png?width=1298&height=290&name=logo-horizontal-transparent.png)Homepage](https://reciprocityaccounting.com) - [Services](https://reciprocityaccounting.com/services) - [Pricing](https://reciprocityaccounting.com/pricing) - [FAQ](https://reciprocityaccounting.com/faq) - [Blog](https://reciprocityaccounting.com/blog) - [About](https://reciprocityaccounting.com/about) [Book a Discovery Call](https://reciprocityaccounting.com/contact) - [Services](https://reciprocityaccounting.com/services) - [Pricing](https://reciprocityaccounting.com/pricing) - [FAQ](https://reciprocityaccounting.com/faq) - [Blog](https://reciprocityaccounting.com/blog) - [About](https://reciprocityaccounting.com/about) [Book a Discovery Call](https://reciprocityaccounting.com/contact) ![Reciprocity Accounting card: Dental Production vs. Collections: The Difference, a Compare post.](https://reciprocityaccounting.com/hs-fs/hubfs/blog-images/post_211554708402.png?width=1200&height=630&name=post_211554708402.png) Compare # What Are Dental Production and Collections, and Why Does the Difference Matter? ![Greg Hudnall](https://app.hubspot.com/settings/avatar/49dbd5c12b604f92786349ba17b92e2c) Greg Hudnall April 8, 2026 Compare  ·  9 min read Production is what you did; collections is what you kept. The distance between those two numbers is where most dental practices quietly lose money. Production and collections are the two most important numbers in dental practice finance. They sound like they should be the same thing. They’re not. And the gap between them is where most of the financial confusion in dental practices lives. If you’ve ever looked at your production report and wondered why your bank account doesn’t match, this post explains why. ## Production: What You Did Production is the dollar value of dental work performed, measured on the date of service. When a patient sits in the chair and receives a crown, the fee for that crown is production. It doesn’t matter whether the patient has paid yet. It doesn’t matter whether the insurance claim has been filed. Production is recorded the day the work happens. There are two versions of production that matter: - **Gross production** is the full fee-schedule value of the work performed. If your fee for a crown is $1,200, that’s $1,200 of gross production, regardless of what insurance actually pays. - **Net production** is gross production minus contractual adjustments. If you’re in-network with a PPO and the contracted rate for that crown is $900, the $300 difference is a [contractual write-off, which is not the same thing as bad debt](https://reciprocityaccounting.com/blog/dental-insurance-write-offs-vs-bad-debt). Your net production for that procedure is $900. This is the number that matters for benchmarking because it represents what you can actually expect to collect. Production is your leading indicator. It tells you how much work your practice performed. It’s driven by patient volume, schedule utilization, treatment acceptance, and the mix of procedures your team is performing. If production is growing, the practice is growing. If it’s flat or declining, something upstream needs attention: fewer patients, lower case acceptance, or a shift toward lower-value procedures. ## Collections: What You Received Collections is the money that actually arrived in your bank account. It’s measured on the date the payment clears, not the date the work was performed. Collections come from several sources: - **Insurance payments.** The largest component for most practices. Arrives 2 to 8 weeks after the procedure, depending on the carrier, claim complexity, and whether the practice submits electronically. - **Patient copays and coinsurance.** Collected at the front desk on the day of service. This is real cash, collected immediately, and it’s the portion of collections most directly controlled by your team. - **Patient balances.** Amounts owed by the patient after insurance pays. These are billed after the EOB arrives and may take weeks or months to collect, if they’re collected at all. - **Third-party financing.** CareCredit, Cherry, Sunbit, in-house membership plan payments. These have their own timing and fee structures. Collections is your trailing indicator. It tells you how much money you received, but it doesn’t tell you when the work was done. A single month’s collections include payments from procedures performed over the prior 1 to 3 months, depending on insurance processing speed. That’s why collections can swing significantly month to month even when production is steady. ## The Gap Between Them In a healthy dental practice, there are two gaps between production and collections. Both are normal. Both need to be understood. ### Gap 1: Contractual adjustments (production to net production) If your practice participates in PPO networks, you’ve agreed to accept a contracted fee that’s lower than your standard fee schedule. The difference is a contractual write-off. This is not lost revenue. It’s the cost of being in-network. For a PPO-heavy practice this is usually the single largest gap between what you produce and what you bank. How large depends entirely on which plans you are in and what you negotiated, and the published estimates vary far too widely to be worth quoting at your practice. Your practice management software reports your actual adjustment percentage. That is the number to manage against. Example: A practice with $200,000 in gross monthly production and an average PPO adjustment of 20% has net production of $160,000. That $40,000 adjustment is expected and permanent. You will never collect it. Some practices are choosing to eliminate this gap entirely by dropping PPO networks and [moving to fee-for-service](https://reciprocityaccounting.com/blog/dental-fee-for-service-financial-model). When contractual adjustments disappear, the production-to-collections math gets significantly cleaner and so do the books. That transition has its own financial and accounting implications worth understanding before making the move. We'll cover it in a separate post. ### Gap 2: Timing lag (net production to collections) Even after adjustments, there’s a delay between when you earn the revenue and when it arrives. This is the [insurance processing lag](https://reciprocityaccounting.com/blog/how-insurance-timing-distorts-dental-financials). For a practice producing $160,000 in net production per month, several weeks of net production, often $80,000 or more, can be sitting in the claims pipeline at any time, earned but not yet collected. This timing lag is why [monthly collections don’t match monthly production](https://reciprocityaccounting.com/blog/why-cash-basis-misleads-dental-owners). It’s not a problem. It’s the normal mechanics of dental insurance. But if your accounting doesn’t distinguish between the two, you can’t tell whether a low-revenue month is a production problem or a collections timing problem. ## The Number That Connects Them: Collection Rate Your [collection rate](https://reciprocityaccounting.com/blog/dental-practice-collection-ratio) is the bridge between production and collections. It tells you [how much of what you earned you actually collected](https://reciprocityaccounting.com/blog/how-dental-practice-collections-work). **Collection rate = Net collections ÷ Net production** A healthy dental practice should have a collection rate of 98 to 100%, per the [2024 ADCPA/NSCHBC Benchmark Report](https://wa.nschbc.org/nschbc-benchmarks-report). That means for every dollar of net production, you’re collecting 98 cents or more. If your collection rate is below 98%, money is leaking. The most common causes: - Uncollected patient copays at the front desk - Patient balances that go to statement but are never followed up on - Claims that are denied and not resubmitted - Incorrect fee schedules in the PMS that overstate net production - Write-offs being applied to the wrong category (bad debt vs. contractual adjustment), which is why [how you handle write-offs in the books](https://reciprocityaccounting.com/blog/dental-insurance-write-offs-bookkeeping) matters Important: collection rate should be measured over a trailing period (3 months, 6 months, or 12 months), not a single month. In any single month, the timing lag between production and collections makes the ratio unreliable. Over a trailing period, the timing noise washes out and the number tells you something real. ## Why Your Practice Management Software Tracks Both Your PMS ([Open Dental, Dentrix, Eaglesoft, Carestream](https://reciprocityaccounting.com/blog/open-dental-vs-dentrix-vs-eaglesoft-bookkeeping)) already tracks production and collections separately. It has to, because production is recorded at the procedure level on the date of service, and payments are recorded when they arrive. The Production and Income report in your PMS shows gross production, adjustments, and net production by date range. The Deposit report or Payment report shows what was collected by payment type and date. The problem is that most general bookkeepers don’t use PMS data. They work from bank deposits. When $8,500 hits the bank from Delta Dental, they record $8,500 in revenue. They don’t know or track which procedures that payment was for, when those procedures were performed, or how much production remains uncollected. This is the core gap between [general bookkeeping and dental-specific accounting](https://reciprocityaccounting.com/blog/how-much-does-dental-bookkeeping-cost). A dental-specific accountant pulls both sets of data, from the PMS and from the bank, and reconciles them. That reconciliation is what gives you visibility into your collection rate, your insurance aging, and whether your revenue trends reflect real production changes or just insurance timing. ## What to Watch For If you’re tracking production and collections separately (or want to start), here are the signals that matter: - **Production trending down while collections stay flat:** This is a leading indicator. Your practice is doing less work, but because insurance payments from prior months are still arriving, it doesn’t show up in cash revenue yet. By the time collections catch up to the production decline, you’ve lost months of early warning. - **Collections dropping while production stays flat:** This usually means a collection problem, not a production problem. Claims are being denied, front desk copay collection has slipped, or patient balances are aging without follow-up. - **Collection rate declining gradually:** If your trailing collection rate drops from 99% to 96% over 6 months, money is leaking. The cause is usually one of the items listed above. A 3-point decline on $1.8M in annual net production is $54,000 in lost revenue. - **Gross-to-net production ratio changing:** If your adjustments are growing as a percentage of gross production, you may be taking on more PPO patients or your fee schedule needs updating. Neither is visible if you only track collections. *P.S.* [*Reciprocity Accounting*](https://reciprocityaccounting.com) *tracks dental production and collections separately so you can see exactly what you produced versus what you actually kept.* [*See how we can help your practice.*](https://reciprocityaccounting.com/contact) ## Frequently Asked Questions ### What’s the difference between production and revenue? In dental, production refers to the value of work performed, measured on the date of service. Revenue on a [cash basis](https://reciprocityaccounting.com/blog/cash-vs-accrual-dental-practice) refers to money collected, measured on the date of deposit. They represent different things and occur at different times. Production is the work. Revenue (on a cash basis) is when you get paid for it. ### Which number should I use to track practice growth? Net production is the better indicator of practice growth because it reflects the work your team performed, independent of insurance timing. Collections is a trailing indicator. Use it for cash flow planning and annual financial analysis, but don’t use monthly collections to judge whether your practice is growing or shrinking. ### My P&L only shows one revenue number. Is that production or collections? If your books are on a cash basis (most dental practices are), the revenue line on your P&L is collections. It reflects deposits, not production. To see production data, you need to pull reports from your practice management software. A dental-specific accountant integrates both sets of data into your monthly reporting. ### What is a good collection rate for a dental practice? 98% to 100% of net production, measured on a trailing basis (3 to 12 months). Below 98% means money is leaking between the procedure and the bank. Above 100% can happen temporarily when you collect on older outstanding balances, but sustained rates above 100% usually indicate that your net production calculation includes adjustments that shouldn’t be there. To see how your own collection rate and production numbers compare against healthy dental ranges, our free [Dental Practice Benchmark Scorecard](https://reciprocityaccounting.com/benchmark-scorecard) lets you check them in about two minutes. **Related reading:** - [Dental Accounts Receivable Aging: The 90-Day Problem](https://reciprocityaccounting.com/blog/dental-accounts-receivable-aging) - [PPO vs. FFS vs. Medicaid: What Your Payer Mix Does to Collections](https://reciprocityaccounting.com/blog/dental-practice-payer-mix) - [Dental Practice Bad Debt: How to Reduce, Track, and Trend It](https://reciprocityaccounting.com/blog/dental-practice-bad-debt) ## Share this post [mailto:https%3A%2F%2Freciprocityaccounting.com%2Fblog%2Fproduction-vs-collections-dental-practice](mailto:https%3A%2F%2Freciprocityaccounting.com%2Fblog%2Fproduction-vs-collections-dental-practice) ## Keep reading ### [![Owner Pay in the Books, Reciprocity Accounting](https://reciprocityaccounting.com/hs-fs/hubfs/blog-images/post_58.png?width=1200&height=630&name=post_58.png) How To Owner Pay in a Dental Practice: How to Account for It Correctly](https://reciprocityaccounting.com/blog/dental-practice-owner-compensation-bookkeeping) ### [![Associate Cost Percentage, Reciprocity Accounting](https://reciprocityaccounting.com/hs-fs/hubfs/blog-images/post_57.png?width=1200&height=630&name=post_57.png) How To Associate Cost Percentage: How to Know If Your Associate Is Profitable](https://reciprocityaccounting.com/blog/dental-associate-cost-percentage) | ![Reciprocity Accounting](https://reciprocityaccounting.com/hubfs/logo_horizontal_dark_transparent.png) Accounting built for dental practices. 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Revenue on a cash basis refers to money collected, measured on the date of deposit. They represent different things and occur at different times. Production is the work. Revenue (on a cash basis) is when you get paid for it." }, "name" : "What’s the difference between production and revenue?" }, { "@type" : "Question", "acceptedAnswer" : { "@type" : "Answer", "text" : "Net production is the better indicator of practice growth because it reflects the work your team performed, independent of insurance timing. Collections is a trailing indicator. Use it for cash flow planning and annual financial analysis, but don’t use monthly collections to judge whether your practice is growing or shrinking." }, "name" : "Which number should I use to track practice growth?" }, { "@type" : "Question", "acceptedAnswer" : { "@type" : "Answer", "text" : "If your books are on a cash basis (most dental practices are), the revenue line on your P&L is collections. It reflects deposits, not production. To see production data, you need to pull reports from your practice management software. A dental-specific accountant integrates both sets of data into your monthly reporting." }, "name" : "My P&L only shows one revenue number. Is that production or collections?" }, { "@type" : "Question", "acceptedAnswer" : { "@type" : "Answer", "text" : "98% to 100% of net production, measured on a trailing basis (3 to 12 months). Below 98% means money is leaking between the procedure and the bank. Above 100% can happen temporarily when you collect on older outstanding balances, but sustained rates above 100% usually indicate that your net production calculation includes adjustments that shouldn’t be there. To see how your own collection rate and production numbers compare against healthy dental ranges, our free Dental Practice Benchmark Scorecard lets you check them in about two minutes." }, "name" : "What is a good collection rate for a dental practice?" } ], "name" : "Dental Production vs. Collections: The Gap Explained", "publisher" : { "@type" : "Organization", "name" : "Reciprocity Accounting", "url" : "https://reciprocityaccounting.com" }, "url" : "https://reciprocityaccounting.com/blog/production-vs-collections-dental-practice" } ```