Growing Fast? A/R Trouble Could Be Your DSO’s Weakest Link

Growth is exciting—especially in the dental industry, where dental service organizations (DSOs) are scaling rapidly to meet demand and gain market share. But as more practices join your DSO network and production numbers surge, problems can begin to surface behind the scenes.

Forbes said it best: 

“Growth is an important goal for every company, especially for a new or small business looking to gain traction. However, too much growth over a short period of time can actually be dangerous. If a business continues to scale without adequate tools and resources to handle it, it won’t be able to sustain itself in the long run.” 

When growth isn’t supported by the right people and processes in place, chaos will be a result from that growth. This is true for all businesses, and we see it often with DSOs. 

One of the most critical and overlooked components that directly impacts—and impedes—scalable growth is your accounts receivable (A/R) process. If your DSO’s A/R isn’t keeping pace with your expansion, it can sabotage your financial performance and quietly stall your momentum.

We see this at DCS when DSOs and emerging dental groups contact us to take on their A/R clean-up projects—which we’re happy to handle. From these experiences, we’ve identified 4 reasons why so many DSOs accumulate A/R backlogs in the first place.

This article will explore why A/R tends to break down during rapid DSO growth, warning signs that A/R is holding back your DSO, and the hidden costs associated with it. But don’t worry—we’ll also offer solutions.

Key takeaways for managing your A/R to scale with DSO production growth:

• Standardize collections across all locations to reduce errors and payment delays.
• Monitor A/R trends closely—rising aging balances and frequent write-offs are red flags that growth is outpacing collections.
• Centralize, outsource, or automate A/R processes to protect cash flow, streamline operations, and maintain patient trust.

4 reasons why accounts receivable (A/R) breaks down during rapid DSO growth

Scaling a DSO isn’t just about opening new locations—it’s also about maintaining control across all of them. Unfortunately, A/R processes are often the first to break down. Here's why:

1. Inconsistent billing workflows. Each location may have its own processes, systems, and even terminology. Without a standardized approach to billing and collections, you’ll run into delays, errors, and miscommunication. These inconsistencies among your locations can lead to costly consequences.
   
   
2. More patients = more complexity. A higher patient volume means more statements to send, more balances to follow up on and, unfortunately, more opportunities for error. If your systems aren’t built to scale, and you don’t have the right people with the right expertise in place, the faults in your workflows will soon start to show. The result? Lost revenue and poor patient experiences.
   
   
3. Visibility gaps between systems. Many DSOs inherit or combine multiple practice management systems across locations. If those systems don’t integrate or communicate, it’s challenging to monitor real-time A/R performance or standardize processes—and that will only get worse as additional disparate systems are added. 
   
   
4. Staff turnover and lack of training. Rapid growth often leads to new hires and changing responsibilities. If staff aren’t properly trained or if billing responsibilities aren’t clearly defined, aging balances can start to pile up. Standardized systems across all locations can ease this issue.

These problems don’t all occur at once or overnight. They tend to appear as small problems that quietly worsen until they become big problems. Fortunately, there are specific reports and things to look for that show clear signs when your A/R is negatively impacting your dental business. 

Your 4 warning signs that A/R is slowing down your DSO

If your DSO is growing on paper, but cash flow feels tighter than it should, look for these red flags indicating that your accounts receivable has an overwhelming backlog—or soon will:

1. Unpaid claims and patient balances over 60 or 90 days are increasing. A visible trend or sudden spike in long-outstanding balances is a key indicator that your collections process has fallen behind. When it becomes overwhelming, you’ll need more time, extra staff, or deeper expertise to collect it all—possibly all three.
   
   
2. Frequent write-offs labeled as “uncollectible.” High production is wasted if you’re routinely writing off revenue that could have been collected. Your dentists are doing the work, so efficient and scalable processes must be in place to collect payment for it.
   
   
3. Confusion over who handles collections. When no team member owns A/R (or multiple team members own pieces of it), follow-up can easily slip through the cracks, particularly during vacations, long-term absences, and periods of turnover. This often leads to burnout and frustration as your team strives to catch up and keep up.
   
   
4. Revenue doesn’t parallel production. If production numbers are rising, but your collections are lagging behind, A/R inefficiency could be the silent drain on revenue that you didn’t know you had. There’s no clamor as patient balances remain unpaid and timely filing deadlines pass without reimbursement.

Read More: Sky-high Dental A/R? Here's how to boost dental insurance collections

4 hidden costs of poor A/R management—that all impact your bottom line (and your entire DSO)

Let’s be clear: inefficient A/R doesn’t just slow things down in your front office—it can drag down your entire DSO’s performance and value. Here’s the range of its impact: 

1. Interrupted cash flow. Delayed payments mean fewer resources for new equipment, staff salaries and raises, or even expanding locations. And as payments become unrecoverable due to timely filing deadlines or patient disputes, there will be a permanent impact on the bottom line. 
   
   
2. Lower valuation. A DSO with unmanaged or unmanageable A/R appears riskier to investors—they don’t want to see 10%-40% of revenue left in limbo. Clean financials are crucial for funding rounds or potential acquisitions.
   
   
3. Operational inefficiencies. When your team spends more time fixing problems than driving progress, every department—from the front desk to finance—will feel the impact. Your patients will feel it, too.
   
   
4. Damaged patient trust. When bills are sent late or reminders are inconsistent, patients get frustrated. This damages their experience and long-term loyalty. It also makes them less likely to pay in full, if at all.

So… what can you do? Don’t worry—now that you’ve seen the problems, we’ve got solutions for you.

4 ways your growing DSO can get its A/R under control—fast

If your teams are struggling with A/R as your DSO grows, you’re not alone—and you do have options.

1. Standardize your workflows. Establish consistent billing and collection procedures across all locations. This eliminates confusion and ensures accountability—it also simplifies training, as well as daily operations.
   
   
2. Centralize or outsource A/R. You can build a centralized internal billing team or partner with experts who know dental A/R inside and out. DCS offers an A/R Special Projects service that specializes in clearing your backlog, plus services and software to manage your day-to-day collections. 
   
   
3. Track the right metrics. Use real-time data dashboards to monitor days in A/R, aging buckets, and collection rates by location. The earlier you spot trends and spikes, the sooner you can respond—long before a pile of payments becomes irretrievable write-offs.
   
   
4. Automate patient follow-up. Automated reminders via text and email—with direct links for online payment—take the pressure off your team to maintain consistent contact while making it easy for your patients to pay. Automatic write-back to your PMS is a rare hands-free feature that saves time, prevents errors, and keeps financial reporting up-to-date.

You’ve invested time, money, and strategy into expanding your DSO. Your accounts receivable is entirely within your control; don’t let it be the reason your DSO’s growth slows down.

Your choices: Either reorganize your processes from top to bottom and standardize them across locations, or seek help from dental A/R experts like we have at DCS. 

One of our A/R Special Projects client-partners recounts their experience with DCS: 

“Before working with DCS, we had too many old claims, and were not able to get caught up. Once we partnered with DCS, we noticed an immediate reduction in AR due to catching up on posting, then starting to work aging. They were very responsive, and Ana was amazing: Very knowledgeable and friendly! We continue to be impressed with the great communication and ease of onboarding with DCS. I absolutely recommend DCS!” —Steve Kuchuris, Chief Operating Officer of Yellowstone Family Dental

Either way, you can combat the A/R headaches that are hurting your bottom line. 

Remove the A/R bottleneck in your DSO’s growth

To recap, you learned: 

• 4 reasons why accounts receivable (A/R) breaks down during rapid DSO growth
• 4 warning signs that A/R is slowing down your DSO
• 4 hidden costs of poor A/R management—that all impact your bottom line (and your entire DSO)
• 4 ways your growing DSO can get its A/R under control—fast

A clean, efficient A/R process is the foundation of scalable collection operations. If yours is already showing those signs of strain, it’s time to take action now—before your next acquisition, or before you lose more claim reimbursements to timely filing deadlines.

Your teams deserve stress-free collections processes that free them to shape a better patient experience, and your patients deserve seamless billing that builds their trust in you.

When you’re ready to take back control of your A/R processes, and collect all the revenue you’ve earned, book a free 30-minute consultation with DCS today.