You work with your employees all day every day and trust them to make important decisions regarding your patients and your practice, but can you trust them with your income?
Most dentists who read this article will assume it’s being written about the other guy, the one who is clueless about their financials and lets their staff run the practice. Your office staff would never steal from you, would they? Office embezzlement is an unfortunate common occurrence in many businesses including dental practices. Not only should you be concerned about financial embezzlement, but you also must be concerned about theft of supplies and time by your employees.
There are many ways of becoming a victim of employee theft. Not only is there the financial loss, but the shock that someone so close to you could cheat you in such a deceptive manner.
How can you avoid being the victim of employee theft?
Be careful of overly dedicated employees. They stay late, arrive early, they are never sick, and hate to take vacations. Oh, and they never need any help with their administrative duties. Certainly, you may very well have an all-around great, ambitious employee, but this could be a symptom of theft as well. The most common trait of an employee stealing is an employee who is always at the office. They simply do not want anyone else handling the receivables, insurance, or payables—including you. What can happen when your employee handles all the financials?
Here are just a few instances of embezzlement:
Patient payments (mainly cash) are not recorded and deposited. Or when a patient pays cash, it was noted for a lesser amount than what was received. The treatment is then posted for that patient for a lesser amount than what it was so the patient’s account would balance out to zero.
Payments to fraudulent invoices. Most dentists may not notice that a “dummy” invoice paid to Johnson Medical for syringes was never purchased for $1000.00.
Overpayment of services can occur easily when having staff hire the vendors. Would you notice that a carpet cleaning business invoiced you 20% or more over their customary rate so your employee could receive a kickback? When you are billing out hundreds of thousands of dollars, will you notice an extra $1000 invoice?
The employee bills insurance for a friend or family member with dental benefits and sends the check directly to that person for dental work which was never done.
Keys to Prevention:
According to Steve Jascewksy of Agapemed.com, a Bloomington practice management consultant group, the more sets of eyes looking at the financial aspects of the practice, the less likely that one person can do much without the others noticing. In Steve’s business, he preaches that you can’t have only one person in your office that knows how to do something.
Having one person head up the billing and also the accounting is a bad idea. Though in a small practice this can be difficult, have a different person handle a different aspect of your financials even if you must outsource the service. Steve suggests that the doctor needs to look at the report every month that shows what came in and what went out. That report needs to be concise and be a compilation of billing results, collection results and include information about the accounts payables and receivables. It then must be double checked against the bank statements and verified.
If you must delegate check signing authority, limit the accessibility and have the bank limit the value.
Move away from paying bills with checks and credit cards and pay online with you as the only authorized person to make payments.
Cross train staff so anyone can handle receivables, insurance and payables at anytime. Then insist that staff take their vacations and limit overtime.
Always check a candidate’s references. Though this will not prevent embezzlement, checking the criminal background and references on a potential employee will prevent you from hiring a serial embezzler. A local dentist who prosecuted her office manager a few years ago was shocked to find how many dentists and doctors neglected to call for a reference and hired the ex-employee. She strongly advocates checking references and investing in criminal background checks.
Employment agencies, such as Employment Plus, require all temporary staff to successfully pass reference and criminal background checks before being hired. Employment Plus also offers this service for a nominal cost for interested clients. This can be a good way to vet out any potentially problematic employees.
Dentists should not be fearful that staff are stealing from their practices, but they should be mindful of opportunities and place preventative measures and controls to limit the amounts taken.
Information provided by:
Regional Sales Manager, Employment Plus Healthcare