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As your financial advisors, our work begins after money transfers from your patient to your bank account. Collections are the lifeline of your business, and although we’re not technically responsible for how you collect money, as your financial partner we take great interest that you do collect money.

When our clients want to grow collections, a very common response is to throw more money at marketing, intending to bring more patients into the practice. Or worse, they may be tempted to bring on more insurance PPO contracts to attract new business. But oftentimes, these solutions don’t address the real issue.Read More

Embezzlement is a real concern among dental practice owners, as it should be. The statistics and reports vary, but it’s safe to assume that if you don’t take precautions, then you have at least a 50/50 chance that an employee steals from you during your career. All cases of embezzlement are sad, but some are tragic, with the doctor losing hundreds of thousands of dollars.

Through our research and experience, we’ve learned that there are countless ways to embezzle from a dental practice. Because of this, we agree with dental fraud expert, David Harris from Prosperident, who contends that it is virtually impossible to guarantee against embezzlement in your practice. Instead, the goal is to reduce the risk of occurrence and to minimize the magnitude of loss.

In effort to simplify a complex topic, I have organized this issue into three lists: 1) some basic principles and practices you should follow; 2) a list of what PFG does to guard against embezzlement; and 3) a checklist of things you should be doing to address this issue. This third list – the things you should do – isn’t exhaustive. We may decide in a future blog post to give you the several page list of what you could be doing. For now, we’ll start with the most important activities first.

 
Basic Embezzlement Principles:

1. Segregation of Duties.
   If you have one person who does everything relating to money (paying bills, keeping the books, collecting money) that’s a problem. Ideally, the people who have access to cash will not have access to the accounting records, for example.
2. Hire Good People.
   Typically, someone who embezzles was dishonest before you hired them. Check references!
3. Limit Access to the Spending and Collecting of Money.
   One office we recently worked with had 8 people with company credit cards.
4. Keep a Healthy Professional Skepticism.
   An embezzler is commonly the doctor’s most trusted employee and thus has the most access to money and records.
5. Implement Internal Controls and Don’t Cut Corners.
   Internal Controls—procedures designed to reduce the risk of fraud and error—can often be annoying to work with. For example, requiring the doctor to sign every check is much more cumbersome than using a signature stamp. But don’t cut corners.

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