Chances are, you know someone like Mike. You might even be Mike (a real client, but a made-up name).
Mike had over $250,000 stolen from his dental practice. When he laid his paperwork on my desk during our first meeting, it only took a minute to see the problem. Mike hadn’t been robbed at gunpoint. More commonly, he had been embezzled by his office manager and most trusted employee, Deb.
Mike contacted me after Deb was indicted on charges of embezzlement from another job and Mike started to look deeper to into his own numbers. When he brought his past tax returns to me it was easy to spot where Deb had hidden the money and how she had committed the fraud. Over four years Deb had charged over $250,000 to her own credit card and paid it off from Mike’s operating account. Deb, who was also the “accountant” (kept Quickbooks for Mike), conveniently coded all these payments to “Lab Expense.” During these four years, Mike’s “Lab Expense” totaled more than 25% of collections. Deb was able to steal the money and clean up her tracks in the books. Mike’s local CPA, who didn’t specialize in dentistry was oblivious to what the lab expense should be and therefore didn’t ask any questions.
Mike, like so many others, was actually pretty smart.
He was an excellent dentist clinically, personable and well-liked by his patients. He was even smart enough to figure out QuickBooks himself and do his own accounting for a while before “delegating” this job to Deb.
Mike lost $250,000 because he had a bad accounting system.
But Mike’s losses don’t end there.
Mike lost out on even more profit – well over $250,000 – over the years because he didn’t have the business insights that come from good accounting.
It’s not just that Mike’s numbers were wrong (they were). Mike just didn’t know the difference between bad accounting and good accounting.
You have to understand the difference between bad accounting and good accountingto be a successful dentist. Good accounting doesn’t just protect you from thieves. The real power of accounting lies in the ability to make good business decisions.
The biggest, most successful and best run companies in the world – Apple, Google, Microsoft and thousands of others – know the importance of good accounting. They spend millions of dollars on sophisticated accounting systems and people every year.
Savvy business people understand the value of good accounting. As a dental business owner you should too.