I recently read a Dental Tribune interview with David Harris, president of Prosperident, a company that helps detect and remedy embezzlement issues in dental practices. I recommend taking a minute to read the short interview that I linked to above as it highlights the importance of being aware of embezzlement risks within your dental practice. According to Harris, the American Dental Association and other organizations estimate the risk of embezzlement in a dental practice to be around 50 – 60%, but this number does not represent cases that were not detected or reported.
As busy dentists we have to juggle the many facets of our practices, including clinical dentistry, employee management, marketing and finances. We went to dental school to help create healthy smiles, not to become accountants. However, when the accounting is handled solely by employees, we are in a position to experience embezzlement. As a dental practice owner, you must be aware of the risk of fraud and create a plan to identify and eliminate these issues as quickly as possible.
Avoiding embezzlement begins in the hiring process by taking the time to thoroughly check references and background reports on any potential new hire who will have access to the finances. In my dental practice, I check daily reports at the end of each day to make sure treatment has been posted correctly and to take a quick glance at payments and adjustments. While my office manager handles the posting of payments, my business manager looks at daily reports to match up payments with bank deposits. Another step we take to avoid fraud is to have my business manager look at monthly adjustment and overdue account reports. From time to time, my business manager pulls random files to do a quick audit of accounts looking for red flags that may indicate the beginning of an issue.
Having a system of checks and balances in place will help with avoiding some embezzlement issues and help to discover them quicker. Your employees who handle payments should be aware that you are taking steps to monitor and address potential issues. Unfortunately, there is no fool proof system to avoid fraud in your dental practice. I have not worked with Prosperident before, but their website and services might be helpful to a dentist who is concerned about potential issues.
What steps does your office take to limit embezzlement risks?