Deleted Transactions — Hidden Gems

Prosperident’s Wendy Askins, CFE, MBA

Deleted transactions are overlooked and ignored to our detriment. One must purposely seek to find these hidden gems to be worthy of uncovering the dark stories they tell. You will not find them visible on the patients’ ledger in most practice management software; they are only discovered by generating a separate audit log report, adjustment report, or deleted transactions report.

As a Certified Fraud Examiner, I attest to the immense value of scrutinizing deleted transactions and begin every investigation with a specialized in-depth process of review. The majority of confirmed embezzlement cases hide theft patterns in transactions that are intentionally deleted.

Confirmed embezzlement cases have suspicious deleted transactions, but, not every deleted transaction is suspicious. For example, if a retainer charge and cash payment are recorded, then both transactions are deleted without the application of a correcting transaction, the sequence likely occurred due to theft. On the other hand, if a retainer charge transaction is recorded, then deleted and reposted for the corrected amount with a cash payment amount matching the sequence likely occurred due to human error in the original retainer charge amount.

Deleted transactions conducted in an attempt to correct an error can also tell a story of an employee that needs additional training, financial policies that need revision, areas in need of improved communication, or software in need of greater customization. For example, if Olivia Office Manager continually posts insurance digital credit cards as EFT payments, then deletes the EFT payment and reposts as a credit card payment…it’s a sign that Olivia Office Manager needs more training in the differences between the two payment methods and how the error could impact the reconciliation process.

The Prosperident recommendation is to print the deleted transactions report personally (sometimes called voided, reversed, or error transactions) and review the transactions monthly. There will be a large volume of transactions contained in the report; I recommend focusing on the deleted cash payments. Identify a specific deleted cash payment then review the patient’s ledger to determine if the payment was reposted with corrections:

Fraud detection is a highly specialized skill, and there are some theft modalities which leave no trace evidence in the practice management system, such as skimming. Following the above guidelines could give the business owner advantage to uncovering embezzlement.

If you suspect embezzlement is occurring in your practice, please seek advice from individuals who specialize in financial crimes committed against orthodontic specialists. Prosperident is here to help!

Embezzlement News #91 February 2020

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Dental Embezzlement News from Prosperident
Issue #91 — February 2020
Article Series
David Harris is collaborating with fraud investigator Jean Patterson, CFE, CPA and consultant Sandy Baird MBA on a series of articles for Dentistry iQ. The theme is how to use the financial information in your practice more effectively.
The first article is HERE.
Want to make your meeting captivating?
Did you hear the one about the ex-nun accused of embezzling a million dollars from a dentist?
This sounds like the first line of a bad joke, but it’s very real. See our story HERE.
If you want an inside look at embezzlement, we would love to speak at your group or study club.
Here are some places where we will be speaking soon:
Jan 31The Ohio State University, Columbus OH
Feb 19Kamloops and District Dental Society, Kamloops BC
Feb 20Dr. Wilson Kwong study club, Vancouver BC
Feb 27Ortho2 User Group Meeting, San Diego CA
Mar 9Cloud9 User Group Meeting, Atlanta GA
Mar 11Schulman Group, Laguna Beach CA
April 1Greater Long Island Dental Meeting, Melville NY
Apr 23Richardson & Associates, Plano TX
Apr 24East Texas Study Club, Bullard TX
May 9Smile Source Exchange, Atlanta GA
Jul 3University of the West Indies, Jamaica
Oct 17Southern Association of Orthodontists, Nashville TN
2021
Feb 25Chicago Dental Society Mid-Winter Meeting, Chicago IL
For more information, click HERE or call us at 888-398-2327.
The Art of the Day End
Everyone knows that daily balancing is a key safeguard for your practice’s finances, but there is very little information available to a dentist on how to do it properly. So here’s a recipe:
  1. Which reports should be looked at? Most software can produce a lot of different reports. Most software has a report specifically designed for day-end review. It may be called a “daily summary”, “day-end report” or “daysheet”, or it may have a different name in your software. For purposes of this discussion, I will refer to it as the “daysheet”. The daysheet will normally show procedures performed, fees associated with the procedures, payments received and…
Something to Talk About…
I’m writing this shortly after Kobe Bryant’s tragic death in a helicopter crash was announced.
Whether you are a basketball fan or not, it was hard not to be impressed by Kobe’s skill, intensity, and his ability to win over the city of Los Angeles in a way that few celebrities have.
Basketball was never my sport growing up, but as the very proud father of a son who is a national-level basketball player, I’ve come to love the sport as an adult.
My son and I were fortunate to see Kobe play a couple of times, including one of his very last games in his home arena, the Staples Center in LA in 2016. He was battling a nagging ankle injury, and it was questionable whether he would be able to play.
Demonstrating the grit that made him such a decorated player, the 37-year-old shrugged off his injury and played. Kobe certainly gave 100% that night, scoring more than 20 points to the thunderous adoration of the crowd.
Kobe’s success extended well beyond basketball. He spoke several languages, was an accomplished musician, successful in business, was an Academy Award winner, and a devoted father to his four children, one of who perished in the crash with him.
The world is poorer today. RIP, Kobe.
Sincerely,
David Harris

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