Are you at risk?

Home > Services > Are you at risk?

Is your practice at risk for employee theft?

About 70% of practices will be embezzled sooner or later.  As Prosperident performs hundreds of embezzlement investigations annually, we get face-to-face with the warning signs that are present when someone becomes a victim. 

There are two places where these signs can appear; financial irregularities and how the thief behaves.  While statistically, more embezzlement is identified through behavioral indicia, the presence of either category should be cause for concern, and the presence of both concurrently is a large danger signal. 

If you have concerns about your practice, or wish to learn more about putting safeguards in place to protect you, click the box below.



What is your risk?

Behavioral Indicators

In a 2019 survey conducted by the ADA, dental embezzlement victims reported the following behaviors from thieves (please note that the total exceeds 100% due to thieves exhibiting multiple behaviors):

Territoriality, defensiveness, and a desire to have "alone time" at your practice are the three that we see most frequently.  Often thieves are reluctant to go on vacation because being absent from the office means that they cannot control the flow of information through the practice.

Others that we regularly observe that did not make it onto the ADA's list include:

  • "Conspicuous displays of honesty" (where someone makes a point of telling or showing you how honest they are being
  • Cutting corners either personally or professionally.  This may be the person who the patient see as the "insurance whisperer" who can get things covered under dental benefit plans, or it may be the person who will move out of their apartment in the middle of their lease.
  • Evident financial problems of the employee or someone who is visibly living beyond their means.
  • Patient complaints or enquiries re the accuracy of their accounts.
  • A staff member is unreasonably resistant to change or who resists the involvement of outsiders like consultants.


Financial Indicators

Here are some of the financial indicators that embezzlement could be taking place:

  • Collections according to practice management software do not correspond to deposits at the bank.  This should be measured over longer periods (months or years at a time) to reduce the impact of "timing differences" caused by transactions that are captured on different dates by your management software versus your bank.  If you aren't sure how to do this, there is great information in David Harris' book Healers versus Stealers, available on Amazon.  
  • Day-end balancing is either not performed or is not supervised by the practice owner.
  • Accounts receivable are higher than they should be for the nature of the practice and/or are not supervised by the practice owner.
  • Outstanding insurance claims are high or unsupervised.
  • Your collection ratio measured as annual collections divided by adjusted production declines over time, or your adjustment ratio (annual total of adjustments divided by gross production) increases over time 
  • Adjustments are high or cannot be satisfactorily explained.  When reviewing adjustments, a verbal explanation is never sufficient.  Insurance-driven adjustments should be able to be backed up by an Explanation of Benefits provided by the insurance company.
  • Bank deposits are made infrequently.  Having a bigger "float" of cash and checks facilitates some embezzlement schemes.
  • Duties are not properly divided.  There are five tasks in a practice's revenue cycle.  The first, entering treatment, should always be done by the clinician.  Here are the remaining four tasks:
    1. Receive payment
    2. Record the payment in practice management software
    3. Balance daily collections to deposits
    4. Deposit daily receipts.  

There are two basic rules about dividing these four duties.  No person should do more than two of the four, and their two should not be consecutive.  So overconcentration of duties in a single person is a warning sign.  Overconcentration in the hands of someone who is territorial and will not delegate or cross-train is a huge warning sign.

After reading this, if you are a practice owner with concerns, please click below and a member of our management team will respond.



© 2024 - Prosperident | Designed in Halifax, Nova Scotia by: immediac