Articulation - Prevention's Best Kept Secret
Home > Media > Embezzlement Blog > Articulation - Prevention's Best Kept SecretWhat You'll Learn
- A simple daily-monthly reconciliation technique called "articulation": print and initial the day-end "daysheet" before leaving each day, lock it in a drawer, then verify that a month's worth of daysheets for fees billed, adjustments, and payments received match the practice management software's month-end summary to the penny.
- Why a mismatch matters: any discrepancy between the summed daily daysheets and the month-end totals is a red flag that someone entered transactions in the software after hours or on a weekend, pointing to hidden activity that needs investigating.
- The article's core prevention principle, "Communicate Your Expectations. Loudly.", which argues that clearly articulating financial policies to staff is one of the most powerful deterrents to embezzlement.
- The technique comes from David Harris, Prosperident's CEO, a forensic CPA and Certified Fraud Examiner (CFE/CFF) who has investigated dental financial crimes since 1989.
Articulation - Prevention's Best Kept Secret
When we use the word "articulation" when speaking with a dentist, inevitably we evoke an image of the mandible and maxilla functioning in harmony. There is a second concept of articulation in dentistry, and it is one that most dentists have not been exposed to.
This second articulation, which is labeled "financial articulation" is a quick and highly effective financial control mechanism for a dental practice, and is probably one of the best kept secrets in dental practice management.
Financial Articulation ensures that practice management software transactions are not concealed from a practice owner by being entered outside of normal practice hours. Put alternatively, for a practice owner who monitors their practice by reviewing day-end reports (which are sometimes called "daysheets"), financial articulation is the method of ensuring that all transactions that have occurred in a given month were included on the daily reports that you have reviewed.
So how do you do an articulation calculation? It's pretty simple. First, you need build the habit of printing and reviewing your practice's day-end report every day before you leave your practice. Doing the review the next day, or on Monday following a couple of days off, is ineffective. And printing "after the fact" daysheets in bulk at the end of the month will not work for this purpose.
Next, put your initials on the daysheet you just reviewed (to provide confirmation that was the exact daysheet that you looked at) and put it in a safe place, normally a locked drawer.
At the end of the month, print a month-end summary from your practice management software. We are now going to perform a very simple calculation involving three totals from the reports. Both day-end and month-end reports provide totals for fees billed, adjustments made, and payments received for the applicable periods covered by that specific report. Financial articulation involves totalling each of these items for all the daysheets for the month and comparing it to the month-end report. So if your practice was open 17 days last month, adding up the fees billed from each of the 17 day end reports should equal the total fees according to the month-end report to the penny. The same equality should apply to adjustments and payments.
If one or more of these three totals does not articulate, this is usually caused by someone making entries in your practice management software after hours or on a weekend. Possibly this is benign and you simply were unaware of the activity (and therefore did not print a daysheet covering those entries) or this is a result of a deliberate attempt to skirt your scrutiny, but now you need to track the extracurricular entries down and decide whether or not you have a reason for concern.
We are always happy to speak with a practice owner who has discovered an articulation issue. Please click the link below to arrange a time to speak with us.
Communicate Your Expectations. Loudly.
Clear articulation of financial policies is one of the most powerful deterrents to embezzlement. Prosperident's Owner Proactive Strategies helps you create the culture and communication systems that protect your practice.
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When we use the word "articulation" when speaking with a dentist, inevitably we evoke an image of the mandible and maxilla functioning in harmony. There is a second concept of articulation in dentistry, and it is one that most dentists have not been exposed to.
This second articulation, which is labeled "financial articulation" is a quick and highly effective financial control mechanism for a dental practice, and is probably one of the best kept secrets in dental practice management.
Financial Articulation ensures that practice management software transactions are not concealed from a practice owner by being entered outside of normal practice hours. Put alternatively, for a practice owner who monitors their practice by reviewing day-end reports (which are sometimes called "daysheets"), financial articulation is the method of ensuring that all transactions that have occurred in a given month were included on the daily reports that you have reviewed.
So how do you do an articulation calculation? It's pretty simple. First, you need build the habit of printing and reviewing your practice's day-end report every day before you leave your practice. Doing the review the next day, or on Monday following a couple of days off, is ineffective. And printing "after the fact" daysheets in bulk at the end of the month will not work for this purpose.
Next, put your initials on the daysheet you just reviewed (to provide confirmation that was the exact daysheet that you looked at) and put it in a safe place, normally a locked drawer.
At the end of the month, print a month-end summary from your practice management software. We are now going to perform a very simple calculation involving three totals from the reports. Both day-end and month-end reports provide totals for fees billed, adjustments made, and payments received for the applicable periods covered by that specific report. Financial articulation involves totalling each of these items for all the daysheets for the month and comparing it to the month-end report. So if your practice was open 17 days last month, adding up the fees billed from each of the 17 day end reports should equal the total fees according to the month-end report to the penny. The same equality should apply to adjustments and payments.
If one or more of these three totals does not articulate, this is usually caused by someone making entries in your practice management software after hours or on a weekend. Possibly this is benign and you simply were unaware of the activity (and therefore did not print a daysheet covering those entries) or this is a result of a deliberate attempt to skirt your scrutiny, but now you need to track the extracurricular entries down and decide whether or not you have a reason for concern.
We are always happy to speak with a practice owner who has discovered an articulation issue. Please click the link below to arrange a time to speak with us.
Communicate Your Expectations. Loudly.
Clear articulation of financial policies is one of the most powerful deterrents to embezzlement. Prosperident's Owner Proactive Strategies helps you create the culture and communication systems that protect your practice.
About the author
David Harris
Forensic CPA, CFE, CFF, FIADFE — Chief Executive Officer, Prosperident
David Harris is the Chief Executive Officer of Prosperident, the world's largest dental embezzlement investigation firm. A Forensic CPA, Certified Fraud Examiner, and Certified in Financial Forensics, he has led investigations into financial crime in dental practices since 1989 and speaks regularly to dental audiences across North America on detecting and preventing embezzlement.
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