I’m a New Practice Owner. What Should I be Doing to Protect My Practice?
Home > Media > Embezzlement Blog > I’m a New Practice Owner. What Should I be Doing to Protect My Practice?What You'll Learn
- Why checking a job candidate's former employers matters more than a criminal background check alone, since (per the article) 70 million Americans have criminal convictions yet past job performance is the best predictor of future conduct.
- A daily and monthly financial-monitoring routine (reviewing transactions, verifying bank deposits, reconciling collections) that author David Harris says takes just five to ten minutes a day and an hour once a month.
- Why receivables and insurance-claims reviews should never be delegated to staff, even when tasks like deposit verification are outsourced to an external bookkeeper.
- Why a written employee-handbook policy encouraging staff to report concerns about coworkers is needed, since dental employees are described as far less likely than workers in other industries to speak up on their own.
I’m a New Practice Owner. What Should I be Doing to Protect My Practice?
Embezzlement protection involves a few big steps and a lot of small items, and they can seem daunting for a new practice owner. For this post, let’s address the big items.
That is an excellent question.
They are proper hiring, financial monitoring, and creating a climate where an employee with suspicions about a co-worker will feel comfortable coming forward.
Hiring
Most dentists know far less about the people they hire than they should. When we say the words “background check” to many dentists, what they hear is the need to check whether someone has a criminal record. With 70 million Americans having criminal convictions, criminal records are part, but by no means all, of what should be checked. The most important investigative step, and often skipped, is the need to speak with former employers. The best predictor of what kind of employee you will have is how this person performed as an employee in the past.
There are many other good sources of information, such as doing a drug test and examining how someone conducts themselves on social media.
Financial Monitoring for the New Practice Owner
The second component is the financial monitoring of your practice. We see far too many “I’m a clinician only” dentists who completely abdicate their finances to staff with no oversight whatsoever. If you leave your finances in the hands of staff without supervision, you will probably be embezzled sooner or later.
At an absolute minimum, the following should be done:
- A daily review of transactions in your practice management software to look for errors and suspicious entries.
- A monthly confirmation that the amount that should have been deposited in your bank account according to your practice management software actually was deposited. The good news is that, unlike the daily review of transactions, this step can be comfortably outsourced to an external bookkeeper.
- A monthly confirmation that the total revenue, collections, and adjustments from all of the day-end reports you have received equals the totals for the same items from a month-end summary report from your software. This task can also be outsourced, or we have a spreadsheet that you can use to do the math for you and make this a quick and easy process.
- A monthly review of your receivables and insurance claims that have been sent but not paid by insurance to look for unfavorable trends and other anomalies. This activity should not be delegated.
To read an article from Dental Economics magazine on financial controls, click HERE.
Encouraging Employees
The third component is to create a climate where, if a staff member thinks that a co-worker is up to something, that staff member feels comfortable approaching you with his or her concerns. Staff in dental practices are far less likely to express their concerns than people in other businesses. Having a well-thought-out policy that is communicated to employees through their employee handbook is a good way to provide comfort to staff who are wrestling with whether to approach you on their suspicions.
This monitoring doesn’t need to be an arduous process. Five to ten minutes per day and an hour once per month are enough time to do this if some outsourcing assistance is used.
Start Your Ownership With the Right Protections in Place.
New practice owners are among the most vulnerable to embezzlement—precisely because they're still building trust with staff. Prosperident's First Look review establishes your financial baseline from day one.
Concerned about embezzlement in your practice?
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That is an excellent question.
Embezzlement protection involves a few big steps and a lot of small items, and they can seem daunting for a new practice owner. For this post, let’s address the big items.
They are proper hiring, financial monitoring, and creating a climate where an employee with suspicions about a co-worker will feel comfortable coming forward.
Hiring
Most dentists know far less about the people they hire than they should. When we say the words “background check” to many dentists, what they hear is the need to check whether someone has a criminal record. With 70 million Americans having criminal convictions, criminal records are part, but by no means all, of what should be checked. The most important investigative step, and often skipped, is the need to speak with former employers. The best predictor of what kind of employee you will have is how this person performed as an employee in the past.
There are many other good sources of information, such as doing a drug test and examining how someone conducts themselves on social media.
Financial Monitoring for the New Practice Owner
The second component is the financial monitoring of your practice. We see far too many “I’m a clinician only” dentists who completely abdicate their finances to staff with no oversight whatsoever. If you leave your finances in the hands of staff without supervision, you will probably be embezzled sooner or later.
At an absolute minimum, the following should be done:
- A daily review of transactions in your practice management software to look for errors and suspicious entries.
- A monthly confirmation that the amount that should have been deposited in your bank account according to your practice management software actually was deposited. The good news is that, unlike the daily review of transactions, this step can be comfortably outsourced to an external bookkeeper.
- A monthly confirmation that the total revenue, collections, and adjustments from all of the day-end reports you have received equals the totals for the same items from a month-end summary report from your software. This task can also be outsourced, or we have a spreadsheet that you can use to do the math for you and make this a quick and easy process.
- A monthly review of your receivables and insurance claims that have been sent but not paid by insurance to look for unfavorable trends and other anomalies. This activity should not be delegated.
To read an article from Dental Economics magazine on financial controls, click HERE.
Encouraging Employees
The third component is to create a climate where, if a staff member thinks that a co-worker is up to something, that staff member feels comfortable approaching you with his or her concerns. Staff in dental practices are far less likely to express their concerns than people in other businesses. Having a well-thought-out policy that is communicated to employees through their employee handbook is a good way to provide comfort to staff who are wrestling with whether to approach you on their suspicions.
This monitoring doesn’t need to be an arduous process. Five to ten minutes per day and an hour once per month are enough time to do this if some outsourcing assistance is used.
Start Your Ownership With the Right Protections in Place.
New practice owners are among the most vulnerable to embezzlement—precisely because they're still building trust with staff. Prosperident's First Look review establishes your financial baseline from day one.
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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