Here’s the problem. When you have HUMANS looking over your finances, you have to deal with a variety of HUMAN problems. Dishonesty, error, competition, jealousy, manipulation, etc. It is easy to forget that someone who works for you is, after all, only human… As great as they seem, they shouldn’t be given full control of your finances.
I’ve seen too many doctors fall into the trap of trusting one special employee with all of the Practice finances… just to find out one year later that they had embezzled large amounts of money.
In fact, according to the American Dental Association, the probability of a dentist being a fraud victim in his or her career is between 50 and 60 percent… That’s OVER HALF of you!
A few years ago I watched Dr. Cohen, one of our members practicing in Georgia, make this EXACT mistake. His business manager was given a position of complete power and trust, and set up multiple credit card bank accounts in the Practice’s name. This employee then began to pay for his own personal expenses with the Practice money, and Dr. Cohen had absolutely no idea. He was completely blinded by trust.
That’s why you need to bite the bullet. Make an investment in a financial consultant you can trust.
For years, I’ve worked hand-in-hand with Don Barden of DDS to perfect and expand the financial services available to Scheduling Institute clients like you. DDS Financial is a full service financial planning and investment firm that specializes in working with dentists, and knows exactly the kind of traps and pitfalls you are up against. During your Two-Day On-Site Analysis, DDS experts will take a look at your Practice finances, and help you to set up internal systems that will safeguard you against HUMAN problems, like error and dishonesty.
Below I’ve summed up the three basic principles for keeping your finances in check and preventing embezzlement.
- Never fully trust someone else with your checkbook.
It isn’t just because there are some untrustworthy people out there… There are also good people who just make mistakes. Oversight is necessary no matter what. I’ve caught payroll errors that were made by an employee I trust and weren’t made on purpose, but if I hadn’t been checking my books, I wouldn’t have caught the error.
- Make sure that financial duties are segregated.
I can’t stress enough the importance of having multiple employees in charge of different finance related functions in your Practice. Collections and billing should be handled by at least two different employees.
- Conduct random spot checks.
The best way to keep people honest is to let them know you’ll be checking in on them when they LEAST expect it. This is actually true of all areas of your Practice. Randomly check patient ledgers, collections, accounts payable, and accounts receivable to ensure that your finances are not being tampered with.
Organizing your internal systems to include managerial checks is necessary in order to differentiate between an honest mistake and a repeated crime. This not only keeps YOU and your finances safe, but also keeps your honest employees safe.
Because of this, the ONLY employees who will have a problem with this new internal system are the dishonest ones. They will fight you on the topic, accusing you of being cynical or distrusting. This is a RED FLAG. You need to reconsider trusting this individual with any part of managing your Practice finances.
I know it isn’t a fun topic, but the instances of embezzlement and misappropriation in doctors’ offices are INCREASING every single year. Dentists especially are so caught up in perfecting their craft that sometimes, when it comes to business finances, they prefer to bury their heads in the sand.
Learn from the mistakes of others, and take the LESSON into the future.
Until next time,