The word “embezzlement” usually conjures images of shady bigshots high up the corporate ladder, but the truth is, it’s a lot more common than you might think.
What’s worse: it often happens within dental practices. And the numbers are alarmingly high.
It’s thought that three out of every five dentists – or 60% – will be embezzled at some point over the course of their careers. However, some experts estimate that the number might actually be closer to 80% due to undetected or unreported cases. It should also be noted that while stealing money is the most common form of embezzlement, it can manifest itself in other ways – such as employees ordering extra medical items or equipment in order to sell themselves.
According to leading dental embezzlement investigation firm Prosperident, the crime often goes undiscovered for nearly two years, and the average amount stolen is $109,000. This is why it’s so important to take stock of all the moving parts and employees that make up your practice. It’s easy to think that this is a crime that only happens to other practices, or that it’s a big-city crime that could never happen in your rural office. It’s also easy to fall victim to “illusory superiority,” which Prosperident describes as “a basic human characteristic where we overestimate our capabilities relative to those of others.” That is to say, it’s easy to assume we have the knowledge and perception to catch the crime before it happens. This is a mistake.
While these facts and figures can be alarming, there are steps you can take to both prevent embezzlement and red flags to look for in the unfortunate event that it’s happening to you.
Screen Every New Employee
It may go without saying, but even if you are hiring a close friend or family member who you’ve known all your life, it could be a costly mistake not to do your due diligence. In addition to criminal and credit checks, you would be wise to confirm their stated education history to ensure they were honest in their application process and talk to past employers to make sure they haven’t had any prior issues.
Avoid Single-Person Control
Do not let one single person control the finances of your practice. Instead, delegate different tasks to different employees so that each function gets performed but no one person has the opportunity to manipulate or reroute any resources. You can also provide opportunities for employees to review each other’s work,
Stay Aware of Abnormalities
Keep your eyes peeled for an increase in patient refunds, adjustments or debt write-offs, or for an above-average number of accounts being transferred to a collection agency. Also make sure there are no inconsistencies between accounts receivable records and patient statements. It’s always smart to print out your own computer reports so you get the full picture straight from the source. Also review and initial day-end reports.
Keeping up practices such as these and staying aware of your practice’s financial goings-on can help you thwart embezzlement. Stay tuned to our blog to keep up with the latest industry pointers and insights.