Discovering an employee embezzling funds from your dental practice can be frustrating and heartbreaking. Dental practice embezzlement impacts 49% of the dentists polled in a 2019 American Dental Association survey. Unfortunately, there is no rhyme or reason for the cause, but a situation that you and your dental team may encounter. Our dental practice coaches at Bryant Consultants share more information about how an insider can position themselves to embezzle company money. Also, we share five tips to reduce embezzlement in your practice so that you can protect your financial future.
3 Dental Practice Embezzlement Risks
Most private practice dental offices uncover embezzlement committed by someone employed by the practice. In most cases, the team member began working a few months ago and established trust with the dentist and the team. Our dental office coaches share the three most common areas where dental practices are vulnerable to embezzlement.
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Only having one person handling all the billing
Most dental practice embezzlement occurs from team members working in the billing department. In most cases, the person can move money around easily because no one is reviewing their work. Also, a person who becomes territorial about their position when their sole responsibility is billing can be a telltale sign that something is wrong. Money flows four ways through a dental practice: it’s received, recorded, deposited, and reconciled. No single person should perform two or more duties, and they should not be consecutive.
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Using unsecured payment methods from insurance companies
Virtual credit cards are an unsecured payment method that allows insurance companies to electronically transfer money with a temporary credit card number used only once. Insurance companies offer the virtual credit card option instead of paper checks due to the convenience and overhead savings. Unfortunately, card funds can be stolen, so opt out of virtual credit card plans. Instead, deposit money straight into your bank account through electronic funds transfers (EFT).
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Bank account access
Granting team members access to bank accounts should be for the sole purpose of balancing the numbers across the accounts, and dental software to ensure everything matches is a necessary part of conducting business. However, no matter how much you trust an employee, it’s inappropriate to allow them access to your bank account funds. Instead, provide them with “view only” access so that they can review account transactions without the ability to transfer money.
5 Ways to Reduce Embezzlement
Now that you understand how an employee can easily access practice funds and quietly embezzle them, our dental practice consultants explain how you can protect your dental practice and yourself.
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Assign billing to more than one person
Choose multiple people to handle your billing process to increase accountability and oversight. By having more than one person managing or monitoring the accounts, embezzlement is less likely to happen.
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Avoid granting access to your bank account funds
Make sure team members only have “view only” access to your bank account information. The setting will allow team members to complete their duties but lowers your risk of unauthorized fund transfers.
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Opt out of insurance company virtual credit card offers
Virtual credit card funds can easily transfer to another bank account, so they are not safe or secure for insurance payments. Instead, set up EFTs so no team member will need to handle the payment.
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Create a whistleblower policy
Many dental practice embezzlement cases get uncovered by a fellow administrative team member. Unfortunately, it can make it challenging for the person to come forward out of guilt or fear. Therefore, create a protective method where a staff member can come forward.
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Hire an outsourced billing company
Outsourced dental billing companies can help you streamline your billing process, collect more money, and receive an objective, third-party perspective about your bottom line. Fortunately, remote billers immediately notice when something is incorrect, which gives you an immediate heads up when something doesn’t add up.
Dental Practice Consultants
You work hard to earn money for your business, and the last thing you want is for someone to betray your trust and embezzle it out from under you. Therefore, our dental office consultants encourage you to create an environment where dishonesty isn’t rewarded, tolerated, or easy to commit. Then, employ some preventative tactics to protect your dental practice. If you need assistance or have questions, feel free to contact us at (877) 768-4799 or schedule a consultation online.
