How Your Dental Practice Can Mitigate the Risk of Embezzlement

1. How Your Dental Practice Can Mitigate the Risk of Embezzlement

2. As with any type of business in any type of industry, running a dental practice requires you to have trust in your clients and your employees or coworkers, as well as the systems that govern your finances. But sadly, there may be occasions when that trust is taken advantage of and violated. Within the dental industry alone, embezzlement is becoming increasingly concerning, and without help from specialist dental accountants in Miami, many practitioners are falling prey to it.

3. With some reports stating that as many as one in six dental practices have been the victims of embezzlement in some form or another, mitigating the risk of fraud within your own dental practice, is incredibly important. In many instances, that fraud comes from the very people dental practitioners trust the most; their own employees. Fortunately, there are plenty of things you can do to mitigate the risk of fraud in your own dental practice, and along with hiring a specialist dental accountant, here are some other signs to look out for, preventative actions you can take, and things you should do if you suspect fraud has taken place, or is about to: What to look out for:

4. Don’t let a lack of awareness ruin the profitability and reputation of your dental practice by looking out for the following red flags: • Too much control – when an employee becomes too protective of your businesses financial affairs, it could indicate that they are committing an act (or several acts) of fraud. • Lifestyle changes that can’t easily be explained – if you spot an employee making sudden changes to their lifestyle such as buying expensive things or taking indulgent, costly vacations, which can’t be correlated with an increase in salary or recent lottery win, for example, they may be taking advantage of their access to your finances.

5. An unwillingness to take leave – an employee who is worried that their fraudulent activities could be discovered, may refuse to take time off, even for sickness or a family emergency. • Adjustments to financial records that can’t be explained – if deposits are often going missing, patient accounts are being adjusted regularly, or discrepancies have arisen between collections and statements from the bank, an employee may be fiddling the books. What can you do to prevent fraud in your dental practice? Here are some simple steps you can take as a dental practitioner, to reduce the chances of embezzlement within your practice:

6. Appoint different financial tasks to different employees – giving one employee alone, control over all financial transactions, is asking for trouble. • Scrutinize daily reports – at the end of each day, take a print-out of all daily reports. While you might not always scrutinize them, your employees will know that you are checking, and be less likely to try and commit fraud. • Personally review bank statements – before giving them to anyone else within your practice, open and look at your bank statements; a small step which could deter fraudulent activity.

7. Put robust internal controls in place – with the help of software permissions, you can give restricted access to financial transactions and prevent anyone from altering them. • Carry out audits randomly – a random financial record review can highlight discrepancies and keep employees on their toes. What can you do if you suspect fraudulent activity is being carried out? Should you notice any of the warning signs listed in this article in your own practice, it’s imperative that you do the following:

8. Discreetly gather evidence – work closely with a dental accountant to ensure you have the right documents ready before taking any other steps. • Don’t immediately fire the employee – you may well want to fire the employee right away, but it’s recommended by fraud investigators to keep them on until the investigation is over. • Seek professional help – while dental bookkeeping and working with a specialist dental accountant can help you identify fraud and put steps in place to stop it from happening in the future, a CFE, or Certified Fraud Examiner will be needed to help you gather the appropriate evidence.

9. Don’t let embezzlement get the better of you and your dental practice; follow the steps above for a safer, stronger financial future.