Experts estimate that more than 40 percent of dentists are embezzled with an average loss of $50,000. But, because the embezzlers often steal small amounts of money over many years, the thief is never noticed. The US chamber of commerce estimated that 75 percent of employees steal from their workplace and that most do so repeatedly.
A majority of people, if given an opportunity, will take advantage of a situation to steal from their employer on the following frequency:
-3 percent will steal daily
-7 percent will steal weekly
-20 percent will steal 4-12 times a year
-70 percent will steal 1-2 times a year
-4 in 10 doctors experience theft in some form from the practice. 1 in 4 dental practices experience monetary theft from their practice.
The significant types of theft in dental practices are:
-Goods and services in Kind
All types of theft can hurt the bottom line of the practice. The Monetary thief, in most cases, has the most negative effect on the practice bottom line. Most dentists find it hard to believe that their handpicked, trusted, longer-term staff would steal from the practice.
Here is an unfortunate, and real-life, example. A dentist had a highly successful practice with five employees. One was a long-term office manager who came to work early and left late every day. She managed all the financial transactions daily along with the insurance and statement billing. The office manager took an extended vacation. While she was gone, the office sent out statements and received numerous calls from patients that their statement was incorrect and that either their insurance had paid the bill, or they paid on the day of service by check or credit card. The doctor had the staff investigate all the disputes and found out that the office manager had embezzled more than one hundred thousand dollars over the years. He was devasted and could not believe that the long-term, most trusted employee had done this to him.
Methods that have been used by staff to steal from the practice:
- Zero Charge- Patient comes in for services, and the office staff member posts a zero-balance charge and pockets the money. At the end of the day, the computer collections balance to the deposit slip. No one notices.
- Falsify Deposit Slip– Employee brings the doctor a deposit slip to sign for the day matching all the collections taken in for the day but then takes out all the cash from the deposit bag or envelope and changes the deposit slip when depositing the money.
- Multiple Adjustments to Accounts- Courtesy discounts like cash discounts or senior discounts are used. Employee charges the full amount to the patients and keeps the cash discounts and pockets it.
- Fictitious Vendor- Employee sets up a fake business with an account and has doctor sign supply order checks for supplies. The employee deposits these checks into an account and keeps the money.
Make sure that even your closest friend in the dental practice is being watched. Here are some suggested internal controls to help prevent thief and embezzlement:
- Segregation of Duties– Make sure one person does not control all cash flow processes.
- Daily Audit Trail– Review daily transactions to catch zero balance postings.
- Rotate Duties– This will help to reduce the chance for embezzlement.
- Verify the End-day Report to Deposit Slip– Ensure that you see the end-of-day report and it balances with cash deposits. The doctor should be responsible for depositing funds in the bank.
- Review Bank Statement– Take time to review the statements monthly.
- Require Vacations– All employees must take vacation days that they have earned.
- Performance Plans– If the practice meets specific goals and the practice is increasing its revenue, give incentives to employees in monetary form.
- Background Checks- Make sure you follow through on background checks before hiring new employees.
- Verify References- Check all references.
Having internal controls will help protect the practice and staff that are honest and want to do a good job. It will also help everyone stay focused on their tasks and goals at hand and take away the opportunity for someone to embezzle. You don’t want to have good employees turn into liabilities.
Omni Practice Group has been helping dentists for over 15 years developing plans for dentists to transition their practice. Our goal is to help you find the right buyer and make a smooth transition of your practice when the time is right. Contact us today for a free no-obligation consultation with one of our Practice Transition Advisors.Read More
In my experience, sellers get concerned with the “correct” time to tell their team about the transition. We recommend informing them when all documents or some are signed and there is no doubt the sale will go through. It may be 2 weeks or 2 days before closing, it depends, and your transition advisor will assist you.
If you tell your team too early, they may become stressed, confused, and unsure of their future, so they may panic and find another job and possibly tell patients. None of this is good! Your team and patients are important to the goodwill of your practice.
When you do announce the new buyer, remind the team that they love their teammates and patients and that isn’t changing. Explain a bit about the new dentist and schedule time for them to meet. Help them feel confident that the transition will be great, and the new dentist will need their assistance for everyone to be successful.
A letter to patients is typically sent from the seller with the buyer’s approval. Depending on both the buyer and seller and the unique area, a newspaper ad can be placed, and an open house can be scheduled. Your transition advisor will provide ideas and examples to help you choose the best method for announcing the transition.
Patients may be unsure of the new buyer, so consider not making any abrupt changes, such as incomplete treatment and payment options. You can’t underdiagnose or discourage ideal treatment but be aware of a way to communicate based upon the previous owner to retain as many patients as possible and still bring in your processes and protocols.
The new team will be concerned about the new buyer’s expectations so consider not changing much in the practice for a while, so they have a chance to transition and become comfortable. Provide information they won’t know such as how to schedule and what instruments you need for each procedure. Help everyone to be successful in their position.
Remember to remind your team often that everything is ok. Consider having one-on-one meetings with each new team member and ask specific questions. “What keeps you coming here every day? What’s one thing you would change in the practice if you could? Can I count on you to bring questions and concerns to me rather than involve the entire team?”
Transitions can be stressful. Work with your transition advisor that has many experiences and ideas to share to help everyone be successful.Read More
Want to know how you can determine the selling price of your practice? Do you know why it is smart to hire dental practice brokers?
Watch the eighth episode of the Dental Marketing Podcast with Chris Pistorius, Founder & CEO of Kickstart Dental, and Megan Urban – Dental Broker at Omni Practice Group, to get your answers!
What you receive when you come to the GIG M.BF. Entrepreneurial Mastermind Summit:
The GIG M.B.F. Entrepreneurial Summit is designed as a total support system for Dentists/entrepreneurs with their sights set on “sky’s-the-limit” growth and the freedom to create the kind of richly satisfying life they dreamed of when they made the decision to become a dentist.
With all the changes in dentistry and transitions with our world and life, this summit will be a way to re-energize, renew and rediscover new ways to keep our practices growing and thriving.
The GIG M.B.F. Entrepreneurial Summit is about you and your growth. You decide on your most important goals and on your game plan. We provide the structure, tools, and support that give you a new perspective on your business and a fresh way of thinking – and keep you on track to turn your new goals into reality, and to keep us moving forward.
Here’s how that happens:
1. GIG team founders, speakers, and Mastery Leadership Directors will facilitate and provide the structure for each Entrepreneurial Mastermind Summit. Much of the learning and success will come from being and interacting with like-minded dentists who encourage, challenge, and support each other.
2. At the GIG Summit, you’ll have plenty of time to focus on and strategize what’s most pressing in your business right now – and get objective feedback from the GIG team and the other successful dentists in the room. Fresh perspectives and breakthrough insights are inevitable, making it a mind-stretching, life-changing two-and-a-half-days.
3. At the end of the two-and-a-half-day Mastermind Summit, you’ll leave armed with new thinking and tools PLUS a plan with prioritized, concrete action steps for the next 6 to 12 months to share with your team. New ideas are energizing, but it’s the clarity about the action steps needed that get things done.
4. GIG Summit will provide entrepreneurial tools, support material, etc. which will accelerate learning of the different “modules.” Each dentist will end up individualizing their learning.
Why GIG Summit Now?
Growth Into Greatness Institute over the last two decades has supported Dentists through all types of practice transitions. This community of dentists will be actively engaged in new growth, tools, and support to keep reaching higher goals and personal, professional aspirations.
We have intentionally rescheduled this meeting for October 21-23, 2021, because we expect the Coronavirus to have been defeated by then and dentists will want to return to C.E. and professional growth, profitability, and success. A like-minded community of dentists sharing their experiences in this “rebirth” will surely be beneficial to everyone. Enrollment applications and RSVPs are now being accepted. The time is now We all need each other to be strong. Let’s press on together!Read More