Message Boards
Today's Active Topics Today's Active Cases Browse Forum Categories My Recent Activity My Messages Private Groups My Marked Threads My Subscriptions
Today's Active Images Today's Active Polls Most Active Topics Global Townie Map Advanced Message Board Search Message Board Terms of Use

Howard Speaks Howard Farran, DDS, MBA, MAGD

More by this author (315)
Is Your Practice Protected Against Embezzlement?

Howard Farran, DDS
MBA, MAGD
Publisher,
Dentaltown Magazine
 "I should have paid more attention to my own books."

"She was my office manager for 15 years. I trusted her."

"I should have made my own deposits."

"I can’t believe this happened to me."

"Stealing from dentists is getting to be a sport."

These distressing quotes are a miniscule representation of the countless stories I have heard from dentists over the years of employees who embezzled money from their practices. Most recently, a dentist approached me with a story about how his front-office employee embezzled money from him and his partner before she was caught. This front-office employee would deposit bulk insurance payments into her own accounts located at several different banks. She had a stamp made with her name on it to enable her to add her name to the check. The banks where the deposits were made took the checks with no problem. The insurance payments were being posted to the patients’ accounts in the practice management software so patients were not receiving statements and the outstanding insurance report was not reflecting a problem. She was only going to the bank once or twice each week, so there was not a daily deposit slip to match up to a day sheet. The doctors did not request any paperwork from her on a daily basis, so there were no checks and balances in place for collections. This gal was only caught when the second doctor started questioning his low deposits. During the investigation, the deposits from the first doctor showed up and he was notified. Up to that point, he was unaware that any money had been stolen from him. By then, this front office employee had left his office for reasons other than embezzlement. She currently has felony charges filed against her and the exact amount stolen from both doctors is still under investigation.
"There is no foolproof system for protecting against embezzlement,
but removing the opportunities will dramatically reduce
your chances of it happening to you."		 Scary, isn’t it? If I had a quarter for every time I’ve heard an embezzlement story similar to this one, I wouldn’t have to practice anymore!

Embezzlement can happen anywhere; major companies like Aramark and Patterson-UTI Energy, Inc. (in 2005), and even educational institutions like University of California-San Francisco (in 1999), have experienced firsthand the effects of this harmful crime. Unfortunately, and most commonly with small businesses, steps to stay protected from embezzlement aren’t usually taken until after the crime has been committed.

Is your practice protected? Do you have systems or internal controls in place to prevent this? Do you and your employees have checks and balances in place to prevent any opportunities for embezzlement?

Having internal controls in your practice is a step in the right direction; this is a process that will take place each month to make sure the risks are properly managed. The first step is to meet with your staff and involve them in the entire process. Go over the daily and monthly cash and accounting practices that take place in your front office, and then put written policies and procedures in place that outline each person’s responsibilities going forward. I would recommend using your own accounting firm or employ ProVision, the firm Today’s Dental used, to assist you in this process. It is very helpful to have someone who is experienced in auditing and internal controls to access a situation and make recommendations that can then easily be implemented by you and your office manager.

The second step is to make sure the same person is not doing all the same tasks in your practice. The person who sorts through the mail, opens payments from patients and posts them in your practice management system, or the person who checks patients out and posts payments to their accounts should not be the same person who performs your daily deposit. You should have separate cash handling duties in place and someone to verify cash receipts collected in order to have internal controls in your practice. Once the daily deposit is made, someone else (the office manager, a front-desk person or even you, the dentist) needs to verify the daily deposit with the day sheet printed from your practice management software. Having this review step in place each day is critical to the internal control process.

Then finally, on a monthly basis, you need to reconcile your total deposits for the month from your accounting software with your total collections report that is generated from your practice management software.

ProVision (www.provisionwealth.com, 866-467-5809), the accounting firm I have used for almost 10 years to process our yearly tax return worked with us at Today’s Dental to put an internal control system into place in our practice. Let me tell you what great peace of mind this gives not only the dentist but also your staff when they realize you care enough to put systems in place that will hopefully prevent opportunities for embezzlement in the future. There is no foolproof system for protecting against embezzlement, but removing the opportunities will dramatically reduce your chances of it happening to you.

For more detailed information on this process we offer a free Online CE Course on Dentaltown.com, titled "Internal Control for Dentists" by Tom Wheelwright and Ann Mathis of ProVision. After seeing the results of Tom and Ann’s internal control system in our own office I asked them to put together a CE course so that other dentists could benefit from this very important business system. You can find the CE Course online by entering "Internal Control" into the Key Word Search when inside our Online CE section. I encourage you to watch this free CE course and consider implementing this process into your practice; like I mentioned before, it offers great peace of mind for you and your staff.
Dentaltown Magazine
September 2025
Dentaltown Magazine September 2025 Read Current Issue Read Archived Issues
Sponsors
Townie Perks
Townie® Poll
Who or what do you turn to for most financial advice regarding your practice?
  
Site Menu
Message Boards Magazine Continuing Education Podcasts Blogs Classifieds Dental News Events Townie® Poll Ebooks Townie Choice Awards
Company Info
Contact Us Advertise With Us Howard Farran DDS, MBA Policies and Agreements
Site Help
Sally Gross, Member Services Specialist
Phone: +1-480-445-9710
Email: sally@farranmedia.com
©2025 Dentaltown, a division of Farran Media • All Rights Reserved
9633 S. 48th Street Suite 200 • Phoenix, AZ 85044 • Phone:+1-480-598-0001 • Fax:+1-480-598-3450