By: Howard Farran, DDS, MBA, MAGD
Publisher, Dentaltown Magazine

In a recent post on Dentaltown.com, practice management extraordinaire Linda Miles said, “It is estimated 40% of all dentists have been, are being, or will be embezzled….” Every dental practice should have safeguards in place to prevent theft. Here is a list of systems we use at our Today’s Dental family practice in Phoenix, Ariz. for embezzlement prevention:

• Have different staff members do the following duties: open the mail, stamp the incoming patient checks “for deposit only” before they are posted, post payments into the patient accounts, and make the daily deposits.
• Send bank statements to the owner’s home address where the owner reviews the cancelled checks for proper signatures.
• Each staff member should have separate computer log in accounts.
• Print and balance daysheets the following day versus that evening after closing.
• Perform the daily audit checking for adjustments to accounts and other errors from the previous day.

Our General Manager, Lorie Xelowski, audits the previous day’s schedule to track over-the-counter (OTC) collections, to catch scheduling mistakes, absence of clinical notes, insurance not submitted, to verify write-offs, etc. Whether you have your office manager, spouse, or you the dentist as the auditor; make these steps part of your daily routine. You will know what is happening in your practice, and be able to correct or obtain further training for those who need it as well as prevent embezzlement.

Below is the step-by-step process of the daily audit report we use at Today’s Dental.

1. Take the paper schedule from the prior day and look up each patient’s account. Double check that things were posted correctly in their account and see if any write-offs were made. Next, record the amount collected on the patient’s scheduled time. If for some reason the right amount was not collected, you also make a note of the uncollected amount.
2. Next, count up all doctor chair time used and all hygiene chair time used. Record the total on the daily audit report in the appropriate boxes on line one.
3. To figure the treatment-room hours percentage in row two, divide the number of hours recorded in row one by the number of operatory chair hours available for that day. Doctor and hygiene chair time should be separated.
4. Add up all cancelled patients on the schedule (if you want to track this) and enter in row three.
5. Add up or run a report for total of new patients seen (if you want to track this) and enter in row four.
6. Next, figure your collection percentage for the day. This percentage should be 100%. Add up all OTC collections (co-pays, patient portion, and finance company approvals) that should have been collected for the day. Enter this number on line one of Table 2.
7. Then, subtract any amounts that should have been collected but were not, and any finance company approvals from the total on line one. This amount is entered on line two.
8. The last line you figure your collection percent for the day by adding up lines two and three and dividing by line one. Again this percentage should be 100%.

This should take less than an hour (typically a half hour for an eight-operatory office). If you have further questions regarding this audit process, you can e-mail my general manager at lxelowski@todaysdental.com, she will be happy help you.

Today we talked about having checks and balances to help prevent embezzlement. Every business can be ran on your five fingers: 1) have a vision, 2) find the people, 3) make something, 4) sell something, and 5) watch the numbers. The important numbers are one and two: you must have a vision and you must also have the right team members on board. Find staff members who have the right attitude and give 100% each day, give them clearly defined job descriptions, proper training, and pay them a deserving wage––then, you will be on your way to having a successful headache-free practice!