Introduction
One of the highest risks a small business faces is being the target of fraud or embezzlement. Over one-third of all dental practices have experienced fraud at least once, distressingly only few dentists are properly trained or equipped to prevent it. In a small business, fraud comes in a variety of ways.
These range from prehiring screening techniques to using secure accounting software and even retaining a private investigator. An embezzler maybe found within the dentist’s clinic, or a supplier, or even a corporate; proper steps should to be taken in order to ensure that precautions are taken to vet partners, direct partners, indirect partners, suppliers, etc and the option of legal recourse considered if necessary. Large number of dentists have been or are victims of embezzlement, there are ways to ensure checks and balances are in place it does not happen to you.
Educational Outcome
The clinician will be able to do the following, upon completion of this article:
- Understanding 'fraud' is as the first step to preventing and combating its occurrence in the dental office.
- Prevention methods, beginning with establishing a high standard of in office ethics, proving yourself a key example and checking your staff’s records at each initial hiring.
- Minimise your risk of fraud by restricting editing power to the employer, monitoring time cards, reconciling your cheque register monthly to your bank statement and keeping in touch with your patients.
What Is Fraud?
The ADA manual brief titled “Protecting Your Dental Office from Fraud & Embezzlement” defines embezzlement as “the intentional and fraudulent taking of another person’s property by one who has been entrusted with the property for his/her or another’s own use.”
1. Start at the Top
The first place to start is with your own actions. Set the standard of complete honesty by being honest with your patients, your staff and the government. If you are not honest, you cannot expect your staff to be either. Let them know that the standard is real and prized.
2. Check Employees
The same ADA manual recommends a background check on any final candidate for a position in your office. A duly authorised background check could include a credit check and verification of personal references, education and former employment. A good exercise would be to compare the resume with the employment history listed on a credit check. Any omissions or discrepancies should be investigated. Ensure you obtain permission to contact the prospective employee’s references and former employers. When you talk to them, listen to what the references say as much as you listen to what they don’t say. Background checks can also be performed by private detectives. You might have one as a patient in your practice or someone who refers to himself as an insurance fraud investigator or you can ask your insurance carrier to help you find someone who’s qualified to perform these checks.
The credit check could alert you to potential problems with money handling and finances. You will also need to insure against employee dishonesty. The liability insurance policy should cover money and securities as handled in the dental practice and a bond related to any retirement plans.
Unfortunately, performing your perceived due diligence when hiring an employee does not mean that you are finished minimising your risk. Think about your various financial and management responsibilities and don’t delegate all of them to a single employee. You and possibly your spouse/partner/business partner need to be actively involved in the financial end of the business. This includes payroll, bank reconciliation and paying bills. You can easily minimise the risk of fraudulent checks by handling the cheque book yourself or in the current world electronic payments. Paying your own bills enables the dentist or your partner know the financial end of the practice more intimately.
3. Stay in Touch with Patients
Another way to minimise your risk is to listen to your patients. If you have been receiving similar complaints from multiple patients, you need to investigate. It is also critical to be aware of what is going on in the office and in the lives of office staff. Does the employee always carry around a notebook or paper (possibly recording the lapping activities)? Are there lifestyle changes, such as new cars, home remodeling projects or extravagant vacations? None of these actions is necessarily proof of guilt, but if they’re inconsistent with the income level of an employee, it might be suspicious.
4. Act Today
Commit now to take concrete steps right away. Install biometric time cards, manual time cards are open to numerous types of fraud. Practice management software systems should have a time clock as one of their basic functions. For dental practices, an automated time clock is a gift. Not only does the system minimise risks of overstating hours worked, but it also reduces mathematical errors that occur in compiling time or switching between minutes and decimals. First and foremost, ensure that editing power is restricted to the employer; it is not appropriate for anyone outside of the employer to have editing power.
It is also important to monitor time cards to make sure that the earliest employee isn’t clocking in for everyone else. Review the time sheet before processing payroll to make sure it is reasonable. Regularly looking it over can confirm that employees are only clocking in on days that they truly worked.
5. Use Your Reports
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