Tuesday, August 20, 2013

5 Tips to Prevent, Detect and Deter Fraud in your Dental Practice

Run your practice like you did when you first owned it.  Do you remember when you first purchased your practice and cash was tight?  You had a huge loan payment, payroll to worry about, equipment to purchase, and a waiting room that needed some final touches.  You not only knew your daily production, you knew how much you were supposed to collect and when you were supposed to collect it.  You had your finger on the pulse of your practice and your staff knew it.  Don’t relax too much as your practice grows; stay on top of the business side of your practice. 

Engage a Dental CPA to do more than just prepare your tax return.  Your CPA should be engaged to closely review your financial information at least twice a year.  A detailed analysis of your financials including percentage and ratio comparisons may reveal production, adjustments, collections or expense relationships that just don’t make sense and may indicate possible fraud.   In addition, Dental CPA’s can compare your practice results with industry benchmarks and can help investigate areas that are out of line with industry norms.   If you’re only consulting with your CPA at tax time you should consider upgrading your services.

Pay Close Attention to the behavior of your front desk staff.   The greatest opportunity for embezzlement in your practice is by your front desk staff.  There are countless schemes that can be perpetrated by these trusted employees.  If your front desk person is extremely territorial so much that they avoid taking vacations, become upset when someone attempts to use their computer or hostile with outside consultants hired to improve practice results – you may have a fraud concern.   In addition, if your front desk person seems to be living beyond their means; you should take notice.  There may be a perfectly reasonable explanation for why your front desk person is driving the latest model BMW, is wearing the latest designer fashions straight off of a New York runway and carrying the latest designer handbags.  They could simply be gifts.  You just need to make sure they’re not gifts from you.

Have a Strong “Tone at the Top”.   As the practice owner you are setting the ethical climate of your company.  Include an ethics statement in your employee handbook as well as written fraud policies and procedures.  Discuss fraud concerns openly with your staff in a non-accusatory manner and inform them that fraud will not be tolerated in your practice.  Let employees know that if they embezzle, you will catch it.

Implement Bonus & Incentive Programs   Employees that feel valued and fairly compensated are less likely to find other ways to increase their earnings.  Set achievable goals for staff and reward outstanding performances with periodic bonuses or gift cards from a favorite store or restaurant. Not only will these programs increase staff productivity, they’ll also increase staff morale.

If you’d like to further discuss any fraud concerns within your practice or are interested in engaging a Dental CPA for ongoing accounting or tax services, please contact me, Kim Conlin, CPA, FCPA at kconlin@nlgroup.com.

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