7 ways to avoid embezzlement

1. Diversification of duties
This is the most important internal control in attempting to avoid becoming a victim of embezzlement in your practice. It allows for financial diversification and cross-checking of all work done in the office.

2. General controls
All employees should be required to take a vacation that should consist of at least one week in duration and extend over two consecutive weekends. All payables should be reviewed with original documentation.

3. Cash
All cash receipts should be recorded and patients should be provided with a walk-out statement. Deposits need to be made on a daily basis. Checks need to be endorsed immediately and the check book needs to be balanced on a monthly basis.

4. Accounts receivable
The balance of the accounts receivable should be balanced with the patient ledger. All write-off and adjustments should be authorized by the doctor. The audit trail should be reviewed on a daily basis along with an independent audit of all accounts.

5. Spot checks
Make everyone aware that you are more involved in the daily operation of the business part of your practice by spot checks. Follow through!

6. Credit cards
Review your credit card merchant statement on a monthly basis. Remove all credit refund slips from the practice and discard any signature stamp that may be available.

7. Accountant
Do not depend on them. Accountants only work with what is given. Changes to them can seem normal. Remember, it's your business!

Donald P. Lewis Jr., DDS, CFE is an expert in fraud and embezzlement, a Diplomat of the American Board of Oral and Maxillofacial Surgery and is currently in private practice in Cleveland, Ohio. For more information on Dr. Lewis' seminars or books, please call (216) 261-1010 or email him at DLewis7109@aol.com.