Pennwell web 220 354

The embezzlement nightmare

Oct. 1, 2011
“I hate calls like that,” I thought as I hung up the phone. My heart ached for the caller. Another dentist discovered his long-time trusted employee ...
By Susan Gunn

“I hate calls like that,” I thought as I hung up the phone. My heart ached for the caller. Another dentist discovered his long-time trusted employee had been stealing his hard-earned money from the practice. It had been my fifth such call that week alone.

He alternated from being angry about the theft to heartache for the loss of a relationship. He said, “She’s worked for me for 18 years. How could she do something like this? I trusted her. She offered to repay me and gave me all sorts of excuses. What do I do now?”

Practice embezzlement is increasing significantly. The reason is always the same — greed. We want more and we want it now. We don’t want to wait. We put everything on credit. This desire can grow and overshadow our ethics and trust. We need to keep up our image — name brand clothing, new car, up-to-date house.

The loss of money is not the only loss felt when someone embezzles. The greater loss is not material. Money can be replaced. Experiencing a theft by someone you’ve hugged for a number of years, shared meals with, been there when they got married and when their kids were born, through the loss of parents, through sickness and health — it brings on full-blown grief. It’s emotionally heart wrenching and gut wrenching.

It will nauseate you and make you physically ill. Some doctors have become sick and some have quit the profession because they were so grief stricken.

The betrayal of trust is overwhelming. It consumes your thoughts and your time and zaps your energy and motivation. It’s hard for you to focus and get back to dentistry. It sucks the joy of being a dentist right out of your heart.

I know because I walk through this with my clients, every step. It literally breaks my heart, right up to the point of extreme anger. Just a few things done differently would have prevented the embezzlement, or at the least made it not quite so easy.

Here are three simple things to implement in your practice:

▼ Be the boss and be alert
▼ Cross-train staff members
▼ Implement or tighten internal controls

Be the boss and be alert

Having a trusted employee steal from the practice serves as the ultimate wake-up call. The message is “WAKE UP!” It’s time to become involved in the business aspect of your practice. These are not business‐as‐usual times, so you cannot do the business of dentistry the same way you always have and expect positive results. Everyone’s economy has been affected. It’s not too late, if you have let the “ownership” of the practice slip away, to seize it back.

This mantra is heard in every professional practice (dental, veterinary, medical, or chiropractic) — “Do what you went to school for and delegate the rest.” Sounds great but it is a business myth — at least for a successful business. Do you believe Warren Buffett, Donald Trump, and Bill Gates don’t understand financial statements and oversee their businesses?

They all understand that they must LEAD the business. If you are not leading the business of your practice, you are simply an employee; you are not a leader. If the practice is connected to the dentist’s name, that makes you the boss, right? Bosses oversee the business and the employees. They make business decisions for the success of the business, using business reports.

You must not only run the reports, but also understand the reports. If you do not understand them, then change their format so you do understand them. For instance, is it more important to have accounting numbers or words that you understand on your financial statements? Do you compare the day sheets to the patient sign-in sheets? Do you study the bank statements and compare the collections report to them? Do you analyze the credit card charges on the credit card statement? Do you do the bank reconciliations?

Are you the most knowledgeable person regarding the practice software? Who controls the passwords, or do you have passwords? Is the security for the practice software up to its full potential? What about new hires? Are you the one who calls references, doctor to doctor? Do you do background checks on anyone handling finances? Have you checked your insurance for employee dishonesty coverage?

When I was speaking at a convention on embezzlement, one of the attendees quietly and honestly said, “Susan, I understand why you want me to do this, but I just don’t want to do it.”

That’s why we had all those lessons growing up when our parents said, “Because I said so.” Hopefully we were trained to do things we don’t necessarily want to do but have to do anyway. As business owners, we all have to do things we do not want to do. It is “owning” a business, and the reality is, if you are not the boss of your practice, someone else will be.

Cross-train staff members

The common signs of an embezzler are domineering and controlling personality, works early/late/weekends, never takes sick time or vacation, never lets anyone else do his or her job, tends to isolate from the staff, is critical and stirs up dissension, shops often for nice clothes, jewelry, and cars, and lives beyond family income.

However, realize that not all controlling personalities are embezzlers. Maybe they are simply OCD about their job position, making them extremely efficient! But … who gets the mail? Who opens the mail? Who enters insurance checks into the practice software? Who writes up the deposits? Who takes the deposits to the bank? Who reconciles the bank statement?

Hopefully, by writing those questions in that order, you will see the danger in just one person doing those jobs. In all of the embezzlement cases I’ve investigated or heard about, one person did all those jobs. A remedy to this is to cross-train. Then a single person is not solely trained for one job.

This is efficient if anyone is sick or on vacation or stealing from your practice. But beware — someone will complain about someone else doing their job. “They will never do it as well or be as efficient as I have been.” Take a deep breath and remember you are the boss. That’s why training exists.

Implement or tighten internal controls

Take a look at the various aspects of your practice. What happens that you don’t know about? Stand in a corner and quietly observe. Is there accountability for your petty cash? Is cash signed for when taken out of the box? Is the change returned with the receipt to the box? Are the hours the employees work tracked by software or is it handwritten? Are they clocking out for lunch?

What are the policies regarding personal cell phone or Internet use? Do your employees consider their desk their own personal space?

By the way, if you are using the cell phone and Internet for personal use in the practice, then regulating your staff can be extremely difficult. The doctor, the practice owner, sets the precedence, the standard, in a practice. People mirror behavior, so you, the doctor, must model the behavior you expect from your employees.

When was the last time your personnel manual was updated and signed by each employee? Is it complete? Will it hold up in court should your employee sue you? What about patient checkout? What happens when a patient pays in cash? Do all patients get a receipt? Do the patients fill in the payee on their checks or leave it blank?

Just do it

That’s a lot of information to process, but start by just doing it. If you suspect someone in your practice of embezzlement, call me and we’ll talk. This past year I spoke to practice management consultants and practice management groups to train them on what to look for when they’re in your practice.

Practice consultants are your second set of eyes and ears. They see things you may not see. Listen to their concerns and implement their controls.

If someone really wants to steal from you, they will. But don’t make it easy for them. Do not enable their theft with your ignorance. Take courses. Learn your software. Cross-train your employees. Implement controls. It is not a time for business as usual. Be the boss.

Susan Gunn is a certified fraud examiner with complete understanding of your practice. A popular speaker, she is able to investigate, interview, and provide reports ready for prosecution and civil suits. For more information, go to

For more on this topic, go to and search using the following key words: embezzlement, internal controls, Susan Gunn, cross-train, be the boss and be alert.

More DE Articles
Past DE Issues

Sponsored Recommendations

Clinical Study: OraCare Reduced Probing Depths 4450% Better than Brushing Alone

Good oral hygiene is essential to preserving gum health. In this study the improvements seen were statistically superior at reducing pocket depth than brushing alone (control ...

Clincial Study: OraCare Proven to Improve Gingival Health by 604% in just a 6 Week Period

A new clinical study reveals how OraCare showed improvement in the whole mouth as bleeding, plaque reduction, interproximal sites, and probing depths were all evaluated. All areas...

Chlorine Dioxide Efficacy Against Pathogens and How it Compares to Chlorhexidine

Explore our library of studies to learn about the historical application of chlorine dioxide, efficacy against pathogens, how it compares to chlorhexidine and more.

Whitepaper: The Blueprint for Practice Growth

With just a few changes, you can significantly boost revenue and grow your practice. In this white paper, Dr. Katz covers: Establishing consistent diagnosis protocols, Addressing...