20 Signs Your Employees Are Stealing from You

20 Signs Your Employees Are Stealing from YouEditorial
by Bryan Truitt and Jim Du Molin

When Blind Faith in Humanity Doesn’t Cut It!

Last week I told you how there’s a 3 in 4 chance your practice will be embezzled at some point. If you’re not able to avoid theft, the best thing is to catch it quickly.

However, you’re unlikely to discover embezzlement unless you’re checking for it. Blind faith in humanity is not a good business practice!

Are you being embezzled?

Here are the first 10 of the top 20 signs that might indicate the answer is yes.

  1. Unusual Behavior
    The perpetrator will often display unusual behavior that when taken as a whole is a strong indicator of fraud. The fraudster may never take a vacation or call in sick for fear of being caught. He or she may not assign out work even when overloaded. The employee may become very defensive, unusually irritable and suspicious.
  2. Complaints
    Frequently, tips or complaints will be received which indicate that a fraudulent action is going on. Complaints have been known to be some of the best sources of fraud and should be taken seriously. Although all too often the motives of the complainant may be suspect, the allegations usually have merit that warrant further investigation.
  3. Stale Items in Reconciliations
    This is a big indicator in dental practices! In bank reconciliations, deposits or checks not included in the reconciliation could be indicative of theft. Missing deposits could mean the perpetrator absconded with the funds; missing checks could indicate one made out to a bogus payee. Bounced checks could indicate that funds are being siphoned out of your bank account.
  4. Excessive Voids
    Voided patient receipts could mean that the patient paid, the payment diverted to the use of the perpetrator, and the internal copies of the receipt subsequently voided to cover the theft.
  5. Missing Documents
    Documents that cannot be located can be a red flag of fraud. Although it is expected that some documents will be misplaced, your CPA should look for explanations as to why the documents are missing, and what steps were taken to locate the requested items. All too often, the auditors will select an alternate item or allow the auditee to select an alternate without determining whether or not a problem exists.
  6. Excessive Credit Memos
    Similar to excessive voids, this technique can be used to cover the theft of cash. A credit memo to a phony customer is written out, and the cash is taken to make total cash balance.
  7. Common Names and Addresses for Refunds
    Insurance refunds are received in error and the perpetrator will make the refund out to a bogus name and the address shown for the refund is then made to the employee’s address, post office box the perpetrator maintains, or to the address of a friend, relative or co-worker.
  8. Increasing Reconciling Items
    Stolen deposits, or bogus checks written, are frequently not removed, or covered from the reconciliation. Hence, over a period of time, the reconciling items tend to increase.
  9. General Ledger Out-of-Balance
    When funds, inventory, or assets are stolen and not covered by a fictitious entry, the general ledger will be out of balance. An accounting of the inventory or cash is needed to confirm the existence of the missing assets.
  10. Adjustment to Receivables or Payables
    In cases where patient payments are misappropriated, adjustments to receivables can be made to cover the shortages. Where payables are adjusted, the perpetrator can use a phony billing scheme to convert cash to his or her own use.

Read the next 10 warning signs or learn how common dental embezzlement is. Your homework assignment is to re-read the above list and check to see if you have any possible problems in these areas. If you do find a problem, DO NOT confront the suspect! We’ll give you more on how to proceed later in this series.

About Jim Du Molin

+Jim Du Molin is a leading Internet marketing expert for dentists in North America. He has helped hundreds of doctors make more money in their practices using his proven Internet marketing techniques.


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