Dental Marketing and Practice Management

Not All Employees Are Honest and Honorable

Editorial
by Bryan Truitt and Jim Du Molin

Last week, I told you the first 10 signs of embezzlement. Here are 10 more indicators to watch out for!

11. Write-off of Receivables
    Comparing the write-off of receivables by patients or insurance companies may lead to information indicating that the employee has absconded with payments. Only the doctor should have the authority to write off an account.
12. Slow Collections
    Pay close attention to your receivables. If a patient or insurance company that has always paid within guidelines has a balance/claim that is starting to age, you should inquire.
13. Excess Purchases
    Excess purchases can be used to cover fraud in two ways: A. Fictitious payees are used to convert funds and B. Excessive purchases may indicate a possible payoff to the perpetrator.
14. Phantom Vendors
    Perpetrator establishes one or more phantom vendors to pay for goods or services never ordered. The payment goes to an address controlled by the employee.
15. Ghost Employees
    Ghost employee schemes are frequently uncovered when an individual other than the perpetrator distributes the paychecks. Missing or otherwise unaccounted for employees could indicate the existence of a ghost employee scheme.
16. Duplicate Payments
    Duplicate payments are sometimes converted to the use of an employee. The employee may notice the duplicate payment; then he or she may prepare a phony endorsement of the check or turn it into cash at the bank.
17. Large Payments to Individuals
    Excessive large payments to individuals may indicate instances of fraudulent disbursements.
18. Employee Overtime
    Employees being paid for overtime hours not worked by altering time sheets before or after your approval, if required.
19. Inventory and Supplies Shortages
    Normal shrinkage over a period of time can be computed through historical analysis. Excessive shrinkage could explain a host of fraudulent activity, from embezzlement to theft of inventory or phantom inventory.
20. Charge Accounts and Credit Cards
    The perpetrator makes charges for his or her own benefit to charge accounts and credit cards. When the bill comes in, it is paid in the normal course and the merchandise is used by the employee.

Once again re-read the above and check your system. Remember, there’s a 75% chance that your practice will be embezzled during your dental career… chances are it will happen to you!

Read the first 10 warning signs or learn how common dental embezzlement is. Feel free to post your own tips below.

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