Dental Embezzlement: Ways to Protect Yourself

There are a lot of things that plague a business owner. First and foremost is being sure to make a profit so you can afford to pay your staff and yourself. However, theft can really impact business owners. Roughly 35% of dental offices report having been victims of embezzlement at least one time. With this in mind, you may want to know how you can protect your dental office from this scary statistic of dental embezzlement.

Embezzlement affects many businesses, and up to 30% of business failures can be attributed to theft. This is a massive number, and it is no wonder that businesses are concerned with this issue.

What Is Embezzlement?

You’ve likely heard this term before, but you may not know exactly what it is. When an employee misappropriates funds that their employer has entrusted to them, this is embezzlement.

There are several ways that embezzlement can be committed. This can include making fraudulent invoice statements, pocketing cash from the business, or completely falsifying financial records. Embezzlement is no insubstantial crime and may result in severe forms of punishment, including fines and even imprisonment.

Who Is the Most Likely to Embezzle?

One way to protect your business is to have an idea of who might commit this crime. The people most likely to commit this crime are those who are trusted. This is a terrifying prospect, as you want to know that you can trust your employees. But this could be a person who has worked for you for a long time or someone in a position of power where they’re handling a lot of assets.

It’s not hard to understand why it might be someone like this. Someone who is stealing from a company is the least likely to be suspected. They’ll likely be someone that you think is loyal or someone who will remain loyal, no matter what. However, this, unfortunately, sometimes turns out to be the person responsible because they may use your trust against you.

What Are the Best Ways to Protect Yourself?

Several methods come to mind when thinking about how you can protect yourself from embezzlement. There are five important ways that you can protect yourself and your business. These include:

1. Have more than one person in charge of the money. When just one person is responsible for handling all the finances, it’s easier for them to be able to embezzle without notice. This can mean that different people are analyzing the movement of money or that several people are handling the billing.
2. Keep your business account access private. Depending on whether your business accepts cash or checks, it can be difficult to fully revoke access. Instead, you allow view-only access to the business’s accounts. This lets an employee see the information but does not allow them to make any changes to the accounts.
3. No virtual credit cards. Unfortunately, virtual credit cards can be moved into any person’s bank account. While it may seem like they’re a secure way to take payments, unfortunately, virtual credit cards are not.
4. Incentivize disclosure. While this can become a predatory practice, having a comprehensive policy that incentivizes whistleblowers may be beneficial to your practice. Having a system in place that lets a staff member anonymously report a fellow team member can help protect your business.
5. Hire an outside company. If you are very concerned about embezzlement, hiring an outsidecompany to handle your financial affairs can be a load off not only for you but also for your employees. It will take the temptation away from staff to make any decisions that are poor for them and the business.

FAQs

Q: What Is a Dental Misrepresentation?

A: Misrepresentation is misrepresenting performed services, so this could be billing for a more expensive service than one that is actually performed so that insurance, or even the patient, will cover it. While this isn’t necessarily negative for the patient if they have insurance, it is still considered fraudulent.

Q: Is Embezzlement Common?

A: Unfortunately, embezzlement is common in businesses. More than 30% of business failure has been linked to embezzlement, while nearly 35% of dental offices have reported or suspected major theft at least one time. More than 15% of practices suggest that they have experienced embezzlement a second time. This statistic can make businesses more careful about their policies.

Q: How Can Embezzlement Be Prevented?

A: There are a few different ways that someone can do this, but mostly, it comes down to cash flow. Having more than one person in charge of how the money is tracked is incredibly important. Additionally, removing the ability to make any changes to accounts can also be beneficial for businesses trying to protect themselves from embezzlement. Also, hiring an outside company like Vigor Financial to assist you with business services.

Q: What Is Considered Unethical in Dentistry?

A: There are many things that could be considered unethical, but one of the major things is suggesting a service or procedure that is not strictly required by a patient’s condition. This is considered fraud, and not only will the patient be impacted by this, but the business will be impacted too when its fraudulent practices are eventually discovered and exposed.

Embezzlement is scary for any business, but for a dental practice where the dentist in charge is rarely the person doing the bookkeeping, it can be even more terrifying. There are a few things to keep in mind and a few different ways that you can protect your business. By keeping a better handle on your financial situation, you can keep your business safer from embezzlement.

One way to protect your business is to hire someone outside of the business to handle finances. Vigor Financial offers financial services to dental businesses only, ensuring that we know how to handle your accounts in the most efficient way possible. If you’re ready to get your business’s finances under control, contact us today. We offer consultations and can help you understand the depth of the services that you’ll need.