This blog will be the first in the series concerning practice embezzlement and how you can use dental software to prevent it. While many dentists would like to think that this is a topic that will never affect them, nothing could be further from the truth. It is been estimated that 80% of all practices have been or will be victims of embezzlement. Embezzlement amounts have ranged from $50 to over $1 million. Duration of embezzlement has ranged from days to over 10 years. The average detected embezzlement is approximately $100,000. If the doctor is not diligent, embezzlement is easy with very low risk of punishment. In fact, one study showed fewer than 20% of guilty employees were prosecuted.
We will start with the easiest and most common way an employee can embezzle from a practice. If a patient visit is not recorded, the payment can be handled by the employee in any manner they choose. If there is a cash payment, the employee will simply pocket the cash. If there is a check payment, the employee can set aside the check. This check can be used later when another recorded appointment pays with cash for an amount comparable to the check. The employee can pocket the cash from the latter appointment and substitute the check from the previous appointment to make a deposit balance.
How can the doctor detect this type of activity? Some dental software offer features that help detect this. In the ACE program, whenever you run the daily reports such as production, collection or day sheet, a button appears on the screen to allow you to check for missing appointments.
This will create a report comparing every patient that was checked out during the day with every patient on the appointment book. If anyone was appointed on that day and does not appear checked out, that patient will appear on that report.
This is a quick and easy check that should be performed every day. It could mean the patient canceled their appointment, it could be the patient slipped out the door without checkout, or it could be something more sinister.
If an employee wants to avoid detection with this report, they may simply delete the appointment.
There is a simple way to detect this. Under the appointment book menu, simply select appointment list.
At the bottom of this report, select missed appointments. This will provide a list of all deleted appointments. If you click on the column for appointment date, the report will be sorted in appointment date order.
By clicking the second time, the most recent entries will appear at the top. In just a few seconds, we can tell if anyone who was treated that day has a deleted appointment.
This is only one of many ways an employee can embezzle from a practice. In future blogs, we will explore other ways.