The biggest mistakes dentists make: Thinking embezzlement will never happen

June 20, 2016

Embezzlement can happen in any practice. Even yours.

Editor's note: Based on his extensive experience with dentists over the past 30 years, Dr. Roger P. Levin has authored a new book entitled The 31 Biggest Mistakes Dentists Make. His premise is simple. As he says in the introduction, “We can learn from our mistakes. But isn’t it better to learn from other people’s mistakes?”

Following is an excerpt from the book. For more excerpts, click here. 

Mistake #23: Thinking embezzlement will never happen 

Embezzlement can happen in any practice. Even yours.
 
Over the years, I’ve met too many doctors who thought their practices were somehow immune to the crime of embezzlement. At the mere mention of the word, they would say:
 
“It can’t happen here.”
 
“That stuff goes on at other practices.”
 
“I know my people.”
 
Unfortunately, this attitude aids and abets the embezzler, who often manages to work undetected in a practice for years, siphoning off tens of thousands of dollars in the process.

Related reading: An interview with a dental practice embezzler

 
The creativity of people who embezzle is unlimited. I have heard about cash stolen outright, checks forged with the doctor’s signature and dummy accounts set up. One new client even had a staff member stealing supplies and selling them for cash.
 
People who steal come in all shapes and sizes. They have a variety of motivations as well––to pay bills, gamble, buy nice things, purchase drugs, etc. In every case, doctors are shocked when they find out that a trusted team member has been stealing from them.
 
In the last 20 years, we have identified a number of potential embezzlements that come in the form of extreme resistance on the part of a staff member to consulting services. One office manager-who single-handedly managed the practice’s finances––made it clear she would resign if the doctor engaged a consulting firm. We recommended that the doctor have an audit performed by an outside accounting firm. A week later, the firm discovered $145,000 was missing. The doctor fired the office manager and contacted the police. Obviously, she was attempting to keep out anyone who could identify what she had been doing.

Related reading: The biggest mistakes dentists make: Not working with a professional money manager

 
Practices need to have a series of financial checks and balances in place, including scheduled and unscheduled reviews by an outside accounting firm. In addition, practice finances should never be the province of just one employee. Such a situation makes it easier for embezzlement to occur.
 
Free whitepaper: Tired of waiting for things to get better? Find out how a Practice Analysis can give you the answers you need to make the changes you want. Download Dr. Levin’s free whitepaper “How to Increase the Income from Your Practice” by clicking here.