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Bookkeeping Aesthetics, LLC

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Email: BookkeepingAesthetics@gmail.com

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      WHY DO I NEED A BOOKKEEPER IF I HAVE AN ACCOUNTANT?

      January 14, 2017

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      DENTAL OFFICE FRAUD. DO YOU KNOW WHERE YOU ARE MOST VULNERABLE?

      May 22, 2017

       

      Many Fraud Investigators have estimated that 60% of dentists will be victimized by theft sometime while in practice.  Some have even estimated a number as high as 90% experiencing fraud.  With numbers like these, it is no wonder there are so many articles out there written on the subject. Unfortunately, the articles can be lengthy, overwhelming and depressing for the non-business person. On top of that, fraud experts tell us that the average amount embezzled in the dental practice is $100,000, but can be even higher.  

       

      So what can the dentist do?  Become an expert him/herself by studying the available information out there?  Hire a fraud specialist?  Or....., maybe just go about his/her business and hope and pray that their are in the 10-40% that doesn't experience fraud in their career.

       

      There are many steps the dentist can take to help protect his/her office without having to be an expert.  For the purposes of this article, we will start with the most vulnerable area of the dental practice, Accounts Payable (A/P).

       

      With the age of computers and the internet, it is much easier to manipulate information. This makes it very important to implement and monitor internal controls. There are five areas concerning the A/P that we will discuss to prevent or find fraud.

       

      1. Dentists should be familiar with their accounting software.  For the non-business types, this task can sound daunting.  However, this does not mean micromanaging the bookkeeper.  The reason to have a bookkeeper is to free up time in order to concentrate on patient care, growing the practice and having time with the family.  Nevertheless, it is important to have a basic understanding of how the software works and to be able to go into the program at any time with an understanding of what is happening in the business.  A great bookkeeper can help the dentist to accomplish this.

       

      2. Hire an outside Bookkeeper.  A professional bookkeeper will never have access to your funds and can help to implement and monitor internal controls.  They can ensure financial information is reliable and accurate. This would include attention to detail such as making sure there are reference numbers on all bills which would prevent duplication from happening in the software.  A bookkeeper would be able to identify errors and fraud quickly.

       

      3. Verify your Vendors.  The dentist should not only be familiar with who his vendors are, but also the average amount spent with these vendors.  Check if there has been a dramatic increase in size of payment or in frequency of payment.  Ensure that none of the payments are being made during the night or to an unusual city.

       

      4. Avoid giving any one person total control.  In an ideal world, one employee would place the purchase order. A second employee would review the invoice for the services and goods received.  Thirdly, another employee would approve the invoice and send it to the bookkeeper for recording.  The owner or dentist is the  ONLY one authorized to sign and pay the bill.  This can be challenging for smaller offices and may need to be modified.  However, whatever the situation, the dentist is the only one authorized to sign the check.

       

      5. Check the Audit Trail in the accounting software.  Usually employees do not have access to the accounting software or it is limited to certain functions.  Every employee should have their own user id and password.  Passwords should never be shared.  In the audit trail the dentist can check if any write offs or changes are being made and by whom.

       

      These are all easy steps that can make a difference.  They can be especially effective if everyone in the office knows the business owner is checking his/her financials.  It can make an employee think twice and be a deterrent if it is known that the dentist is paying attention.

       

       

       

       

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