This article is co-authored by David Harris and Amber Weber-Gonzales, experts on embezzlement in dentistry.
David Harris is the CEO of Prosperident, the world’s largest company specializing in embezzlement investigation and risk reduction for dentists. Amber Weber-Gonzales heads Prosperident’s Proactive Services Department, which works with dental practice owners to implement financial oversight and controls to lessen their exposure to staff-perpetrated embezzlement.
The authors have combined decades of experience with every facet of embezzlement in dental practices, including investigation, acting as expert witnesses, working with law enforcement and prevention. Both David and Amber are active speakers and published authors. Read more about both authors at the end of this article.
Pssssst. Want to know a secret? Even better, one that will help protect you against employee theft.
Embezzlement is not a small problem in dentistry. Published studies reveal that almost half of practicing dentists have already been victims. Making assumptions about how many will be embezzled in future, it is a safe bet that 70% of dentists will experience embezzlement in their careers, many of them multiple times. This makes dentistry one of the most embezzled professions.
A crawl through Prosperident’s case files reveals some other shocking statistics. The average amount stolen exceeds $100,000, and the typical embezzler steals undiscovered for almost two years. These numbers suggest that the conventional wisdom about embezzlement protection is ineffective.
Our expert authors have collectively handled thousands of dental embezzlement cases and encountered many creative tactics allowing thieves to navigate around the scrutiny of their practice owners. While books have been written about practice control systems (including one by us!), there is one simple and quick control that is overlooked by literature, and by most practice owners.
Most dental practice owners realize the importance of a review of day-end reports (sometimes called “daysheets”), even if they don’t always perform this vital review.
A few considerations when reviewing daysheets:
- It must happen daily. This review is your primary tool for ensuring integrity of what is entered into your practice management software.
- The review needs to be contemporaneous, i.e., before you leave for the day. Reviewing today’s report tomorrow or next week is ineffective.
- You can eliminate “selective reporting” that hides certain transactions by printing day-end reports yourself.
- While conventional wisdom suggests you should match deposits to collections daily, we recommend doing this once per month using monthly data. We will discuss how to do this reconciliation in an upcoming article.
- This is the secret one. Day-end reporting must articulate with monthly totals.
Articulation
When we use the word “articulation” with dentists, inevitably we evoke an image of the mandible and maxilla functioning in harmony. However, we are referring to articulation of reports, which most dentists have not heard of.
Financial articulation is a quick and highly effective financial control mechanism for a dental practice. It ensures that no practice management software transactions are concealed from a practice owner by being entered outside of practice hours. Put alternatively, for a practice owner who monitors their day-end reports, financial articulation is the method of ensuring that all transactions that have occurred in a month were included on the daily reports that you have already reviewed.
So how do you do an articulation calculation? It’s simple. First, you need to build the habit of printing and reviewing your practice’s day-end report every day before you leave. Also, printing “after the fact” day sheets in bulk at the end of the month will not work for this purpose.
By reviewing (and acting on) an end of day report, you are also instilling accountability for your team.
After your daily review, put your initials on the day sheet you reviewed (to provide confirmation that was the exact day sheet that you looked at) and put it in a locked drawer.
At the end of the month, print a month-end summary from your practice management software. Next, you are going to perform a simple calculation involving three totals from the reports. Both day-end and month-end reports provide totals for fees billed, adjustments made, and payments received. Financial articulation involves totaling each of these items for all daysheets for the month and comparing it to the month-end report. So, if your practice was open seventeen days last month, adding up the fees billed from each of the seventeen daily reports should equal the total fees according to the month-end report exactly. The same equality should apply to adjustments and payments.
If one or more of these three totals does not articulate, this is usually caused by someone making entries in your practice management software after hours or on a weekend, for which you have not seen a day sheet. Possibly this is benign, and you simply were unaware of the activity, or it might be a deliberate attempt to skirt your scrutiny. If there is a discrepancy, you need to track the extracurricular entries down, review them, and decide whether they give cause for concern. If embezzlement is a possibility, it is important that you get expert assistance immediately and not do anything to alert the suspect.
Certain improper transactions will cause a retroactive change in day-end totals. Printing and securely retaining contemporaneous reports gives the ability to isolate such transactions if the take place.
To make the computations easier, we have an Articulation Spreadsheet where you can enter the daily and monthly totals, after which it will perform the calculations. This spreadsheet allows for input of daily totals and provides totals to compare easily with monthly reports. If you want a copy of our spreadsheet, contact us at www.prosperident.com/contact-us and we will happily share. Using the spreadsheet to do the computations, your once-per-month articulation calculation should take about 15 minutes.
Also, as you have probably realized already, the articulation calculation is mechanical and does not require dental knowledge or use of judgment, which means that it could be outsourced to an external bookkeeper, your spouse, or your college-age child looking to earn spending money. What won’t work is handing this problem to a team member, because doing so can undercut the operation of this control.
Articulation is a quick and easy control and can be implemented easily in your practice. It will flag many of the commonly used embezzlement techniques thieves use. In our next article we will address the monthly comparison of collections according to practice management software with bank deposits.
Do you have questions or want to learn more? We are happy to help.
Contact us: www.prosperident.com/contact-us to arrange a time to speak with one of us.
Amber Weber-Gonzales
Amber Weber-Gonzales, began working in the dental field as a Registered Dental Hygienist in 2005. With a background in accounting and her interest in the business side of dentistry, she moved into office management roles and ultimately into dental consulting. Before joining the Prosperident team, Amber discovered embezzlement taking place in one of her clients' offices, bringing to light her aptitude for the kind of investigative and preventative work she now performs for our clients.
Amber was recently the runner-up in the prestigious Spotlight on Speaking competition, featuring dentistry's best-emerging speakers, and has been published in Dentistry Today magazine. In June 2022, Amber was appointed the head of Prosperident's Proactive Services Group, which provides embezzlement prevention services to individual practices, groups, and DSOs.
