She is your most trusted employee. She's been with your practice for years. She comes in early, stays late, and absolutely refuses to take time off. Because she wants things to be just right, she never delegates tasks just tries to manage it all herself. Whatah Woman!
Some staff members think she's controlling, but you see her as a perfectionist and true professional. You would trust her with your life. In fact, you have. She manages all the financial transactions from start to finish. You know it's a big job, but even though she's at work all the time she doesn't seem to mind. That's because your trusted, hard-working employee may well be a thief who's busy embezzling from your practice.
The Association of Certified Fraud Examiners estimated that in 2003 alone, embezzlement cost American businesses $660 billion , or 6 percent of total revenues, and while big companies get the big headlines it's the small businesses that take the big losses.
Unfortunately, there are many "trusted" employees pilfering from small businesses like yours. Practice/business owners believe their employees, particularly long-term employees, are inherently honest and can be trusted. Consequently, there are few if any checks and balances . Sadly, research has shown that a surprising number of employees are not honest. A study conducted by the U.S. Department of Commerce found that about one-third of all employees steal from their employers.
In security, the common guideline is that 40% of the workforce is inherently honest, 30% are looking for the opportunity to steal, and the other 30% will steal given the right circumstances. And while all eyes are on the new hire, it is the long-term employee who is the embezzler. She is the one who has learned the practice's systems and procedures and is able to devise the scheme to skim. What is perhaps most troubling is the embezzler is the one you would never suspect. Embezzlers are more likely to be married women, and they typically work for the business for four to eight years before they begin to steal. However, employees on the job for little more than a year have been caught embezzling from dental practices. And often they are your "perfect" employee – dedicated, loyal, hard working, and secretly dishonest.
So how do you know if that trusted team member is robbing you blind? Watch for a few indicators:
- No cash is being deposited or only even dollar numbers, such as $40, $60, $80, etc.
- "Write offs" or other adjustments to the patients' accounts can't be explained when the employee is asked about them.
- Fees are arbitrarily reduced or increased with no accountability.
- Certain accounts are not receiving statements but there is no reasonable explanation.
- Petty cash is littered with IOUs.
Pay attention to certain behaviors exhibited by the individual handling your accounts.
- Is the employee always the first to arrive at work, the last to leave?
- Does the employee never take vacation unless the entire office is closed or will only take a couple of days?
- Does the employee rarely if ever take sick days or personal days?
- Does the employee refuse to teach other employees her job? She claims that they will mess up her "system," or that she does things just so, etc.
- Does the employee adamantly oppose any changes to the accounting system?
- Does the employee have an unusually high standard of living considering her salary, such as new cars, new homes, extravagant jewelry, etc.
- Does the employee provide unreasonable explanations in response to questions?
- Does the employee become annoyed by reasonable questions?
- Is the employee highly critical of others?
Next week, what to do if you suspect sticky fingers are sticking it to you.
If you have any question or comments, please email Sally McKenzie at email@example.com.
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