You have enough to think about when running a successful dental practice. But did you realize that studies indicate that 75% of dental practices will experience fraud or embezzlement at some point. It is important to know how to prevent it and the signs to watch for, so we talked to David Harris, a Certified Fraud Examiner and Licensed Private Investigator to get the information you need.

Understanding Embezzlement

Embezzlement can occur in any business and is more common that you think. Most people that decide to steal from their employers fall into one of two categories: those who need money and are willing to go to desperate measure to get it, and those who simply take advantage of an opportunity. Recognizing these motivations is key to prevention.

Signs of Embezzlement

Always be vigilant for any of the following signs:

1. Unusual Behavior: Changes in an employee’s lifestyle, such as sudden wealth or secretive behavior, can be red flags.
2. Financial Discrepancies: Regularly review financial statements and look for inconsistencies.
3. Lack of Transparency: Employees who are reluctant to share information or bypass standard procedures should be closely monitored.

Preventive Measures

To mitigate your risk, implement these practices right away:

1. Conduct Regular Audits: Conduct frequent and random audits to catch irregularities early.
2. Segregate Duties: Ensure that no single employee has control over all aspects of financial transactions.
3. Institute Strong Internal Controls: Develop and enforce robust internal controls to make it difficult for someone to embezzle.

Embezzlement is a serious threat to dental practices, but with vigilance and strong preventive measures, it can be significantly mitigated. Practice owners should remain proactive and informed to protect their businesses from potential financial harm.

For more detailed insights, refer to David Harris’s book, Dental Embezzlement: The Art of Theft and Science of Control and visit his website, Prosperident.