According to a study by the Association of Certified Fraud Examiners, an average business enterprise part with about five percent of their revenues to fraud/theft. This fraud can be perpetuated by using a business’ credit facilities for personal aggrandizement or manipulating payment records to generate a revenue stream for an individual’s benefit illegally. Needless to say that fraud is a criminal act punishable under the law.
Dishonest employees abound in every business, and the dental practice isn’t left out. People steal from their employers all the time; it’s an act that has existed as long as business itself. Perpetrators of this dastardly act see stealing from their employers as a sure avenue for getting out of their financial troubles. Most times, they turn out to be the employer’s most trusted workers.
Embezzlement of funds is common in dental practices, majorly due to a dentist’s tight schedule. Many times, dental business owners are saddled with numerous responsibilities and are often stretched thin with tasks. As a result, they find it challenging to pay the required attention to every financial transaction as they would their patients.
In preventing or handling fraud in a dental practice, a dental CPA in San Diego is your best bet. They possess the professional expertise and skills required to manage financial misappropriation of any magnitude. Some of the ways they do this are examined below.
1. Segregation of Duties
One of the steps a dental CPA in San Diego takes in preventing fraud in dental practices is segregating the duties employees carry out in the office. Allowing one person to handle every financial transaction and procedure might put your business in jeopardy. A situation like this would make an embezzler easily commit fraud or thefts and cover-up, the effect of which might be disastrous for the practice.
So, how does segregation work? It’s simple; the person who writes the check should be different from the one that approves invoices. The individual that handles bank deposits shouldn’t be responsible for reconciling bank statements. Break up the chain of duties such that it becomes almost for any leakage to occur. Doing these will put a seal on fund misappropriation.
2. Assigning Responsibility for Cash Transactions
A dental CPA in San Diego knows that petty cash accounts are easily prone to misappropriation. To ensure this doesn’t happen, a dental CPA, with your approval, assigns a specific individual to be in charge of deposits and withdrawals. This independent employee requests original receipts for purchases at all times.
In the same vein, they limit the amount of cash that can be withdrawn at a particular time, and a policy is set for usage, which must be followed at all times.
3. Reconciling Credit Cards and Bank Statements
The reconciliation of credit cards and bank statements is a financial management strategy that every dental CPA adopt in tackling fraud in dental practices. When financial statements aren’t checked regularly, there’s always an opportunity for fraud to take place. A dental CPA helps you reconcile monthly accounts as soon as they come or teach you to do the same. Always request original documents for every financial transaction.
The involvement of a dental CPA in the finances of your practices is essential to preventing employee fraud. Hire one today, and you’d be better for it.