How often does the dentist and/or staff remind patients that regular dental examinations and good daily oral hygiene habits are critical to maintain good dental health and prevent periodontal or other types of oral diseases? Even though you continue to remind patients, there are always a few who choose to ignore your advice and preventative treatment until serious damage is done to their teeth. They just do not think that it could possibly happen to them.

Frequently, even the dentist may suffer from a similar lack of foresight. Whether you are a young dentist who just purchased his/her first practice or a seasoned practitioner getting ready for retirement, many dentists do not establish an appropriate system of internal controls in the dental office until after the damage is done. The damage in this case unfortunately results in theft in the office possibly by your trusted staff. Dentists are unfortunately vulnerable to theft in the office as they typically work hard in the practice and hence need to rely on competent staff to take control of the practice’s finances.

Although having a system of internal controls in your office does not guarantee that you will never be a victim of theft or fraud (much like a patient cannot eliminate all possible dental problems by brushing and flossing regularly), a proper system of internal control will minimize the risk of theft/fraud.

Here is a list of 12 internal controls which should reduce the risk of theft in your dental office:

1. Before signing any cheques, review all necessary supporting documents (i.e. matching invoices to packing slips/receiving reports). The receipt of supplies should be verified prior to approving invoices for payment. Refuse to sign blank cheques. Do not allow use of signature stamps on cheques.
2. In order to prevent the same invoice from being paid twice, stamp all paid invoices “PAID” and record the cheque number on the invoice.
3. Review your cheque register periodically to look for cheques paid to any unusual suppliers or individuals. If you see a supplier’s name that is not familiar to you, follow-up to ensure that the suppliers are being paid only for supplies actually received and used at your dental office.
4. Reconcile and review daily deposits with cash balancing sheets on a spot check basis (at least once per week).
5. Reconcile your bank accounts on a monthly basis, as soon as possible after each monthly statement is received.
6. Review all write-offs and credits to patient accounts at least on a weekly basis. This will reduce the likelihood that a patient payment may be recorded as a write-off while the cash payment is stolen.
7. Establish a petty cash fund, which reduces the likelihood of theft. For example, a petty cash fund of $200 should have at all times cash, receipts or a combination thereof totaling a value of $200. Replenish the petty cash fund when it is low (i.e. when it is comprised of mainly receipts) and only after reviewing supporting documents.
8. Ensure cheques are protected by implementing the following:
– cheques should always be pre-numbered;
– cheques should be stored in a locked place;
– keep all voided cheques and cut out the signature area.
9. Have all bank statements, including cancelled cheques, sent to your home address instead of directly to the office. This should allow you an opportunity to review the bank statements and cancelled cheques prior to your staff. This review would hopefully allow you to identify any unusual activity/theft. If a cheque is paid to an unknown supplier or individual, then investigate.
10. All cheques received from patients should immediately be stamped “FOR DEPOSIT ONLY”. This should avoid or prevent any unauthorized cashing of cheques by personnel. Also, deposit should be made on a daily basis to eliminate or minimize excess cash on hand.
11. Duties should be segregated, where possible. The duty of reconciling the bank statements should be performed by a staff person who is not involved in receiving payments, recording transactions or making deposits. If possible, have a trusted family member handle the reconciliation of the bank statements. Otherwise an independent individual will suffice.
12. Use password protection in your dental billing software to minimize possibility of theft. i.e. write off of patient accounts should be done by a selected few. Maintain controls over Interac machine to ensure refunds to patients cannot be issued without proper authorization.

The implementation of internal controls can never guarantee that problems will not occur. However, being involved with the financial affairs of your practice will assist in responding in an effective and timely manner should any unusual activities take place. It could also reduce the likelihood of theft in your office.