Business is tough. Costs are rising, but revenues are not. Transactions and new-client numbers are flat, and so is the pet population. Unprecedented competition in the pharmacy world threatens a once-solid income stream. Dr. Google is ever more prominent.<\/p>\n
Veterinarians are anxiously looking for solutions. When things aren\u2019t going in the right direction, revisiting the basics is always a good idea.<\/p>\n
I recommend you start at the beginning by reviewing your system of internal controls, or the lack thereof.<\/p>\n
I believe there are two types of veterinary practices: those that have been stolen from and those that know they\u2019ve been stolen from. While stopping theft completely may be impossible, the problem can be deterred and mitigated.<\/p>\n
Which practice owner hasn\u2019t suspected that money mysteriously disappeared? Wondered about vanishing flea\/tick preventives and pet food? Noted exceptions in the controlled-drug log? Seen unexplained adjustments and discounts on end-of-day reports?<\/p>\n
They\u2019re rightly concerned. Eighty-six percent of respondents in an American Animal Hospital Association survey said employees had stolen from their veterinary clinic. Perhaps the other 14 percent had yet to notice.<\/p>\n
Security experts estimate that as many as 30 percent of all employees steal and that another 60 percent would steal if given sufficient motive and opportunity. No employee is fraud-proof. No practice is immune.<\/p>\n
Practices are attractive targets. They are small businesses, often with trusting owners and minimal internal controls. Because of their size, practices usually have fewer checks and balances and less segregation of duties \u2014 assigning different people different tasks \u2014 than larger businesses do.<\/p>\n
Internal controls are systems of checks and balances that help ensure that clients pay for the goods and services they receive. The practice\u2019s assets are safeguarded.<\/p>\n
Internal controls are necessary to deter employee fraud, embezzlement and theft. They are the ounce of prevention worth a pound of cure.<\/p>\n
Certified public accountants are trained to evaluate internal controls. Invite your CPA to review your systems and processes.<\/p>\n
The largest embezzlement case I witnessed firsthand was at the Fellowship of Christian Athletes. Over a seven-year period, the associate finance director, who had worked there for over 20 years, stole more than $1.1 million.<\/p>\n
I\u2019ve seen it all at veterinary clinics: spouses stealing from one another, partners cheating each other blind, trusted hospital managers with a dark secret, receptionists enjoying lavish lifestyles financed through crime. The one thing these practices shared: the false belief that \u201cit could never happen here.\u201d<\/p>\n
As a small business, veterinary practices may not be able to totally prevent theft, but they can take aggressive steps to deter employee deceit. The secret is to not become too trusting. The typical embezzler seems an unlikely candidate: a long-time employee who appears to be loyal and trustworthy. Practice owners should always exert healthy skepticism, especially toward those they trust most.<\/p>\n
Establishing and adhering to strong internal controls is not costly, difficult or time consuming.<\/p>\n
1. The cash drawer raid <\/strong><\/p>\n This is the most serious and urgent risk because cash is quickly and easily stolen. No one person, however much trusted, should handle all phases of a transaction. For example, entering the transaction, collecting the money, recording the daily receipts, making the daily bank deposit and reconciling the bank statements should never be one person\u2019s responsibility.<\/p>\n The cure:<\/p>\n 2. The void, credit, refund, discount, adjustment or write-off scam<\/strong><\/p>\n The client pays and receives a receipt. Later, the thief creates an exception \u2014 void, credit, refund, discount, adjustment or write-off \u2014 and pockets the equivalent in cash from the drawer. Everything balances at the end of the day.<\/p>\n The cure:<\/p>\n 3. Your pharmacy is my pharmacy<\/strong><\/p>\n Does every item purchased make it onto the shelf, or is a \u201ctrusted\u201d employee a big seller on eBay?<\/p>\n 4. Purchasing shenanigans <\/strong><\/p>\n Are games being played with your checking account?<\/p>\n The cure:<\/p>\n Business is tough.<\/p>\n","protected":false},"author":32,"featured_media":427,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"iawp_total_views":0,"footnotes":""},"categories":[331],"tags":[],"class_list":["post-426","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-august-september-2017","clinical_topics-practice-management"],"acf":{"hide_sidebar":false,"hide_sidebar_ad":false,"hide_all_ads":false},"yoast_head":"\n\n
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More Cures<\/h3>\n
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