Cliff's Notes

Embezzlement? Who, Me?

Cliff’s Notes for July 22, 2015

Cliff Marsh, Henry Schein ……Cell: 201-321-7494……Fax: 201-262-2210

E-mail: cliff.marsh@henryschein.com

http://www.cliffsnotesblog.me

http://www.youtube.com/cliffmarsh100

“Whoever is careless with the truth in small matters cannot be trusted with important matters.”  

Albert Einstein              

Oh! Embezzlement, now that’s a nasty word. I can’t count the number of situations I have comes across or heard about throughout my career. If you own a business you need to figure that you do or someday will have a silent partner.

So, what exactly is embezzlement? According to Webster: Em`bez´zle`ment – embezzlement – the fraudulent appropriation of funds or property entrusted to your care but actually owned by someone else. Synonyms: misappropriation, peculation, defalcation, misapplication.

It’s plane and simple, Embezzlement is theft and when it is a trusted team member (it usually is) the emotional effect can be devastating. Not only did I experience this with my own company, but I waded through the waters with numerous clients over the years. The scars and fear can linger on and dramatically effects on-going operation for years.

Who is responsible when an impropriety is discovered? In a larger operation (50+) the responsibility may be with a department manager, but at the end of the day the issue ends up on the owners desk. Embezzlement of liquid assets can easily be detected if the proper procedures and protocols are in place, hard assets are much harder to protect. We have all heard and learned about financial embezzlement, but what about the hard assets.

Did you ever log onto E-Bay? Try it, search dental handpieces and see what you come up with. How do you know that the Kavo Multifelex highspeed, that is like new and selling for $50.00 isn’t stolen property. I can’t tell you how many offices say to me that they used to have a lot of handpieces and “I don’t know what happened”. Well I do. What happened is that you did not properly inventory and track your serialized assets. I am not saying that your handpiece or light guide were stolen, they were probably discarded by accident, but every dental practice (business) should have a record of every piece of equipment including serial number, purchase information and a maintenance record.

As far as financial monitoring, I suggest quarterly financial reviews. Also, whoever opens the mail and enters payments into your management software should not be the same one that fills out your deposits slips.

Now the biggest problem, What do you do if you suspect embezzlement? The very first thing is to consult with your accountant or financial advisor on an action plan to validate your concerns. If your suspicions are confirmed, contact your legal advisor BEFORE confronting the employee. Several years ago one of my clients had a suspicion of employee theft. They installed cameras (not a bad idea for security) and witnessed the employee take a $50.00 bill. That $50.00’s could have been $5,000.00.

Please feel free to contact me at any time with any questions or concerns.

July 22, 2015 - Posted by Cliff's Notes Blog | Uncategorized