Cliff's Notes

Embezzlement? Who, Me?

“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.

Yes, you have silent partners, then again, maybe they are not so silent. Did you ever hear the phrase “hiding in plain sight”? Embezzlement in a small business can be one of the most emotionally devastating situations that a business owner will go through. However, after you get past the anger and the feelings of betrayal you need to look back and understand what just happened and how it occurred.

As a dental business consultant with 40 years under my belt I have seen and been involved in many “uncomfortable” situations. Quite often I recognize warning signs but due to my own personal ethics and the law all I can do, until asked, is to talk about proper accounting and accountability procedures.

Hey, just like my clients, I love talking about dentistry and all the new technologies, diagnostics and material advances. That’s what we do, that’s the passion we have, that’s what get’s the motor running. It’s an exciting and comfortable zone. But, to sustain the passion you need a strong defensive posture. Now it’s time to step out of your comfort zone.

There are multiple ways that an employee can embezzle and it isn’t always money. Although we equate embezzlement to front office work that’s not always the case. Do you know how many handpieces you have? Have you looked on E-Bay lately? When was the last time you did a physical inventory? How often do you have a complete accounting review? I don’t mean a tax time deal, I mean a good forensic accounting review? In my opinion, a full review should be part of your Q3 (3rd Quarter) tax planning session. Do you know where your revenue is coming from and exactly (to the penny) where it is going. Good accounting practices are essential & priceless!

My dad (Jack Marsh 1916-1985) is my hero. He was part of the Great Generation, a good man and completely self made. He once told me “trust 2 people in your life, God and yourself, and you may want to watch God he can be tricky”. What he was telling me was to pay attention to the world around me and always develop checks and balances within a business operation. An employee will embezzle for many reasons and they will justify their actions. They may be new to the organization or a long time “friends” but this is your business and your responsibility to protect. Question, who has keys and alarm codes? Please feel free to contact me at any time with any questions or concerns.

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

December 6, 2015 Posted by Cliff's Notes Blog | Uncategorized | Leave a comment