Northfield NJ CPA – Tax, Accounting & Consulting Services (609) 641-4000  | 

Doctor and Dentist Corner: An Ounce of Prevention

Nov 27, 2019 | Business, Healthcare

Long-term, well trusted employees are an employer’s dream.  In the event that an employee is dishonest, good internal controls can keep that dream from becoming a nightmare.

For medical offices, there is a significant risk that employee dishonesty will lead to the diversion of collections with a corresponding record-keeping cover up.  To mitigate this risk, the person who opens the mail or collects funds should not have the ability to credit a patient’s account.  Additionally deposits should be made daily and collections should be posted to patient accounts based on the date received.  This allows an owner to reconcile patient funds received to deposits.  Of course, an owner must regularly perform this check, and it’s never a bad idea for the employees to know that this is done.

Regular online account statement review by the owner and the owner’s monthly review of statement transactions and cancelled checks may be an especially important internal control in a small practice where there aren’t enough employees for an adequate segregation of duties.  An alternative to online statement review would be for the owner to receive the unopened bank and credit card statements and review the hard copies for suspicious activity.  Another effective and important control is for the owner to perform regular reviews and approval of write-offs.

If you would like assistance in establishing or reviewing the effectiveness of your internal controls, please contact us.  In our next issue we will help you identify signs of potential problems resulting from employee dishonesty and suggest more ways to help you avoid them.

Article contributed by Terri Marakos, CPA

Photo by Pixabay on Pexels

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