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Keep What You Make: Top Tips to Stop Employees from Stealing Money

Dec 5, 2019 | Uncategorized

We read about it all the time. Maybe a receptionist has pocketed the patient copayments, an office manager has taken the insurance checks, or a trusted bookkeeper has stolen thousands. But how much of that really happens and shouldn’t someone have noticed it before they did?

Well it turns out it happens a lot more than you might think. A recent estimate by the Association of Certified Fraud Examiners indicates that a typical organization loses 5% of its annual revenues to some form of fraud. Their 2012 Report to the Nations ( showed that the healthcare industry was the 4th highest on the list of the number of reported cases of fraud and that the median loss in the industry was $200,000 per case. (pg 29)

And why didn’t someone notice? There are lots of possibilities.

  • The thief might be someone they worked great with for a long time who suddenly had some personal financial crisis. They had grown to depend on him/her over the years- maybe even thought of him/her as an extended family member- and when the numbers looked weird they believed the explanations.
  • They might have received some reporting statements from the thief each month and nothing jumped out as being wrong. Unfortunately they didn’t realize that the reporting software could be manipulated to report false information.
  • They might have gotten no reports from anyone that made sense and the thief blamed it on software that was too complicated or staff that was untrained or incompetent.
  • The theft might have started out slowly and just gradually built to bigger and bigger amounts over time so there is no one large incident that seemed suspicious. When compared to other years, nothing seemed out of whack.

So how do we make sure it’s not us everyone is reading about? Can we totally prevent theft? Unfortunately, no one can promise this. However, there are some simple, low-cost procedures that can limit our exposure; they make fraud harder to accomplish and more likely to be detected early.

  1. Establish control. The ultimate goal is for there to be a way to check up on everyone and have everyone know you’re doing it. Once you’re sure the system is working, you don’t have to actually check up on everyone every day, but you do need for there to be a way to do it if you need to. And you need to check up once in a while so everyone knows you are still paying attention.
  1. Find your important processes and develop some reports so that you can check them.   Two of the most important processes are billings/receipts and the receipts/disbursements cycles. I’ll talk about some recommended reports and how to check them a little later.
  1. Set some key data points you can look at each month. What are some of the numbers that would let you know the finances are on track? These are the reports you should look at to see how they trend over time. You probably have a good idea of what some of these might be, but here are a few that might help you spot theft problems once you start seeing them each month:

Billings and Collections Data:

  • number of patients seen by each practitioner
  • amounts billed for each practitioner
  • average billed per patient for the month
  • average collected per patient for the month
  • the percentage of insurance collections to amounts billed for the month
  • number of patients with outstanding balances older than 90 days

Cash Data:

  • Total collections
  • Total disbursements:
    • Payroll and related taxes and benefits
    • Medical supplies and patient support
    • Occupancy costs
    • Everything else
  1. Always
  1. Never…

And finally, your last line of defense? Make sure employee fidelity coverage is included in your insurance policy.



are all important in letting employees know that you care enough about the importance of controls to do your part. And when employees know that you care, they are more likely to report suspicious activities to you when they find them. According to the Association of Certified Fraud Examiners, the most common method of detecting fraud (over 34%) is by getting tips of known or suspicious behavior, and nearly two out of three tips come from employees.*


Are these controls enough? Although all the controls discussed here may have found the thefts in the examples given, there are still many other ways to steal money. Other controls are likely to be needed to complete your system. .








The reports you get should look something like this:


The important thing here is to perform a quick review of the charges and collections to make sure it all makes sense. Check the beginning balances to last month’s report. Scan the billings and collections lists quickly to make sure they conform to your patient activity as you remember it. Occasionally check a write down or two between your billing reports and the EOB’s. Make sure the bad debt write-offs and the age of the receivables makes sense. Flip through the collections files to make sure the staff is continuing to work on them constantly. Pick an item or two to ask about. Scan the vendor list from the accounting software along with the cancelled checks in the bank statement and make sure they appear to be the same. Make sure you recognize them all and know what was bought from them. Make sure the ending cash on the report reconciles to the bank statement- it should only be different by the deposits in transit and outstanding checks. Briefly scan the lists of outstanding items to make sure they’re not too old.


This process should not take too long but is invaluable for letting staff know you are aware.




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