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10 Tips to Protect Your Practice from Embezzlement
Use these 10 tips to protect your veterinary practice from embezzlement.
Embezzlement affects the majority of health care professionals, so it’s important to make sure you don’t leave anything to chance when it comes to your veterinary practice finances. Here are 10 tips to protect your practice from embezzlement.
1. Use a system of checks and balances. This will help ensure that no one person has control over all parts of any financial transaction. Keep everything separate and make sure whomever is handling money or payments always has to report to someone else.
2. Reconcile your practice’s bank accounts every month. Reconciling bank accounts means you match each of the deposits in your records to those noted on your bank statements. Make sure this reconciliation is done by someone in your practice that doesn’t oversee your finances or disbursements.
3. Restrict the use of corporate credit cards. If you do use corporate credit cards for any reason, verify all charges to ensure they were strictly business related.
4. Provide directors oversight of corporate operations and management. If you have directors of hospital managers, use them. Don’t leave everything up to you — include your upper management to monitor your practice’s financial activity on a regular basis.
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5. Prepare all policies and procedures in writing. Include the policies and/or procedures for things such as: cash disbursements, attendance and leave, expense and travel reimbursements, use of assets, purchasing guidelines, petty cash and conflicts of interest.
6. Ensure that all assets are used for business-related reasons. Things such as vehicles, cell phones and other resources should be checked on a regular basis. Don’t leave anything to chance.
7. Protect petty cash and other funds. Limit who has access to these funds, and make sure they’re always kept in a locked box. Only entrust specific employees, if any, to hold the key.
8. Protect checks against fraud. A few things can help reduce fraudulent checks, such as: prohibiting the writing of checks payable to cash, defacing void checks, storing blank checks in a locked drawer and requiring two signatures on larger check amounts.
9. Protect cash and check collections. All cash and checks need to be recorded and deposited right when they’re received. You can also protect your cash by conducting unannounced cash counts.
10. Avoid related party transactions. Related party transactions are those between a parent and subsidiaries, or between an entity and trusts for the benefit of employees. If you don’t already, you need to have a written conflict of interest and code of ethics policy for your practice that is updated each year.