So far I’ve presented six strategies for dealing with the problem of employee theft:
- Destroy all signature stamps and vow to never use them again
- Limit check writing authority to the owner(s)
- Limit depositing authority of staff and divide the duty between multiple employees with built in checks and balances
- Hire a fake consultant to review your processes to shake the tree; if something shakes out hire Waugoo Consulting Group to investigate the problems and create a plan to reduce your exposure to employee theft
- Computerize your inventory system and take physical inventory more often than annually
- Consider employing a video security system
This blog will continue to present steps that can help reduce your risk of the very real problem of employee theft. As I’ve said before, keep in mind that each tactic works on its own but is exponentially more effective when paired with an overall strategy employing multiple approaches. (Haven’t I said this before?)
Vendor Checks
Conduct semi-annual vendor checks. Maintain a list of all vendors and personally contact them twice a year. Ask for a statement to be sent to you personally (at home, possibly) that summarizes the past 6 months purchases and returns. This accomplishes several things. First, it prevents (or severely limits) an employees ability to create a shadow organization (i.e. a vendor in name only) commonly used to funnel practice funds while maintaining a proper and clean book record. Second, this allows for a means of comparing the vendors reports of how much you should have spent (and been credited) over the time period so you can compare with what was actually spent.
Secret Shop with Cash
Secret shop the practice with marked cash to see where it goes. The long term approach to this strategy has you using different amounts at different times with different staffers. Cash transactions are the most common way (in my experience) for employees to steal from the practice. The patient pays for their contact lens supply with $300 in cash and employee never makes a bill and never records the transaction. There is no record of the purchase on the books. Embezzlers vary in the amounts of cash transactions they prefer to target. Some only like the “little” stuff and others don’t waste their time unless it is over a certain dollar amount. Test all amounts on all staff over time. This goes without writing (but since I am writing it that means it has happened before) but don’t send the same person in over and over to be the secret shopper. Ideally, you want to recruit different people each time.
Password Protect the Owners Computer
Finally, password protect the owners computer. Many people are guilty of poor use of this most basic safeguard; don’t be one of those people. Also ask a family member to try and figure out the password and/or find where you store passwords for when you forget them. The password is only as good as its ability to remain secret and unfound. Finally, don’t make the mistake of giving this password to the staff. Nothing can be more self defeating than this mistake.
Le Meas,
John G. McDaniel, OD, MLHR
President/Founder
Waugoo Consulting Group, LLC
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