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Practice Management

Case Report: How Did We Hire This Person?

by Sheila Grosdidier, BS, RVT, MCP, Mark Opperman, CVPM
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    “It was definitely time to hire a manager.” Suddenly, the AAA Animal Clinic had four doctors and 18 employees, and the sole owner, Dr. Anderson (name changed as requested), had had enough of late nights filled with never-ending paperwork and of unhappy faces when he didn’t get back to team members on their time-off requests, unresolved personal issues, and yearly evaluations. But after 3 months of unqualified applicants responding to his online employment advertisement, frustration was the only thing he was finding to fill the new practice manager position.

    The Perfect Candidate

    And then the e-mail arrived. The resume was perfect, the cover letter was most impressive, and when he spoke with the candidate, she was professional and exactly what Dr. Anderson had hoped to find. Sarah Jones was offered the job after an onsite interview only a few days later. “I had to hire her fast,” Dr. Anderson recalls. “She had two other job offers, and I couldn’t take the chance that our practice would miss out on this great opportunity.” Sarah was moving back to the area after working for more than 10 years as a manager in a dentist’s office in another state. When Dr. Anderson called her past employer, it was a delight to speak directly with Dr. Burns, the dentist who had employed her for so long. Dr. Burns gave Sarah glowing references and said she was very sorry to see her leave. “If she comes back this way, we would hire her in a minute,” were the last words Dr. Anderson needed to hear to know Sarah was his next practice manager. Sarah started work the next week, and it seemed that all those late nights and piles of paper would at last be someone else’s responsibility.

    A Few Doubts

    Looking back, there was an assortment of oddities in the first 30 days of Sarah’s employment. She seemed easily confused about how to calculate payroll, even though she had done it for “eons,” as she indicated in her interview. Errors abounded in the daily deposits, requiring long, complicated explanations. Some retail products went missing; the controlled-substance log was “off” when it was reconciled at the end of the month. All things considered, the atmosphere in the clinic seemed to be different. One day, the bookkeeper came to Dr. Anderson and mentioned that Sarah had asked about having access to the accounting software to be able to check expenses on a more regular basis.

    After a few sleepless nights and more than a few concerns, Dr. Anderson asked Sarah to explain some of these issues. As usual, Sarah had good answers for everything and was surprised that her actions were being misinterpreted. After four more occasions when the deposits didn’t match the amount collected during the day, Dr. Anderson became quite alarmed. When he looked closer at the bank statements, there was money missing. He decided that something about Sarah was just not right. Yes, he might have been too quick to hand over the passwords and responsibility, but didn’t he have a manager he could trust?

    Dr. Anderson decided that the next day, he would demand some answers from Sarah and tell her that things couldn’t continue this way. But the next day, Sarah wasn’t in the office—she had called in sick. In fact, she never worked another day at the practice.

    The Truth

    Sarah disappeared. As it turned out, her Social Security number was someone else’s; her resume, a complete fabrication. The glowing reference from Dr. Burns was a disconnected number. Dr. Anderson looked Dr. Burns up online and called the number he found there. The dentist who answered knew nothing of a manager named Sarah—his wife had managed his practice for years. And along with Sarah, a total of $22,000 in cash and nearly $8,500 in inventory went missing.

    Don’t Abdicate Your Ownership Responsibilities!

    Close scrutiny of potential employees before hiring is just one requirement to avoid this type of problem. An effective, consistent hiring process can dramatically diminish the chance that you might hire someone who could harm your practice. Click here to learn how to establish a hiring process that can protect your business. See BOX 1 for what you need to know about electronic background checking.

    For more information and advice on effective hiring practices, read the article "Best Human Resources Practices for Your Practice."

    Internal financial checks and balances are also critical to safeguarding your business. When hiring a manager, it is important to understand that although you are delegating responsibilities, you are still the practice owner and must incorporate feedback and internal controls to make sure the practice is being managed properly. Dr. Anderson made a critical mistake: he turned over access to his accounting software and banking information without incorporating any internal controls. There is a rule of management that states, “Don’t expect what you don’t inspect.” In this case, it could be modified to say, “If you don’t inspect, you can expect some problems!”

    So what is an owner to do? Simple: build in some internal controls and be very diligent about reviewing them. Here are a few ideas to help you get started.

    1. Establish an End-of-Day Procedure

    Every day, have the receptionist print out the daily deposit report. This report states the amount in cash, checks, and debit and credit cards received by the practice that day. There should be a fixed amount of money in the cash drawer ($100.00). At the end of the day, the receptionist should count the cash drawer back to its base amount and take any remaining cash out of the drawer. He or she should then verify the amounts in cash, checks, and debit and credit card receipts against the deposit report. If everything balances, the deposit should be placed in an envelope and taken to the bank. A deposit receipt should be obtained from the bank and attached to the end-of-day report along with the credit card transaction journal (and any other third-party payments, such as CareCredit). The receptionist should then bring the entire package of information to the practice owner’s desk.

    As the owner, you should check and double check all the information. Make sure that the bank receipt equals the amount stated on the end-of-day report and that the total of the credit and debit cards equals what is stated on the transaction report. If everything checks out, initial the report and have it filed. This is not a responsibility that can be delegated to anyone else. It is the owner’s responsibility to verify these transactions.

    2. Review End-of-Day Reports

    Your computer software program has many end-of-day reports that can (and possibly should) be printed out, but several are critical to your internal controls and “inspecting the expected.” One report is called the itemized transaction report or transaction journal. This report should show you every transaction that occurred in the computer system and how it was paid. Look for negative transactions. If a refund, adjustment, or negative transaction was processed, it will show on this report.

    For example, say a receptionist invoiced a client for $220 and the client paid in cash. Then, later that day, someone went into the same patient’s record and generated another invoice for the same services, indicating the quantity as “−1” instead of “1” to generate a total of −$220. That person could then take the $220 out of the cash drawer and put it in his or her pocket. The cash drawer would balance, the client received a receipt, and everything would appear fine. The only way you would know what happened is by reviewing the itemized audit trail and seeing the positive transaction in the morning and the negative transaction in the evening. This report must be reviewed daily by the practice owner.

    Another end-of-day report that might be helpful in detecting any financial irregularities is the fee exception report. This report tells you if anyone charges less than the stated fee. If the computer says you should charge $45.00 for a service and someone charges $40.00, the fee exception report captures that information. This report can be very valuable for monitoring fee compliance.

    You may also wish to print out the open invoices report to see what invoices are lurking in your computer and why they have not been posted or completed.

    3. Maintain Your Passwords

    When was the last time you changed your passwords in the computer? True story: a veterinarian in Florida had a big fight with an associate. Unbeknownst to the owner, the associate decided to open up his own practice. Without quitting the owner’s practice, the associate obtained a storefront a few blocks away and set it up for his own practice. When he was ready to open, he went into the owner’s practice and wrote a letter to the entire client base informing them that the owner was a jerk and that he, the associate, was opening a new practice. He printed out the letters (on the owner’s letterhead), ran them all through the practice’s postage machine, and then wiped out the entire client base in the computer. Wow! How did he wipe out the entire client base? He had the master password! The practice owner had given it to him when he went on vacation and never changed it. When was the last time you updated your passwords?

    4. Sign Your Own Checks

    In my opinion (M. O.), the only people who should sign business checks are the practice owners—no one else. In fact, I would suggest that you have your bank statements sent to your residence. The bank should send you either the cancelled checks or electronic reproductions of them. Look at who the checks are written to, the amount, and the signature, and make sure all that information is correct. It will only take a few minutes and may help to prevent embezzlement in your practice.


    As a practice owner, you can delegate, but don’t abdicate. Ultimately, it is your practice, and as they say, the buck stops here! You have some responsibilities that you just can’t give away. Most people who have been victims of embezzlement say they would never have expected the perpetrator to steal from them in a million years. Build in your checks and balances, and make sure you review them on a consistent basis.


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