Volume 44: Only Trusted Staff Can Defraud You

Download the PDF version now!

I talk to many dentists and I am surprised at the number of dentists that have been defrauded by their staff. There are many ways that individuals can defraud you. Generally it is not more than one employee. Due to the limited number of staff in some practices it is difficult to divide up the duties to have good internal control. If multiple staff members act in collusion they could get away with gross fraud for years unless the doctor or their spouse insert themselves into the system to keep an overview of certain key reports such as the deleted treatment or cancelled charges reports.

Some of the fraud is as simple as taking patient cheques to the bank to have them cashed “for the dentist” and then covering up the theft by cancelling the charge to the patient. This can be very costly as you will have:

a) the loss of the cash or cheque

b) to pay the government income tax for the income recorded before it was stolen if the cover-up did not reduce the gross revenue (a “double whammy”)

c) the feeling of betrayal within the team – loss of focus for the team

Other types of fraud have more long reaching implications – particularly when insurance companies are involved. If a staff member sends in false claims and diverts the cheques it is difficult to detect – and creates another “double whammy”. The insurance company will demand repayment of the funds fraudulently paid “to the dentist” if the procedures were not performed on the insured person and the cheques were intercepted by the “trusted” staff member. This type of fraud can be avoided by a separation of duties whereby the person who opens the mail is not involved in the billing or insurance claims.

Different computer programs have different procedures, but all programs will print off daily sheets. These sheets should be reviewed by the dentist and signed and retained as a permanent record. All adjustments (write-offs, deleted treatment reports, cancelled charges, etc.) should be reviewed by the dentist, signed and retained

Even when a fraud is detected it is often impossible or very time consuming to determine the extent of the theft, with limited hope of getting the money back. Yes, you can terminate the employee (use a lawyer) but a lawsuit to recover the money or obtain a conviction is generally not an option. An ounce of prevention is worth a pound of cure. Certainly, when hiring new staff check all references – but this is only the first step. Setting up good internal control procedures in your practice with the assistance of your accountant is the best long term protection. There are courses in fraud protection for dentists if you want to get directly involved. There is no department in the dental community to register individuals who have defrauded their dentist. This means that individuals can go from practice to practice without a track record.

If an employee is not a trusted employee it is difficult for them to steal from you as you are monitoring their work. The trusted staff member is the only one that can defraud you if you do not have the internal control procedures to protect your practice.

If you have been defrauded and would like to anonymously relate your situation to me to report in future Professional Advisory issues, I would be more than pleased to receive the information and to disseminate it to the dental community with full anonymity for you.

Graham Tuck, H.B.A., C.A. is the broker of Professional Practice Sales Ltd., which specializes in the valuation and sales of dental practices. He can be reached at   (905) 472-6000 or

1-888-777-8825 or e-mail at:

The Professional Advisory

  1. One Year Later

  2. Dealing with Unsolicited Offers

  3. Covid-19 Practice Sales Update

  4. When is the Right Time to Sell Your Practice and Why?

  5. Partnership Pitfalls

  6. The Real Cost of a Dental Practice Set-up

  7. Smaller Practice Realities

  8. Dental Market Update - 2019

  9. Creating Your Own Most Valuable Practice (MVP)

  10. Small Practice Economics

  11. The Market is Very Efficient

  12. How Can Dental Practice Values be Rising and Declining?

  13. Hygiene as a Value Driver

  14. The Value of a Good Team

  15. Is it Time to Move?

  16. Staging A Dental Practice

  17. The High Cost of Dying

  18. Deal-Busters

  19. Patients - Attract and Retain

  20. Should I Stay or Should I Go?

  21. Is There a Buyer for Every Practice?

  22. Good, Better, Best - The Market has Spoken

  23. Smooth-Sale-ing

  24. Buying Time

  25. Patients, Patience, Patients

  26. A Real Patient

  27. Why Do a Practice Valuation? I'm not Selling

  28. Irrational Exuberance or The New Normal?

  29. Do dental equipment and dental technology affect a practice value?

  30. Finding and Being a Mentor

  31. Bigger is Better

  32. Dave's Top Ten List for Buyers (Vendors should read this too!)

  33. How Well Do You Know Your Practice?

  34. Dave's Top Ten List for Vendors

  35. What will happen to dental practice Values in the next 10 years?

  36. Your Premises Lease is an Important Asset

  37. What are Associates Thinking?

  38. There is Life Outside the GTA

  39. When Is the Right Time to Sell My Dental Practice?

  40. Mergers are a Viable Option

  41. Is Your Associate an Asset or a Liability?

  42. Has your Practice Facility Kept Up With Your Billings?

  43. The 100 per cent of Gross Myth

  44. The Past, The Present and The Future

  45. Caveat Emptor

  46. Overpaid Long Term Staff

  47. Selling your Practice in Stages

  48. A Potential Pitfall of Selling Shares

  49. Value in Your Practice Through Balance

  50. Only Trusted Staff Can Defraud You

  51. To Own or Not to Own Practice Real Estate? That is the Question.

  52. Coping With A Large Patient Base

  53. Successful Dental Practice Transitions

  54. Taking Care of Business

  55. The Investing Dentist Phenomenon

  56. Two areas to focus upon that could negatively impact the value of your practice

  57. Organize your Debt in Order to Sell your Practice

  58. Having a Better Team

  59. How Do I Prepare My Practice For Sale

  60. How Do I Prepare My Practice For Sale? Part 3

  61. How Do I Prepare My Practice For Sale? Part 2

  62. How Do I Prepare My Practice For Sale? Part 1

  63. Advice to My Son or Daughter Graduating from Dental School

  64. Transition - What to Expect

  65. Discussion on Digital X-Rays

  66. Partnerships and Shotguns

  67. Strategic Planning - How to Get Started

  68. Calling All Vendors - Practices have Gone Up in Value

  69. Purchasers: Expect to Pay More for a Practice because of Lower Professional Corporation Tax Rates

  70. Matrimonial Practice Valuations

  71. Purchaser's Guide to Affording a Practice

  72. Location Improvements Throughout Your Career

  73. Small Practice Valuations

  74. Partnerships – The Best and The Worst

  75. Changing Location When the Opportunity Comes Along

  76. Visual Presentation of Your Practice

  77. Presentation of Charts

  78. Your Premises Lease Can Be Your Worst Enemy

  79. How to Select an Appraiser for Your Practice

  80. How Are Your Billing Ratios?

  81. It Pays to Invest in Your Tangible Assets

  82. The Importance of Separate Financial Statements

  83. Five Time Frame Levels to Sell a Practice

  84. 12 Suggestions to Safeguard Computer Data

  85. How to Buy a Visible Practice

  86. Why is there a shortage of good practices today?

  87. The Importance of Equipment in the Purchase of a Practice

  88. The Balanced Practice

  89. Will My Practice Be Saleable in The Future?

  90. Buyer Be Aware

  91. Excess Profit - The Second Key

  92. Patients and Profits are the Keys

  93. Plan Ahead