Safeguarding Your Dental Practice: The Importance of Monitoring and Tracking Financial Statements
By Larry Chatterley, From the Spring 2024 Journal of the Colorado Dental Association
Did you know that, on average, dental practices lose approximately 9% of their production revenue due to uncollected revenues? This alarming statistic highlights the crucial importance of diligently monitoring and tracking financial statements and other key bookkeeping and practice information within dental offices.
Protecting your dental office from fraud and embezzlement is paramount. Surprisingly, more than 60% of dentists will experience some form of embezzlement in their practice at some point, yet only about 21% of fraud cases in dentistry are prosecuted.
Here are five key financial strategies recommended by Angela Malan with dental-bookkeeping.com to help safeguard your dental practice:
- Invest in Your Staff: Your office manager can significantly impact the success of your practice. It’s essential to invest the necessary time and effort to find someone with whom you can effectively communicate and who is fully capable of managing all your practice’s needs. Additionally, ensure that your staff is compensated fairly for their work. Happy staff members contribute to smoother office operations and positively influence patient experiences.
- Outsource Where Needed: Engaging an external bookkeeper can alleviate unnecessary pressure and stress on you and your staff. Many dentists rely on spouses or front desk staff to manage bookkeeping tasks, but outsourcing this function is a crucial investment in the success of your business. Outsourcing your bookkeeping also serves as a preventive measure against fraud, as an external party can independently verify financial transactions.
- Regularly Check Day Sheets: Dedicate just a few minutes at the end of each day to review your practice’s day sheets. This simple practice can uncover overlooked issues such as untracked write-offs, unprocessed insurance claims, or unauthorized refunds. Ensuring that your front desk staff understands the importance of accurate billing practices is essential to prevent financial discrepancies.
- Verify Dental Insurance: Verifying dental insurance coverage is a critical responsibility of your front desk staff. Failure to do so can result in substantial losses for your practice. The average office loses 9% of its production revenue due to uncollected revenue, emphasizing the significance of thorough insurance verification procedures.
- Implement Audit Logs: Utilize audit logs within your dental software to track all data entries and changes made within the system. Additionally, restrict user permissions to ensure that only authorized personnel have access to sensitive financial information. Implementing these measures helps prevent fraud and ensures the accuracy of financial records.
Effectively monitoring and tracking financial statements is essential for safeguarding the financial health and integrity of your dental practice. By investing in your staff, outsourcing bookkeeping tasks, regularly reviewing day sheets, verifying dental insurance coverage, and implementing audit logs, you can mitigate the risk of fraud and ensure the long-term success of your practice. Prioritizing financial oversight will not only protect your practice’s bottom line but also enhance trust and confidence among patients and stakeholders.