Article Date: 6/1/2010

Finding the Perfect Partner

Ten Theft Thwarting Tips

Your colleagues/practice management professionals offer 10 tips on how to prevent your employees from stealing from you.

LOU MANCINELLI, Contributing Editor

Lorraine Montalvo, 47, of Lansing, Mich., has recently begun a one-year prison sentence for stealing more than $100,000 from Optometrists of Lansing — a practice at which she worked for 26 years, according to city newspaper, the Lansing State Journal. She told the judge who sentenced her that when patients paid cash, she'd use it at a casino.

OM columnist and practice management consultant, Richard Kattouf, O.D., D.O.S. of Warren, Ohio, says he was recently hired by a Midwest practice to assess a "numbers" problem the practice's accountant "couldn't figure out."

"It took me two days to discover the practice's office manager had embezzled $204,000," he says.

Dr. Kattouf, adds that through his consulting experiences, he's discovered employees also steal pens, paper, contact lenses, frames, perks from optical dealers, such as free frames, and work time via talking on their cell phones, texting and surfing the Internet.

"It's [stealing] rampant," he says.

Gary Gerber, O.D., founder of Power Practice, a Franklin Lakes, NJ optometric consulting firm, says theft may be more prevalent now due to the down economy.

Regardless, stealing doesn't discriminate. In other words, everyone, despite their appearance, place of address, financial background and personality, has the potential to steal. As an example, Dr. Kattouf says he discovered that a pleasant, churchgoing woman embezzled more than $100,000 through a three-year period from a southwest optometric practice.

So, how can you prevent your employees from stealing from you? By following these 10 tips provided by optometric professionals who've had experience in dealing with theft.

1 Conduct a background and credit check

"The hiring process is a good place to start," says Dr. Gerber.

Although it's inappropriate (and ineffective) to ask a potential employee whether he thinks he may steal, you can conduct a background and credit check to assess the likelihood of the candidate committing theft, he says.

"Someone who owes money to a lot of people might be in a situation in which they would steal," Dr. Gerber says.

2 Define "stealing"

Don't assume your employees share your definition of "stealing," says Donna Suter, who has worked with several optometric practices as president of Suter Consulting Group, in Chattanooga, Tenn. For instance, optical product companies often offer perks, such as a free pair of frames, to physicians for selling their products. If you haven't communicated to your optician, among other employees, that these perks are for you, despite the fact that your employee or employees have dispensed them, the employee may think they are for him, or be tempted to take these perks for himself.

Dr. Kattouf suggests you explain to your employees that talking on their cell phones, texting and surfing the Internet for non-work related reasons during working hours, as opposed to a lunch break, is work-time theft. In fact, he suggests you ban employee cell phones from your practice, and explain that practice phones aren't for personal use, unless an emergency — which you must define clearly — occurs.

"Let your employees know that their family member can call the office in an emergency, so the employee knows a lifeline to the outside world exists," he says.

3 Install blocking software

The lure of the Internet is strong. As a result, you may want to consider installing website-blocking software.

"The problem of employees embezzling time while on the Internet for personal use is universal," says Dr. Kattouf. "Companies provide a ‘blocking system’ that prevents employees from [accessing] any Internet service not related to work…"

You may also want to chew over installing practice programblocking software, he adds. If one or more employees have access to your practice's financial records, for example, they likely have the ability to alter this information.

4 Require receipts for everything

Ms. Suter recommends you use a purchase order system, and require all employees provide you with receipts, whether the transaction is a patient payment, a shipment or purchase from a frame or contact lens supplier or representative or a bank deposit. Having purchase orders and receipts for all transactions provides a clear paper trail, she says.

5 Never use a signature stamp

Always sign bills yourself, says Dr. Gerber.

"Leaving a signature stamp lying around the office is like handing over your checkbook to the thief, with all the blank checks signed," he says.

6 Open all practice mail

In several cases, an employee's salary is $8 to $10 an hour. When that employee sees that you, the doctor, receive checks for $3,000 or $12,000, the employee thinks that pocketing $20 from these checks won't make a difference, explains Dr. Gerber. What this employee fails to realize, however, is that $20 a week multiplied by 52 weeks through a three-year period, for example, amounts to roughly $3,000 — quite a chunk of change.

In addition, opening all practice mail enables you to dissuade employees from asking for or receiving product from a frame, ophthalmic lens or contact lens company for their personal use.

"The doctor knows employees are asking for and receiving product from a frame company or wholesale spectacle lenses vendor when the doctor asks the company representative for a favor, and there is hesitation," says Ms. Suter.

For example, a loyal patient's dog eats their new eyewear. This isn't covered under normal wear-and-tear, she says. The doctor calls and asks the frame and spectacle lenses provider to comp the patient a new frame and lenses. The goodwill for the practice in this unusual situation is priceless.

"But the representative may reply that he/she has already gone out of their way to help the doctor, but the doctor is clueless as to how," Ms. Suter explains. "The reason the doctor is often clueless is because one or more of his/her employees have been enjoying perks without informing the doctor."

7 Don't allow the deposit preparer to make the deposit

Dr. Gerber says he consulted at a practice in which he discovered that the employee who made the practice's deposits was changing the deposit slip amount and pocketing the rest. The only record of the deposit was the bank's receipt. As a result, don't let the same employee who prepares the deposit make the deposit, he says. Have the same rule for paying bills, Ms. Suter adds.

8 Check profit/loss statements

Don't just look at the total cost; scrutinize the details, says Dr. Gerber. He says he worked with a practice from which the bookkeeper was stealing each month because the owner didn't examine the details on the credit card payment, only the total. Apparently, the bookkeeper had opened a personal credit card with the same company the practice owner used and added the bill to the practice's bill each month.

"If the doctor's real bill was something like, $2011.19, imagine the thief throws in his or her statement for $345?" says Dr. Gerber. "Next month, the doctor sees, on his statement, that his bill was paid in full. He'd have to remember that the check amount ($2,356.19) was higher than the amount of his bill."

Dr. Kattouf adds that if your cost of goods is out of whack from one month to the next or you have a lot of [patient] volume, but a low net profit, these are red flags that theft may be occurring.

"Ask yourself: ‘how many patients did we see and for what?’" Ms. Suter says. "Then ask yourself: ‘Do the deposits make sense?’"

If they don't, one or more thieves are likely among your staff, she says.

"You want to double-check the amounts of invoices, and let your employees see you checking things over," says Dr. Gerber.

Dr. Kattouf agrees.

"If your staff knows you're checking on them, they'll behave. I like to use the example of a state patrolman. When the speed limit on the interstate is 65 miles an hour, but no state police cruisers are around, cars will go as fast as 80 miles an hour," he says. "But, when a state police cruiser is on the shoulder of one of these interstates or traveling with traffic, cars will obey the speed limit because the officer serves as the check and balance. You need to act as the state trooper in your practice."

9 Interact with your employees

A doctor who interacts with their employees is more likely to tell whether one or more of them is ripping off the practice, says Ms. Suter.

"The doctor will know in her gut," she says.

Keep an especially watchful eye on the employee who doesn't vacation when you vacation, always works when you're out of the office and/or volunteers to oversee the practice when your other employees desire the day off, she adds.

"If you hire outside help to do an internal audit and that employee [the one described above] quits, this is a sure sign he or she is stealing from you," Ms. Suter says.

Dr. Kattouf advises you establish a rule that employees cannot present to the practice early or stay late, as he says these are breeding times for deceit.

10 Make random inspections

Once a month, randomly check your office supplies and optical stock, those interviewed say. Does it seem like a lot of extra printer toner has been used? Open the boxes that contain frames and contact lenses. Count them. The same number should be in the boxes as last month, minus the amount sold this month, for which you have receipts.

" … Anything physical in the office can be stolen. Business supplies are a big one. You don't need to check every bill and invoice, but someone needs to know you're lurking," says Dr. Gerber. "The same is true of the day-to-day deposits. One of the best defenses you have is being random.

Dr. Kattouf suggests you leave an unusual amount of money, such as an extra $23, in your cash register or drawer to determine the integrity of the employee.

"If that person or someone else doesn't bring you the $23 at the end of the day when the staff balances the cash register or drawer, you know there's a thief in your midst," he says.

"Theft happens because practice owners over-delegate. They trust too much without having proper checks and balances… . Given the opportunity, a large percentage of people will steal," says Dr. Kattouf. "The ones with the guts will do it. It's not necessarily going to be $200,000 or $300,000, but small amounts add up. Unfortunately, you can't stop 100% of it, but you can stop 95% by having your pulse on your practice and paying attention to details." OM

Mr. Mancinelli is a freelance writer based in the Philadelphia area.

Optometric Management, Issue: June 2010