Today's Veterinary Business

OCT 2018

Today’s Veterinary Business provides information and resources designed to help veterinarians and office management improve the financial performance of their practices, allowing them to increase the level of patient care and client service.

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53 October/November 2018 • TODAYSVETERINARYBUSINESS.COM Whenever I or one of my firm's consultants assist a veterinary hospi- tal, we perform a minor audit of the practice's end-of-day procedures to look for signs of impropriety. I recently consulted with an equine practice. Big concerns surfaced because the practice was not reconciling its cash to the end- of-day reports. In fact, the practice was not accounting for the cash at all. The owner had no idea what was going on and thought the accountant was overseeing the in- ternal controls. When I spoke to the accountant, he was unaware that the controls were his responsibility. The practice is under a full- blown audit now, and I have no doubt the owner is going to find that a substantial amount of money has been embezzled. Just like everything else in life, we always feel that this type of thing will never happen to us, but unfortunately it does. Let's review basic things that need to happen in your practice to hopefully prevent embezzlement. End-of-Day Procedures The following steps should be stan- dard in every hospital. I suggest they be done at the actual end of the day, not in the morning or afternoon but instead after the last transaction. At 24-hour practices, choose a specific time of the evening. Deposit Reports The first step is to print the deposit report from your practice management software. This is the report that will give you the total amount of cash, checks, credit card charges and any other payments you received that day. Cash Drawer Justification The second step is to do a cash drawer justification. Your drawer should have an established base amount — let's say $100. At day's end, your receptionist should count out $100 and leave it in the drawer. The person then should take the remaining cash and checks and total them. This cash justifi - cation needs to be done to the penny, and the $100 base should not fluctuate. The cash and checks taken out of the drawer should match the deposit report. If anything is off, the receptionist will have to find out why and hopefully fix the dis- crepancy. If the receptionist cannot determine the reason, the deposit will be made as either an overage or shortage. Next, the receptionist will print the credit card transaction jour- nal from the credit card machine. Any other payments, such as Care Credit, also must be documented. All the amounts should equal what is shown on the depos- it report. If they don't agree, the receptionist needs to reconcile the numbers and either fix the discrepancy or note why the amounts are off. Once everything is compiled, a bank depos- it needs to be made. The deposit will consist of the cash and checks. The bank receipt will be attached to the deposit report along with the credit card transaction journal. This package of information is then placed on the owner's desk. The practice owner is responsible for verifying that all the numbers are correct. Once done, the owner will initial the report and file it. This final step should not be The latest statistics indicate that 1 in 10 veterinary hospitals loses at least $10,000 to embezzlement in a given year. Have you taken precautions so you don't become a victim, too? By Mark Opperman, CVPM Leadership PRACTICE SMARTER delegated to the practice manager or anyone else. The more employ- ees involved in the process, the better. The person doing the end- of-day count should not be the same person who makes the bank deposit or records the information in your accounting system. Other Checks and Balances In addition to the end-of-day procedures, several reports need to be printed and reviewed by the practice manager and owner. Different soft- ware programs have dif- ferent names for these reports, but one of the most important is called the itemized audit trail or transaction report. This report will break down all trans- actions that occurred in the computer, both positive and negative, throughout the day. The report will show any refunds, adjustments or credits as well as payments made. Let me give an example of why this is so important. Let's say a receptionist named Susan is embezzling from you. This morn- ing, an examination, distemper vaccination, rabies shot, and fecal 1 2 An inside job Preventing embezzlement, or at least lowering the risk, starts with the practice owner and entails strict adherence to policies and procedures. The person doing the end-of-day count should not be the same person who makes the bank deposit or records the information in your accounting system.

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