At this point, hopefully, you are the point at which you’ve set up the 4 part process for controlling collections and done your deposit reconciliation. You’re going through the information and you notice a discrepancy. On one particular deposit day, your practice management software shows a deposit of $3,500, but the corresponding amount on your bank statement shows $3,000. What happened?
Here’s a process you can go through to get to the bottom of the problem. Before continuing, I will state that I am not a certified fraud examiner or other licensed agent, but I have seen quite a number of these situations to know how find out what happens. You may decide that your problem is severe enough to warrant bringing in an outside expert, but for the others, here are some things you can do before bringing in someone else and incurring some additional cost.
We all know someone who can’t find his or her car keys and then swiftly conclude that the keys were stolen and that the car is probably about to start screeching out of the driveway on the way to a chop shop. Don’t be that person. When you see a problem, you want to rationally go through the process of finding out what is wrong without jumping to any conclusions – rational or irrational.
Drill down to the source of the problem
Quiz from the University of Obvious. Which problem is easier to solve?
“Deposits for the 3rd quarter of 2013 are out of balance” OR
“ The deposit on August 15th is out of balance by $175”
Clearly, in the second sentence, we have a much narrower set of data to analyze. That’s why if your monthly deposit reconciliation produces a discrepancy, you want to know exactly which deposits created that discrepancy. Then, you have to deal with a relatively small bit of information to dig through to find the problem.
Once you’ve drilled down, gather as much detail as possible
For the deposits that don’t look right, get the patient name, date of payment, payment type (cash, check, whatever else) from your patient accounting system. From the bank, break down the deposit by cash and checks. Most banks I see will give you the cash total and images of all the checks included in a deposit. You don’t necessarily need to print everything out, but it may make things easier for the next step.
Check off each item that matches
If you have a check from patient Mary Smith for $200 in your practice management software report and see a check in the bank for the same amount, check them both off. When you are done with this process, the unchecked items represent the discrepancy. At this point, some questions arise. First, this seems like a lot of legwork. Do I have to do all of this? The simple answer is yes because it will get you most accurately to the source of the problem. You can do some things to make the process easier. For example, if the difference is $400, you can probably eliminate all payments in excess of that amount when searching for it. If the difference is equal to one payment, say $79 for instance, you can begin your search for amounts just related to that.
Second question: can’t we automate this process? Answer: A lot can be automated, but the cost and time involved in setting up automation for this process probably isn’t worth it. If you have the problem narrowed down, you should only need some minutes to find the problem. If you discrepancies everything month, it is probably time to change or tighten up your processes.
Take appropriate action
If a check is missing, it may have simply been lost. Mistakes are made during entry. People transpose numbers (remember the rule of 9). Stuff happens. Try to make sure that those are one of the possible causes.
If you see cash as your discrepancy, be wary. Again, things get misplaced. The office manager may have taken some dollars to put in your petty cash box. The explanation may be perfectly innocent. Or it may not be. If you have one person assigned to handling cash, a firm policy on it and a lockbox in which to place cash until the end of the day, you know who to talk to and which possible scenarios to eliminate. If the errors are small, you may decide to continue to monitor. You may decide to wait to see more than one problem. In any event, if you eliminate all other possibilities and conclude that theft has occurred, take swift, forceful action. Termination, a claim on your employee dishonesty coverage and legal action may all be applicable. Whatever happens, if someone is taking cash, you need to send a clear message to your entire staff that this absolutely will not be tolerated. You need to make that decision according to what you see and how you want to run the practice.
As always, we’re available and happy to discuss the matter with you either in general or a specific case. Click here to contact us.
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