Control Your Practice’s Money with the “One Neck to Choke” Principle

OS11076According to the Small Business Administration, 1 out of 9 small businesses experience some sort of internal theft – from small amounts of petty cash to major embezzlement.

Without specific checks and balances in place in your practice, it may be very tempting for the employees you trust the most to help themselves to your checks and cash. (Or for you to blame them for inadvertent accounting irregularities.)

So, how do you keep honest people honest? How do you ensure that all of your money is handled responsibly?

You need to employ the “One Neck to Choke” principle by segregating accounting duties within your practice and creating three audit points for tracking your money. Here’s how to do it.

Assign three people to three separate tasks:

1. One person to open the mail and make a log of the checks that arrived each day.
2. One person to deposit the checks.
3. One person to ensure the log of checks matches the deposit slip.

Inform your employees that this new internal process is in place.

If your practice is too small to assign three people, then one person can handle steps 1 and 2, while the second person is responsible for step 3. One person should never handle all three steps, even if it’s the practice owner.

Ultimately, this new system will promote trust in your organization. Your employees will realize that this segregation of duties will protect you as well as them. Instead of all of the “money” responsibility falling onto one person’s shoulders, you’ll be in it together, working as a strong team.

Want to learn more? Sign up for BMS Bootcamp Webinar #2: How to Protect Your Practice from Itself on Thursday, February 28th at 9:00 a.m. PST. This FREE 30-minute webinar and 15-minute follow-up Q & A session will be packed with insightful practice management information to protect your business, patients, and employees.

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