What if $57,000 went missing from your practice? We are talking $57,000 that would have gone straight to your pocket, your family or back into your business. That’s what was discovered recently by a chiropractic office in Washington. This situation is unfortunate but it also could have easily been avoided with some simple financial controls and I will tell you how.
Before I get into the how, let me discuss why these situations happen to small businesses, chiropractors being part of that group. In the case of the practice that was robbed of $57,000, they were robbed by one of their own employees who had taken on the role of bookkeeper over time.
It’s natural to have someone take this over in time. The problem is that, if you are a chiropractor, then you probably didn’t give this situation enough consideration for how to do this right.
Abdication vs. Delegation
Most of the time when a chiropractor “delegates” the bookkeeping role, they are really just abdicating the role to someone else. This could be an outside bookkeeping professional or a person on their team who is in charge. When they abdicate, they give the responsibility to the person and then don’t do anything with it. They just want it done. They don’t check in. Give expectations or anything else. Chiros just say, “do my books so I can worry about seeing patients.”
How To Handle Your Financials Right
How could the Washington practice avoided being ripped off? It’s simple. Financial Controls. In this case, two things come to mind. First, know your software that you use and how it works. I am amazed at how many chiropractors don’t know how Quickbooks and their practice software works. I don’t care if your not tech savvy. Learn it.
Second, review your financials at least once/month and have a meeting with your bookkeeper to discuss what you are seeing in the report. Also, work with an accounting firm that can give you a second opinion about what they are seeing periodically as well. In the Washington chiropractors case, money was stolen over a four year period. Four years! You can only steal from someone when they don’t have their attention on what you are doing.
How To Handle Your Financials Right Part 2
Who are you going to hire to do your books? Are they licensed? Do they have references? In the case of having an employee do it, I would recommend getting two things done to assess their worthiness to do your books. The first thing to get is a background check. Does this person have a record? Second is to get a credit report. I worked in financials services for years and one rule before people got hired is they had to have great credit. Why? Desperate people steal. They have bills that are due and their backs are against the wall so they steal from you.
A lot of people that I work with don’t want to focus on the numbers too much. I respect that but I also know that a businesses’ primary objective is to make a profit. When your business is not profitable then you can’t create value for patients and provide a place for employment for people. Money is important even if it’s not your ultimate.
Do you have financial controls in place for your business? What’s your plan? Is the biggest publicity your practice gets going to come from a situation where an employee robs from you? What does that say to your patients about your business and how careful you are with information? How much more likely are you to get robbed if you have your act together? Get some financial controls in place and make news based on the awesome, life giving care that you give your patients.
Do you know how to read your financials?
I have tools for that. If you are a chiropractor and you aren’t working with me, fill out this assessment and we can set up a time to talk about your business finances and take your practice to the next step.