Protect Your Practice: Embezzlement Prevention with Prosperident CEO David Harris

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Welcome to the Hey Docs podcast with your host, Jill Allen.
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Today I am welcoming back David Harris, CEO of Prosperident
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and someone who always brings a unique perspective to the
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financial side of practice ownership. David has spent decades investigating
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embezzlement in dental and orthodontic practices, which means he's firsthand
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seen where systems break down and how seemingly small gaps
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in oversight can create much bigger problems. Today, we're diving
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into hiring, financial oversight, selective reporting, and how clearly articulating
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responsibilities can create stronger safeguards before a problem ever begins.
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So let's take a look.
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And now a word from the sponsors who make this
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podcast possible. Want a cleaner workflow for orthodontic cases? Meet
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Forward slash clarity.
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Again, that is go.solventum.com forward slash clarity to learn more.
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As a consultant, I work with orthodontic practices every day.
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And Grayfinch is the platform I recommend without hesitation. It's
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the only all-in-one practice software built from the ground up,
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not pieced together like the legacy systems. And now, with
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AI built natively into the platform, it's streamlining the workflows
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your team already relies on while opening up entirely new
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ways to work faster and more efficiently than ever.
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Ready to see it for yourself?
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Head to grayfinch.com forward slash Jill Allen for a special
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discount exclusively for my listeners. David, I am so excited
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to have you back on Hey Docs. Thanks for being here.
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Again with me.
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It is always fun to hang out with you, Jill.
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So in the event that somebody has not caught one
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of our other episodes together, would you mind giving us
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a quick refresher on your background, who you are, and
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what your company does for our industry? Absolutely.
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Somebody once described me as dentistry's crime fighter.
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I believe that.
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My job is really to help dentists protect themselves against embezzlement.
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And sometimes that means that they have concerns that one
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of their staff is stealing from them now. And sometimes
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they don't have that concern, but they know it's an
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issue overall and they want to put the controls in
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place to protect them. So my company, which is called Prosperident,
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does both of those things.
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Yeah, yeah, that's great.
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And we are so thankful to have you out there
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fighting crime on our behalf, because I know you have
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helped a lot of doctors, unfortunately, who have found themselves
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in some really sticky situations. And it's just good to
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know that we've got an extra pair of eyes out
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there helping us.
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Jill, it's going to hit 70% of the dental profession
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sooner or later. And I'm privileged to have the role
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I do in helping protect the profession.
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Yeah, yeah, for sure, for sure. So I thought today's
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episode would be really great. And we're going to talk
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about hiring a little bit. And I feel like so
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many doctors, and I know you and I have been
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in this industry for quite a while now, but I
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feel like, gosh, we are just in this perpetual cycle,
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I feel like, where offices gone are the days where
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we hire that one employee and they stay for 20 years.
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I think on my side, I'm seeing we're lucky if
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we get two to three years out of an employee anymore.
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And so I think when we think about that, and
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you and I could both know that not always a
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long-term employee is the best employee either, but But we
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have to have some safeguards in place and we really
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have to be thinking about doing things a little bit
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differently when we think about such turnover in our practices
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and the amount of people that are coming in and
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potentially leaving. And so I want to focus this episode
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on just that. And I'm wondering if you can talk
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to us a little bit about what we should be
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thinking about before a team member actually joins our team
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and what we should be doing kind of in a
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pre-employment screening to reduce our risk and just some warning
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signs that we need to be paying attention to. Absolutely.
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And let's acknowledge, what you just said, it's a jungle
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out there. And part of it is that the longevity
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of employees that I think most doctors once counted on
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probably isn't there anymore. Definitely. Also, it's really hard to
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find good people.
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Yeah.
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Yeah.
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And almost every dentist I talked to says, you know,
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where have they gone?
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Yeah.
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It's not just front desk either. It's hygiene. It's assisting. It's,
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it's everything. The perception is that there's a shortage of
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qualified people, and that sometimes induces dentists to take a
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shortcut when they hire. The third thing is, let's also
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acknowledge that while most of the people who work in
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dental offices are good people who are there for the
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right reasons, there are enough bad people that, especially with
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turnover that you mentioned, the chances are really good that
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sooner or later you're going to run into one. I'll
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give you one number that everybody in the audience needs
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to hear. 70 million Americans. So that is about one
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in four adults has a criminal record. Whoa.
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That's something to sit on.
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Exactly the response I thought I'd get from you. Now,
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let's be clear that not every one of those criminal
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records make those people unhirable. You know, if I'm 45
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years old and I got busted in college for marijuana possession,
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23 years ago. And that's my only transgression. I can't
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speak for the rest of the world, but I'd look
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past that fairly quick. Right. On the other hand, check
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fraud two years ago should be an absolute showstopper.
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Yeah.
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Yeah. As should child molestation and a whole bunch of
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other awful things that we can think about.
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Yeah.
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So as an employer, you have to know what you're getting.
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And That involves pre-employment screening, which you know this, most
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dentists do a terrible job of.
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Yeah.
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And let's understand why. Again, the hiring process is challenging.
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You don't have as many applicants as you like. You
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have a set of requirements. You're trying to find somebody
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who has the technical skills for whatever position you're hiring
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them for. And also will get along with your team,
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maybe have some emotional intelligence. There are a lot of
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balls that you're juggling at once.
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Yes.
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And what I'm about to do is ask the audience to, okay,
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let's layer one more thing on there. Which is that
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you have to ask yourself what they're not telling you. Yeah.
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And whether what they are telling you is totally the truth.
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And it may not be. Yeah. And for most dentists,
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that's challenging. So let's break it down in a way
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that people can operationalize it. Yeah, perfect. Let's start with
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the process of where you go out and look for applicants.
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And the thing I always tell dentists is be overt
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about what you're going to be screening for. In other words,
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assuming you're going to do a criminal records check when
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you posted an ad somewhere, tell people that. Assuming you're
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doing drug testing, and I'm sure we'll have more to
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say about that in a minute. List that in your ad,
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you know, what You and I remember the days, I think,
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when the way you found people was to take out
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a classified ad in the newspaper.
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Yes.
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Remember that?
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I absolutely do. Yes, absolutely.
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And one of the things about classified ads was that
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they charged you by the word. So we all got
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into the mindset of very terse employment ads. Now people
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are posting on Indeed or some other online site, and
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they absolutely do not care how long your ad is. Yep.
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It really doesn't matter to them. So we're not stuck
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with that dental assistant needed immediately apply here, end of that. Right.
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We just don't have to do that anymore.
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Yes, we get to write really nice paragraphs, totally outlining
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the person, our ideal candidate.
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Exactly. And all I want to do is make sure
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that that depiction of the ideal candidate includes the things
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we're looking for. You know, the ideal candidate will pass
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a drug test and a criminal records check and whatever else.
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And what we're trying to accomplish by this, Jill, is
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that we want unsuitable applicants to weed themselves out. Yep.
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Yep. Self-select right out of this process. Don't even send
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us your ad. Don't even send us your applicant.
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The worst outcome here is you invest a lot of
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time in somebody you think is going to be great.
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And then you say to them, you're exactly what we
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want for this position. We just need to do the
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criminal records check. And the applicant says, maybe this isn't
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going to work out after all. Yep.
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Yeah.
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And that's after you've done three interviews with them and
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you've started to think about how they'll fit into your
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program of what you want to do. And now all
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of a sudden there's this realization that they're actually not suitable.
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So let's be upfront about what we're going to do.
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So what are we going to do? Well, proper pre-employment
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screening starts with checking identification. And my standard is very simple.
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This should be done at the interview stage. So you're
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interviewing somebody for a job and you say to them, Jill,
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we just need to do an identity check. Can you
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please give me your driver's license and two pieces of
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secondary ID? The secondary can be anything, credit cards, gym membership,
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student card, library card. just stuff with your name on it.
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But I want to do that in the interview. Some
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people don't have a driver's license. Okay, fine. They have
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typically some other state issued ID, but I want one
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picture ID and two other pieces of identification. One of
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the easiest ways to defeat background checking is to pretend
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to be somebody else.
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Yeah, sure.
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And if, if I have baggage and I don't want
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you to know about it, but I have a, sibling
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who's a year older than me, who's clean, really easy.
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I just apply for the job that's done. Yeah. And
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if you don't do photo ID checks and a few
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other things that we're going to talk about, I get
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away with it. And you hire somebody with baggage and
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you don't know it. So let's start there. And part
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of what we're trying to do is catch the applicant unprepared.
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If I am taking my brother's identification, I probably won't
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expect to be ID'd in the interview and I may
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not have the forged ID that I'm going to need
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for that. Even if I have a fake driver's license,
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I'm probably not going to go to the trouble and
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the expense of getting the secondary stuff like the library card,
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the gym membership.
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Right, right.
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So I still get caught. And picture that conversation I'm
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having with you when I asked for the ID and
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you say, I didn't bring it. Okay, so Jill, you
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told me where you live. It's 10 miles away. gee,
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if your car breaks, you don't have a credit card
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to call a tow truck. You don't have your driver's
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license with you. I am really starting to question your
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judgment here. Right, right.
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Yeah, yeah, sure.
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I mean, if somebody doesn't have any of this stuff,
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I just don't know a lot of people who walk
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around with completely empty wallets right now. Right, right.
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Or at least not all of that on their phone,
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you know?
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Yeah, exactly. So that's starting to look a little sinky
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to me.
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Yeah.
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So that's the first thing we have to do. Now
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let's talk about after that interview, when you do the
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rest of pre-employment screening. And I stay away from the
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word background check because it means different things to different people.
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When I talk to a lot of people, they're using
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it as a synonym for a criminal records check. And
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I would just rather call a criminal records check exactly that.
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And to me, the whole process I call pre-employment screening.
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So that criminal records check is probably next on our list.
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And As I mentioned, you have 70 million Americans of
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criminal records, not all of which should probably be disqualifying,
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but let's find out what somebody has and then make
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that decision.
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Sure.
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Yeah. The question I get asked a lot is, how
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do you do a criminal record check?
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Yeah, I would like to know that.
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I think a lot of dentists think that there's some
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website they can go on and pay $ 20 and get
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an accurate picture of what somebody's criminal history is. That
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doesn't exist. The other thing that your audience needs to
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know is there's something called the Fair Credit Reporting Act,
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or FCRA. And FCRA requires information used in the hiring
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process to meet certain standards. And there are websites out
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there that will give a semi-accurate criminal record sometimes. But
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when you log into that website, the first thing they
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tell you is we are not FCRA compliant and you
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cannot use our information in a hiring process. Oh, interesting.
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Interesting.
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So if you go and find one of these websites,
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it definitely cannot be used for this purpose. You know,
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if you want to check up on your neighbors and
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see what their criminal history is, it's fine for that.
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But you can't use it for employment or decisions about
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whether to take somebody on as a tenant and things
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like that. Right, right.
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So what do you do? This seems like a conundrum.
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It isn't at all. What you have to do is
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go to somebody who's in that business. Okay.
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Okay.
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And there are lots and lots of pre-employment screening companies
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out there, including some that concentrate on dentistry. And find
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one of those companies that usually cost about $ 150. A
269
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couple of things I'll mention. The first thing is that
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criminal record checking is really challenging because the criminal record
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could exist in a lot of places. So in some states,
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the state government maintains a consolidated criminal history. In other states,
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it's done by county. Texas is an example. And you
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probably know this, but Texas has about 220 counties. Yeah, yeah.
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So there are a lot of places to look. And
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that's why you need to hire a professional because they
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have access to the multiple databases and they can produce
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a consolidated, accurate record for you. And if somebody does
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have a criminal record, they can help you evaluate it
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and decide whether it's really going to be an employment
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factor or not. Right, right. Yeah.
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Oh, that's interesting. And I'm going to assume you guys
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help with that.
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We do not.
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Oh, you don't. Oh, my assumption is wrong.
286
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We don't. It's a heavily regulated, very mechanical process, and
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it just doesn't really fit with our business model.
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Sure, sure.
289
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So we do not, but we certainly know people who
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do good work in that area. Yeah.
291
00:15:53.720 --> 00:15:55.220
So if somebody were going to try and get out
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there and find these, is there something specific that they're
293
00:15:58.200 --> 00:16:00.000
looking for in that company?
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Some dental understanding is not a bad idea, but it's
295
00:16:03.399 --> 00:16:07.080
not essential. I mean, as long as somebody will kind
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of help you interpret the results.
297
00:16:10.000 --> 00:16:10.399
Perfect.
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00:16:10.639 --> 00:16:14.049
Because the way this stuff comes back from the registries
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00:16:14.070 --> 00:16:16.429
that keep the information is sometimes a little bit cryptic.
300
00:16:17.730 --> 00:16:20.809
And you really want somebody who will help you interpret
301
00:16:20.830 --> 00:16:23.899
it and say, you know, for a hygienist, this person
302
00:16:23.940 --> 00:16:27.259
had a DUI 20 years ago. They've had nothing since.
303
00:16:27.320 --> 00:16:30.539
I don't see a lot of risk to you. That's
304
00:16:30.580 --> 00:16:35.389
valuable information. Yes. Yeah, absolutely. But you can't do it yourself.
305
00:16:35.429 --> 00:16:38.649
You can't do it online. I certainly would never discourage
306
00:16:39.350 --> 00:16:42.649
anybody from just doing a plain old Google search for
307
00:16:43.070 --> 00:16:45.990
anybody they're applying online because sometimes you see some interesting
308
00:16:46.049 --> 00:16:51.220
stuff there, but... That's not a substitute for hiring a
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00:16:51.279 --> 00:16:52.889
professional to do this properly for you.
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Yeah. Yeah.
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Well, that's great.
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00:16:54.889 --> 00:16:57.649
Well, that's definitely some good stuff to think about because
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I think I'll go back to background checks. That was
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00:17:00.950 --> 00:17:04.039
kind of our entry word into this because that was
315
00:17:04.099 --> 00:17:08.200
not something we did 20 years ago, even probably 15
316
00:17:08.200 --> 00:17:11.180
years ago. Yes, you understand that in bigger companies, but
317
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we didn't. we weren't really seeing that. We were doing
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00:17:13.930 --> 00:17:18.559
employment verification checks or whatnot. So it's so interesting how
319
00:17:18.680 --> 00:17:22.539
things have changed. And I do remember when this started
320
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popping up, I don't know, eight years ago, 10 years ago,
321
00:17:25.730 --> 00:17:28.809
and it was, oh, just go online and find a
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00:17:28.869 --> 00:17:32.250
company and pay your 25 bucks and you'll get what
323
00:17:32.269 --> 00:17:36.769
you need. And so it's interesting how things continue to
324
00:17:36.849 --> 00:17:40.380
change and really do your due diligence when you're looking
325
00:17:40.460 --> 00:17:42.819
into that right person that's going to be your next
326
00:17:42.859 --> 00:17:44.839
hire into your practice.
327
00:17:44.900 --> 00:17:48.240
I'm going to paraphrase slightly what you just said, which
328
00:17:48.339 --> 00:17:51.289
is that dentistry allowed itself to get out of step
329
00:17:51.329 --> 00:17:56.730
with how the rest of America hired. Yes. And you
330
00:17:56.769 --> 00:17:59.170
and I in this conversation are bringing it back. So
331
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let me pick up on something you just said a
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00:18:01.569 --> 00:18:05.519
minute ago about verifying employment. And that's an important part too,
333
00:18:05.619 --> 00:18:09.200
and something that often isn't done well. So want to
334
00:18:09.220 --> 00:18:09.759
talk about that?
335
00:18:10.619 --> 00:18:11.599
Yeah, let's do.
336
00:18:11.660 --> 00:18:13.400
I'd love that because I think there's a lot of
337
00:18:13.460 --> 00:18:16.509
gray area in that one little thought.
338
00:18:17.680 --> 00:18:19.710
Well, let me start like I did last time by
339
00:18:19.769 --> 00:18:23.150
setting my standard. And my standard is very simple. You
340
00:18:23.190 --> 00:18:26.569
should talk to everybody this person has worked for, for
341
00:18:26.609 --> 00:18:27.829
at least the past five years.
342
00:18:28.529 --> 00:18:28.829
Okay.
343
00:18:29.650 --> 00:18:32.119
Now, There are some rules. And the first pro tip
344
00:18:32.160 --> 00:18:35.019
I'm going to give the audience is do not ever
345
00:18:35.799 --> 00:18:40.839
call any phone number provided to you by an applicant. Okay.
346
00:18:40.980 --> 00:18:43.890
If somebody says they work for Dr. Mark Smith in
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00:18:43.930 --> 00:18:48.470
Petticoat Junction, go online, find the phone number for Dr.
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00:18:48.549 --> 00:18:52.450
Smith's office and call that number. What has hung up
349
00:18:52.490 --> 00:18:55.990
a few dentists who had good intentions was the applicant said,
350
00:18:56.259 --> 00:18:58.220
here's Dr. Smith's cell number. Just call that.
351
00:18:59.240 --> 00:18:59.579
Yes.
352
00:18:59.940 --> 00:19:00.220
Yeah.
353
00:19:00.359 --> 00:19:02.799
And they call that cell number and without realizing it,
354
00:19:02.819 --> 00:19:05.980
they're actually speaking to the applicant's uncle pretending to be Dr.
355
00:19:06.039 --> 00:19:09.380
Smith who gives a good review. Don't do it. Find
356
00:19:09.400 --> 00:19:12.539
the number independently. Google is really cheap to use.
357
00:19:13.299 --> 00:19:13.599
Yeah.
358
00:19:14.140 --> 00:19:19.730
You won't get a bill from Google for searching. Once
359
00:19:19.769 --> 00:19:22.430
you get Dr. Smith on the phone, let's talk about
360
00:19:22.470 --> 00:19:25.670
what should happen next. And the first thing I want
361
00:19:25.730 --> 00:19:28.150
to do as a prospective employer is I want to
362
00:19:28.210 --> 00:19:32.960
confirm exact dates of employment. And the audience should not
363
00:19:33.019 --> 00:19:35.440
make the mistake I see a lot of people make,
364
00:19:35.539 --> 00:19:40.940
which is to prompt the former employer and ask for confirmation. Yeah.
365
00:19:41.720 --> 00:19:44.170
All humans have a lazy streak. And if somebody presents
366
00:19:44.230 --> 00:19:47.309
employment dates to me and they sound about right, I'm
367
00:19:47.329 --> 00:19:50.700
just going to agree with them. Much better. idea to
368
00:19:50.920 --> 00:19:53.599
ask Dr. Smith, what was this person's first day with
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00:19:53.619 --> 00:19:56.549
you and what was their last day? And send them
370
00:19:56.569 --> 00:19:59.569
back to the personnel file because thieves who are trying
371
00:19:59.589 --> 00:20:04.029
to hide things will play games with employment dates. And
372
00:20:04.069 --> 00:20:07.549
that's how we catch it. Yeah. On the confirmation subject,
373
00:20:07.869 --> 00:20:10.630
the other question I want to ask former employers is,
374
00:20:11.329 --> 00:20:13.430
what was their job title? Oh, that's a good one.
375
00:20:13.559 --> 00:20:16.019
Or if they had multiple job titles, what was their
376
00:20:16.059 --> 00:20:19.579
last one? Because a lot of applicants will give themselves
377
00:20:19.619 --> 00:20:23.200
that upgrade to first class. Mm-hmm. And what I mean
378
00:20:23.240 --> 00:20:26.019
by that is, you worked in your last office as
379
00:20:26.099 --> 00:20:30.279
treatment coordinator, and you're applying for an office manager position. Mm-hmm.
380
00:20:30.970 --> 00:20:32.869
It is the easiest thing in the world just to
381
00:20:32.930 --> 00:20:35.390
claim that you were the office manager of the last office.
382
00:20:35.430 --> 00:20:38.589
And if Dr. Smith and I don't cover this in
383
00:20:38.670 --> 00:20:41.869
our conversation, or if a conversation never happens, which is
384
00:20:42.170 --> 00:20:44.650
often the case as well, then I get away with
385
00:20:44.710 --> 00:20:47.250
it and I get an office manager job that I'm
386
00:20:47.289 --> 00:20:48.349
really not qualified for.
387
00:20:49.049 --> 00:20:50.009
Yeah, yeah.
388
00:20:50.109 --> 00:20:52.880
And that may take months to come out. And finally,
389
00:20:52.950 --> 00:20:56.140
the doctor realizes you're really good at booking treatment, but
390
00:20:56.420 --> 00:20:58.779
you have no clue how to handle receivables or any
391
00:20:58.799 --> 00:21:00.640
of the other things that we want an office manager
392
00:21:01.000 --> 00:21:04.759
do here. Right, right. So ask about the title. And
393
00:21:04.920 --> 00:21:08.660
if you catch the applicant in an act of dishonesty there,
394
00:21:09.059 --> 00:21:12.799
there are going to be more. And it's just a
395
00:21:12.819 --> 00:21:13.660
question of what they are.
396
00:21:14.279 --> 00:21:16.859
Yeah, yeah. Well, those are great.
397
00:21:16.940 --> 00:21:18.839
I don't want to get too far down a rabbit
398
00:21:18.880 --> 00:21:20.829
hole here, but I always feel like this is such
399
00:21:20.940 --> 00:21:24.069
a gray area where there's the, what can I ask
400
00:21:24.150 --> 00:21:25.450
and what can I not ask?
401
00:21:25.690 --> 00:21:27.809
Do you mind just giving us a few of those?
402
00:21:28.630 --> 00:21:33.440
Absolutely. You can't ask questions that would open the door
403
00:21:33.519 --> 00:21:38.200
to a discriminatory hiring decision. Yeah. And every state and
404
00:21:38.299 --> 00:21:41.319
federal law as well have grounds on which you cannot discriminate.
405
00:21:41.400 --> 00:21:45.410
So for example, you could not ask Dr. Smith what
406
00:21:45.490 --> 00:21:50.630
religion Jill Allen practices or how many kids she has
407
00:21:50.789 --> 00:21:53.170
or how old she is or what day she was born.
408
00:21:53.529 --> 00:21:56.849
Those are all out of bounds questions. Yep. Other than that,
409
00:21:56.930 --> 00:21:59.990
you can ask anything you want. You can certainly ask if,
410
00:22:00.670 --> 00:22:04.380
Jill quit or was fired, you may not get an answer,
411
00:22:04.430 --> 00:22:08.259
but you're not out of bounds to ask a question. Personally,
412
00:22:08.279 --> 00:22:10.579
I don't ask a whole lot of that kind of
413
00:22:10.640 --> 00:22:14.599
question because I'm expecting to get pushback from the former employer.
414
00:22:15.440 --> 00:22:19.400
The one question we should always, always ask is, is
415
00:22:19.420 --> 00:22:23.339
Jill eligible for rehire at your office? Yep. Yep.
416
00:22:23.420 --> 00:22:24.039
That's a good one.
417
00:22:24.359 --> 00:22:26.200
There are a couple of reasons that's good to ask.
418
00:22:26.279 --> 00:22:29.789
First of all, that's a question that even somewhat skittish
419
00:22:29.829 --> 00:22:35.000
employers will probably answer. Second, anything other than an immediate
420
00:22:35.059 --> 00:22:38.859
yes tells a story. So I asked your former employer
421
00:22:38.920 --> 00:22:41.039
if Jill is eligible for rehire, and there's kind of
422
00:22:41.079 --> 00:22:43.940
a couple of seconds of silence, and I sense that
423
00:22:43.980 --> 00:22:47.839
they're composing their thoughts. That's an answer. That's a really
424
00:22:47.920 --> 00:22:50.059
expressive answer with absolutely no words.
425
00:22:52.700 --> 00:22:53.480
Yeah, for sure.
426
00:22:53.740 --> 00:22:56.470
Got to read that room or read that body language
427
00:22:56.490 --> 00:22:59.460
or read that... What they are not saying.
428
00:22:59.480 --> 00:23:03.920
The intake of breath and silence says a lot there.
429
00:23:04.069 --> 00:23:06.109
And by the way, if you ever want to give
430
00:23:06.140 --> 00:23:09.710
a negative reference for an employee, just turn this around.
431
00:23:11.349 --> 00:23:14.670
You call me about one of my former employees, and
432
00:23:14.890 --> 00:23:16.950
it might be the hygienist who loved to use that
433
00:23:17.170 --> 00:23:20.029
same profi cup for the whole day, or maybe it's
434
00:23:20.069 --> 00:23:21.910
an embezzler. I mean, it doesn't matter what they've done,
435
00:23:21.990 --> 00:23:25.400
but if they're not a good employee, and you ask
436
00:23:25.440 --> 00:23:27.609
me for a job reference, what I'm going to say is,
437
00:23:28.069 --> 00:23:30.609
I'll confirm dates of employment for this person, and I'm
438
00:23:30.650 --> 00:23:33.430
only going to answer one other question. And that question
439
00:23:33.470 --> 00:23:37.359
is if they're eligible to rehire. So you're calling me,
440
00:23:37.660 --> 00:23:40.079
you're going to say, okay, I'll play along with your game.
441
00:23:40.799 --> 00:23:43.000
Would you rehire this person? And I say not in
442
00:23:43.000 --> 00:23:47.829
100 million years. And if after saying that you rehire them,
443
00:23:48.329 --> 00:23:50.289
you've earned whatever bad thing is going to happen to
444
00:23:50.309 --> 00:23:50.670
you next.
445
00:23:50.990 --> 00:23:52.309
Yeah, yeah, yeah.
446
00:23:52.730 --> 00:23:54.609
I think that's a great way to think about it, too,
447
00:23:54.750 --> 00:23:57.920
is as an employer, if you get that question and
448
00:23:58.039 --> 00:24:02.400
or if you're looking to confirm that, there is liability
449
00:24:02.440 --> 00:24:05.799
that eventually falls. If you decide, well, maybe they weren't
450
00:24:05.819 --> 00:24:08.390
a good fit for them, but probably for me, you know,
451
00:24:08.470 --> 00:24:12.849
I'm seeing this great personality. I'm sure it'll be fine. Well,
452
00:24:12.890 --> 00:24:14.990
then you're going to take that on and it will
453
00:24:15.009 --> 00:24:15.670
be what it will be.
454
00:24:15.690 --> 00:24:18.950
Yeah. You know, if I tell you I wouldn't hire
455
00:24:19.009 --> 00:24:21.210
that person if they were the last dental assistant on
456
00:24:21.250 --> 00:24:23.990
the planet and you hire them, you're absolutely right. You've
457
00:24:24.039 --> 00:24:30.099
earned whatever misfortune comes next. And I have seen that happen.
458
00:24:30.619 --> 00:24:30.920
Yeah.
459
00:24:31.259 --> 00:24:33.680
I told a dentist that one of his employees had
460
00:24:33.720 --> 00:24:37.839
stolen a million dollars from another dentist. And the dentist
461
00:24:37.900 --> 00:24:39.579
I told that to did not fire this person.
462
00:24:40.119 --> 00:24:40.700
Oh, my gosh.
463
00:24:41.539 --> 00:24:41.839
Wow.
464
00:24:41.920 --> 00:24:44.140
Sometimes, Jill, you and I just have to step back
465
00:24:44.180 --> 00:24:45.359
and let Darwin do his work.
466
00:24:45.940 --> 00:24:48.509
Yeah, that's crazy. That is really crazy.
467
00:24:49.009 --> 00:24:52.569
So let's talk about, okay, we've made it through this process.
468
00:24:52.809 --> 00:24:58.069
We have hired the right person. We've got them in place.
469
00:24:58.529 --> 00:25:02.930
Let's kind of talk now about just financial oversight and
470
00:25:03.029 --> 00:25:06.170
what it looks like for a practice owner. Where does
471
00:25:06.190 --> 00:25:08.509
the doctor kind of need to stay involved to kind
472
00:25:08.549 --> 00:25:12.210
of be aware of things? Where can they put things
473
00:25:12.289 --> 00:25:14.809
on the back burner and step back? And I'm thinking more,
474
00:25:14.970 --> 00:25:17.809
especially if we've got an employee that has access to
475
00:25:17.869 --> 00:25:19.569
finances within the practice.
476
00:25:20.430 --> 00:25:24.930
Yeah, which includes all front desk and office manager and
477
00:25:24.990 --> 00:25:30.539
bookkeeper and financial coordinator, if that role exists in your practice. Yeah,
478
00:25:30.619 --> 00:25:31.519
it can be a lot of people.
479
00:25:32.140 --> 00:25:32.440
Yes.
480
00:25:32.940 --> 00:25:36.539
The first thing I'll say is this, and this really
481
00:25:36.859 --> 00:25:40.670
basic step gets ignored by a lot of practitioners to
482
00:25:41.349 --> 00:25:46.289
sometimes their peril. Every software tracks how much money it
483
00:25:46.349 --> 00:25:51.099
records that patients have paid. And if you are a
484
00:25:51.160 --> 00:25:55.019
practice owner and you do not compare that number to
485
00:25:55.079 --> 00:26:00.319
what went in your bank, you're asking for trouble. Yep. Okay.
486
00:26:00.359 --> 00:26:02.920
That's simple. Now we can talk about how to do it.
487
00:26:02.960 --> 00:26:05.920
And I think there's probably an easier way than most
488
00:26:05.980 --> 00:26:09.609
practitioners to try to follow faithfully for a while before
489
00:26:09.650 --> 00:26:13.019
they just throw up their hands and give up. But
490
00:26:13.210 --> 00:26:17.380
if that comparison isn't done monthly, your strongest internal control
491
00:26:17.440 --> 00:26:18.059
is called luck.
492
00:26:18.460 --> 00:26:18.759
Yeah.
493
00:26:19.059 --> 00:26:23.099
Yeah. And now a word from the sponsors who make
494
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496
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497
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498
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499
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500
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501
00:26:53.339 --> 00:26:56.400
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502
00:26:56.480 --> 00:27:00.380
favorite part, access to the Smart Start pricing for two
503
00:27:00.480 --> 00:27:03.539
whole years after you open your doors. That gives you
504
00:27:03.599 --> 00:27:07.740
flexibility to add more chairs as your cash flow grows.
505
00:27:08.289 --> 00:27:11.539
It's pretty smart. As an orthodontist, you care about getting
506
00:27:11.890 --> 00:27:15.140
all the little details right. And ADEC really got it
507
00:27:15.200 --> 00:27:16.319
right with this program.
508
00:27:16.759 --> 00:27:19.740
So if starting off with a big savings on ADEC
509
00:27:19.809 --> 00:27:23.569
equipment sounds good to you, the ADEC Smart Start is
510
00:27:23.710 --> 00:27:25.349
definitely worth a closer look.
511
00:27:25.710 --> 00:27:28.339
Just follow the link in the show notes to learn more.
512
00:27:33.579 --> 00:27:36.299
David, I would like to just expand on this for
513
00:27:36.319 --> 00:27:39.119
a minute because I really want my audience to really
514
00:27:39.160 --> 00:27:42.720
hear this, especially my younger docs. But I think our
515
00:27:43.240 --> 00:27:46.250
senior docs a lot of times get a little lackadaisical
516
00:27:46.470 --> 00:27:50.210
in this area. So it's almost the pendulum swings here
517
00:27:50.410 --> 00:27:54.849
a little bit. But this is probably the biggest area
518
00:27:55.009 --> 00:27:58.970
that I think docs... just don't do a good job
519
00:27:59.049 --> 00:28:03.240
at because it's time consuming. I train my young docs
520
00:28:03.319 --> 00:28:07.140
when we're teaching my startup practices. It is so important
521
00:28:07.259 --> 00:28:10.380
that we are paying attention to what our operating system,
522
00:28:11.140 --> 00:28:13.990
to your point, numbers say and what actually hits our
523
00:28:14.029 --> 00:28:15.910
bank account. And I think so many times there's a
524
00:28:15.950 --> 00:28:21.269
disconnect that, oh, well, my bookkeeper or my CPA will
525
00:28:21.329 --> 00:28:24.490
catch that And I think there's kind of this disconnect
526
00:28:24.569 --> 00:28:27.359
that a lot of times our CPAs and our bookkeepers,
527
00:28:27.400 --> 00:28:31.400
they're just paying attention to income into our account and
528
00:28:31.480 --> 00:28:35.920
expenses out. But they aren't, like 90% of them out
529
00:28:35.960 --> 00:28:38.859
there are not paying attention to the fact that we
530
00:28:38.900 --> 00:28:41.460
are one of the only industries out there that has
531
00:28:41.519 --> 00:28:46.150
a whole nother system that actually pays attention to our receivables.
532
00:28:46.710 --> 00:28:49.170
And I really want you to kind of expand on
533
00:28:49.210 --> 00:28:52.369
this a little bit because I cannot tell you how
534
00:28:52.430 --> 00:28:55.450
many doctors I run into from a new doc in
535
00:28:55.690 --> 00:28:57.950
to an established practice that's.
536
00:28:57.789 --> 00:29:00.750
Coming in going, Jill, I've got problems.
537
00:29:00.849 --> 00:29:02.990
Well, my team member has been doing this and I
538
00:29:03.029 --> 00:29:06.069
always tell my startup docs, listen, this is something you
539
00:29:06.109 --> 00:29:10.130
will never, ever delegate to an employee. If the same
540
00:29:10.190 --> 00:29:12.980
person that's putting in numbers should never have access to
541
00:29:13.019 --> 00:29:15.319
your bank account to confirm that the numbers are actually
542
00:29:15.359 --> 00:29:17.099
hitting your bank account. So I'm going to let you
543
00:29:17.140 --> 00:29:19.400
take it from there. But gosh, this is like the
544
00:29:19.460 --> 00:29:22.059
meat and potatoes right here, guys, that we need to
545
00:29:22.119 --> 00:29:23.119
be paying attention to.
546
00:29:24.480 --> 00:29:26.319
I'm going to put it a little more bluntly than
547
00:29:26.359 --> 00:29:31.430
you just did. Do it. If you are not, if
548
00:29:31.470 --> 00:29:34.750
you want to practice and you are not either doing
549
00:29:34.789 --> 00:29:39.569
that yourself or ensuring that somebody external to your practice
550
00:29:39.609 --> 00:29:43.779
is doing it, the dumbest, laziest thief on the planet
551
00:29:44.519 --> 00:29:45.920
can successfully take your money.
552
00:29:47.000 --> 00:29:49.619
And you and I have seen it over and over
553
00:29:49.900 --> 00:29:52.279
and over again, which is what's really, really sad.
554
00:29:52.839 --> 00:29:57.119
I see that every week, Jill. Somebody gets stolen from
555
00:29:57.220 --> 00:29:59.880
by a thief that you look at and say, this
556
00:29:59.960 --> 00:30:01.799
person can barely get out of their own way in
557
00:30:01.839 --> 00:30:05.940
the morning. And they take the doctor for $ 100, 000 or $ 300, 000
558
00:30:05.839 --> 00:30:10.450
or $ 800, 000. So if that comparison is not happening, again,
559
00:30:10.509 --> 00:30:12.470
it needs to be external. It needs to be done
560
00:30:12.509 --> 00:30:15.849
by somebody with no access to the money flowing through
561
00:30:15.869 --> 00:30:20.329
the practice. It's just a matter of time. Sooner or later,
562
00:30:20.859 --> 00:30:23.460
one of your employees is going to want your money
563
00:30:23.779 --> 00:30:25.759
and convince themselves that they can have it and they'll
564
00:30:25.779 --> 00:30:26.019
take it.
565
00:30:26.539 --> 00:30:26.779
Yeah.
566
00:30:27.440 --> 00:30:30.349
So let's start there. Now, you mentioned accountants, and you're
567
00:30:30.509 --> 00:30:34.750
absolutely right in that most dentists think that their accountant
568
00:30:34.910 --> 00:30:37.710
is on the front lines of their embezzlement defense, and
569
00:30:37.730 --> 00:30:40.049
they're not. I don't want to turn this into a
570
00:30:40.109 --> 00:30:43.059
technical accounting discussion, but what I'll say is that most
571
00:30:43.119 --> 00:30:45.599
practitioners use something called the cash method of accounting.
572
00:30:46.319 --> 00:30:46.519
Mm-hmm.
573
00:30:47.170 --> 00:30:50.390
And the cash method of accounting means that an accountant's
574
00:30:50.450 --> 00:30:53.069
work starts when money hits your bank account.
575
00:30:53.609 --> 00:30:53.769
Yep.
576
00:30:54.390 --> 00:30:58.839
What happens before that is off their radar. Yep. So
577
00:30:59.099 --> 00:31:02.460
unless you go to your accountant and you specifically say,
578
00:31:03.160 --> 00:31:05.720
I want you to compare what my software said I
579
00:31:05.759 --> 00:31:09.259
collected with what went in the bank, they're not doing it.
580
00:31:09.980 --> 00:31:11.980
Unless you tell them to do that and pay them
581
00:31:12.039 --> 00:31:16.039
for it, it's not happening. If it is happening, folks,
582
00:31:16.519 --> 00:31:18.539
if the accountant is doing that, and especially if you
583
00:31:18.559 --> 00:31:21.700
deal with a dental CPA, some of them take a
584
00:31:21.720 --> 00:31:24.619
little more interest in this than kind of a generalist CPA.
585
00:31:25.720 --> 00:31:27.920
But the next question you have to ask is where
586
00:31:27.960 --> 00:31:31.089
they get their information. And they get it from the
587
00:31:31.150 --> 00:31:35.970
office manager. So if I'm the office manager and I'm stealing,
588
00:31:36.190 --> 00:31:39.829
and I think the accountant might be doing the comparison
589
00:31:39.869 --> 00:31:43.910
between collections and deposits. I'm either going to send them
590
00:31:43.990 --> 00:31:47.190
curated information or I'm going to steal in a way
591
00:31:47.230 --> 00:31:51.579
that doesn't create the discrepancy between collections. That's a great
592
00:31:51.619 --> 00:31:55.440
topic for another day. But for now, let's just say
593
00:31:55.839 --> 00:31:58.319
this comparison has to happen. There used to be a
594
00:31:58.359 --> 00:32:00.119
time and when you and I started in this game,
595
00:32:00.420 --> 00:32:04.059
that comparison happened every day. Yep. Yep. And that was
596
00:32:04.140 --> 00:32:06.900
really before there was such a thing as electronic payments.
597
00:32:07.240 --> 00:32:07.420
Yep.
598
00:32:07.960 --> 00:32:10.039
You know, when I started in the dental world, I'm
599
00:32:10.180 --> 00:32:13.579
going to date myself here. It was 1989. The first
600
00:32:13.619 --> 00:32:16.460
few offices I worked for, they got paid exactly two ways,
601
00:32:16.519 --> 00:32:19.299
cash and check. There were no credit cards. There were
602
00:32:19.319 --> 00:32:23.759
no electronic funds transfers. There was no virtual credit card.
603
00:32:23.799 --> 00:32:27.619
There was no care credit. All the electronic ways weren't there.
604
00:32:28.029 --> 00:32:31.730
In those days, you could match collections against deposits daily.
605
00:32:32.269 --> 00:32:35.130
Yeah, because you had physical checks or physical cash.
606
00:32:35.230 --> 00:32:38.309
It was all there in front of you. The first
607
00:32:38.410 --> 00:32:41.950
office I managed, I took that stuff. And I dropped
608
00:32:41.970 --> 00:32:43.829
it on the doctor's desk at the end of the day.
609
00:32:43.869 --> 00:32:48.250
And he would check the pegboard collections against the bank
610
00:32:48.269 --> 00:32:50.470
deposit that was sitting there in front of him and say, okay,
611
00:32:50.509 --> 00:32:52.779
everything's good. And he would take it to the bank. Yep.
612
00:32:53.190 --> 00:32:55.000
The money flow is a lot more complicated today.
613
00:32:55.460 --> 00:32:57.039
Oh my gosh, yes.
614
00:32:57.059 --> 00:33:00.279
And trying to do that daily is absolutely maddening. And
615
00:33:00.319 --> 00:33:02.000
I think a lot of the dentists who have just
616
00:33:02.019 --> 00:33:04.980
kind of abdicated, they started by trying to do that.
617
00:33:05.140 --> 00:33:08.170
It drove them crazy and they just didn't find an
618
00:33:08.210 --> 00:33:11.039
alternative way to do it. And just so everybody in
619
00:33:11.079 --> 00:33:13.539
the audience understands, the problem with trying to do this
620
00:33:13.599 --> 00:33:17.329
daily is that most electronic payments have a time offset.
621
00:33:18.269 --> 00:33:22.269
In other words, they're recorded in your practice management software
622
00:33:22.549 --> 00:33:25.049
on a different day than when they hit your bank.
623
00:33:25.289 --> 00:33:28.430
So if you're comparing bank against software daily, you're going
624
00:33:28.450 --> 00:33:31.349
to keep bumping into that where a patient pays by
625
00:33:31.410 --> 00:33:33.910
credit card today and it's a today payment for your
626
00:33:33.930 --> 00:33:36.710
practice management software, but it doesn't hit your bank account
627
00:33:36.750 --> 00:33:40.470
until three days from now. That's the challenge. So the
628
00:33:40.490 --> 00:33:43.299
first thing I tell doctors is, okay, let's not do that.
629
00:33:44.039 --> 00:33:45.980
Let's look at it for a month as a whole.
630
00:33:46.980 --> 00:33:49.920
And when you do that, most of those timing differences self-resolve.
631
00:33:51.400 --> 00:33:54.099
So if somebody pays by credit card on the 15th
632
00:33:54.140 --> 00:33:55.599
of the month and it goes into the bank on
633
00:33:55.619 --> 00:33:57.859
the 18th, when you look at the month as a whole,
634
00:33:57.940 --> 00:34:02.319
that's not an outlier anymore. And that makes life a
635
00:34:02.339 --> 00:34:04.859
little easier. Now, even when we do it for a month,
636
00:34:05.019 --> 00:34:07.519
our collections and deposits are going to line up perfectly.
637
00:34:08.570 --> 00:34:11.289
They're probably not because there are going to be some
638
00:34:11.349 --> 00:34:14.789
transactions that straddle the first day of the month and
639
00:34:14.829 --> 00:34:17.929
some that straddle the last day of the month. So
640
00:34:17.969 --> 00:34:20.889
here's what I tell dentists to do. They do collections
641
00:34:20.929 --> 00:34:23.690
versus deposits for the month. There's going to be a variance.
642
00:34:24.489 --> 00:34:26.840
So they plot it on a graph. And the thing
643
00:34:26.880 --> 00:34:31.260
about these timing differences is that they self-correct the following month.
644
00:34:31.320 --> 00:34:34.300
So let's assume that for this month, the only timing
645
00:34:34.340 --> 00:34:36.380
difference I have is that a patient pays $ 4, 000 by
646
00:34:36.400 --> 00:34:41.010
credit card. On the last day of the month. So
647
00:34:41.070 --> 00:34:43.829
when I do that comparison of collections versus deposits, I'm
648
00:34:43.869 --> 00:34:46.289
going to see that my collections, according to my software,
649
00:34:47.269 --> 00:34:51.030
are $ 4, 000 greater than my bank deposit. I stick $ 4, 000
650
00:34:50.389 --> 00:34:54.530
on the graph that I'm keeping. Yep. Next month, there's
651
00:34:54.570 --> 00:34:57.349
going to be a $ 4, 000 credit card payment that has
652
00:34:57.429 --> 00:35:02.050
no offset in the practice management software because the offset
653
00:35:02.090 --> 00:35:05.230
happened this month. So if that's my only timing difference
654
00:35:05.289 --> 00:35:08.539
for next month. Right. Then I'm going to see deposits
655
00:35:08.599 --> 00:35:12.820
greater than collections for $ 4, 000. Yep. And if you look
656
00:35:12.840 --> 00:35:15.409
at this over time, what you should see kind of
657
00:35:15.449 --> 00:35:19.590
looks like a sine wave. Some months you have collections
658
00:35:19.650 --> 00:35:22.230
greater than deposits and some months you have deposits greater
659
00:35:22.269 --> 00:35:26.030
than collections and there's no kind of overall trend. What
660
00:35:26.070 --> 00:35:27.769
I would tell your audience is if you did that
661
00:35:27.849 --> 00:35:30.380
exercise for three months and in all three months the
662
00:35:30.389 --> 00:35:34.449
variance was in one direction, that's not timing. Yep. There's
663
00:35:34.489 --> 00:35:36.769
something else going on and now you might need to
664
00:35:36.809 --> 00:35:40.239
call me or dig into it yourself or find out
665
00:35:40.320 --> 00:35:43.469
somehow why you had three straight months with the variants
666
00:35:43.530 --> 00:35:45.889
all in the same direction. Mm-hmm, mm-hmm.
667
00:35:46.639 --> 00:35:50.019
Gosh, this is just so, so important.
668
00:35:50.320 --> 00:35:52.820
I hope that everybody is really listening to this because
669
00:35:52.900 --> 00:35:55.599
this is the crux of the.
670
00:35:55.559 --> 00:35:58.199
Beginning of something much, much bigger.
671
00:35:58.780 --> 00:36:02.010
And it just, going back to your point, and I
672
00:36:02.110 --> 00:36:05.550
advocate for once a month as well for that very reason,
673
00:36:05.650 --> 00:36:09.329
there are just so many different ways that to your
674
00:36:09.369 --> 00:36:13.469
point that money flows into our accounts differently than it did.
675
00:36:13.489 --> 00:36:16.550
And this is one of those things that I always
676
00:36:16.570 --> 00:36:19.570
tell my docs, like this is doing the unsexy side
677
00:36:19.590 --> 00:36:22.050
of our business. Like nobody got into this going, Ooh,
678
00:36:22.150 --> 00:36:26.730
I can't wait to balance out my receivables and, you know,
679
00:36:26.769 --> 00:36:30.190
my deposits. But this is the hard work that we
680
00:36:30.230 --> 00:36:33.280
have to do as business owners. This is what you
681
00:36:33.320 --> 00:36:35.280
took on as a business owner. And if you want
682
00:36:35.300 --> 00:36:37.599
to keep yourself safe, You've got to do this, but
683
00:36:37.639 --> 00:36:40.239
we also, this is keeping yourself safe from the wrong
684
00:36:40.300 --> 00:36:43.460
employee too, because I know David, you and I could
685
00:36:43.800 --> 00:36:46.539
talk all kinds of, I think, you know, especially now
686
00:36:46.840 --> 00:36:48.469
with the credit cards, you would think, oh, well, it
687
00:36:48.489 --> 00:36:50.590
should be pretty easy. People wouldn't be able to steal
688
00:36:50.630 --> 00:36:53.969
with credit cards. Well, you know, I've seen offices where
689
00:36:54.190 --> 00:36:57.949
employees have their own square account where they can charge
690
00:36:58.030 --> 00:36:59.670
their own credit card machine.
691
00:37:00.110 --> 00:37:02.059
It's just crazy. The things that we see.
692
00:37:02.219 --> 00:37:02.679
Ah, yes.
693
00:37:02.980 --> 00:37:06.800
Just like that. These cost $ 9 at Amazon and they
694
00:37:06.860 --> 00:37:10.389
turn your phone into a credit card terminal. Absolutely right.
695
00:37:10.409 --> 00:37:12.630
It's crazy. So let's talk a little bit.
696
00:37:12.670 --> 00:37:16.570
You kind of got onto selective reporting a little bit,
697
00:37:16.710 --> 00:37:20.190
but what can doctors do, especially, and I think it's
698
00:37:20.389 --> 00:37:23.530
easier in a startup or a younger practice because most
699
00:37:23.610 --> 00:37:27.030
docs are pretty involved or have been trained. Hopefully if
700
00:37:27.050 --> 00:37:28.889
they've been working with me, they've been trained to be
701
00:37:28.929 --> 00:37:31.360
pretty involved with this. But I think it's kind of
702
00:37:31.409 --> 00:37:36.239
that five years to 15 year mark where we're getting
703
00:37:36.320 --> 00:37:41.539
big and we're kind of giving other people more responsibilities.
704
00:37:41.719 --> 00:37:42.599
And can we.
705
00:37:42.539 --> 00:37:45.199
Talk a little bit about that and what doctors can
706
00:37:45.239 --> 00:37:49.159
do to build some systems that allow them to independently
707
00:37:49.219 --> 00:37:50.489
verify what's happening?
708
00:37:51.269 --> 00:37:53.269
A couple of things you can do. The first thing
709
00:37:53.289 --> 00:37:56.789
I always talk about with practice owners is division or
710
00:37:56.809 --> 00:38:01.679
separation of duties. And one of the problems dentists have
711
00:38:01.760 --> 00:38:03.619
is a lot of people tell them they need to
712
00:38:03.659 --> 00:38:06.039
do that. What they don't do is give them the
713
00:38:06.099 --> 00:38:09.860
rules for how to do it. And that just creates
714
00:38:09.900 --> 00:38:13.300
this frustrating situation where the doctor's kind of looking at
715
00:38:13.360 --> 00:38:15.960
what has to be done in the practice and staff,
716
00:38:16.039 --> 00:38:19.039
and they don't necessarily divide duties in a way that
717
00:38:19.079 --> 00:38:22.159
makes sense. What I do is I give dentists three rules.
718
00:38:23.000 --> 00:38:25.800
And when we look at what's sometimes called the revenue cycle,
719
00:38:25.840 --> 00:38:28.260
in other words, the sequence of things that have to
720
00:38:28.280 --> 00:38:31.239
happen for money to get into a doctor's bank account,
721
00:38:31.280 --> 00:38:34.590
there are basically six tasks in the revenue cycle. Treatment
722
00:38:34.630 --> 00:38:37.530
gets entered into practice management software. That's always the start.
723
00:38:38.170 --> 00:38:42.530
Then patients and insurance companies get bills. Hopefully they pay.
724
00:38:42.550 --> 00:38:47.829
Those payments get recorded, which is sometimes called posted in
725
00:38:47.889 --> 00:38:51.590
practice management software. There's a daily balancing at the end
726
00:38:51.639 --> 00:38:53.760
of the day that your staff do, and then money
727
00:38:53.820 --> 00:38:56.380
gets deposited in the bank. Those are the six tasks
728
00:38:56.440 --> 00:38:59.360
in the revenue cycle. Yep. So I give Dennis three rules.
729
00:39:00.059 --> 00:39:03.059
The first rule is treatment should always, always, always be
730
00:39:03.099 --> 00:39:05.380
entered in the operatory by somebody who was there when
731
00:39:05.420 --> 00:39:10.190
it was done. And what entering treatment in the operatory does,
732
00:39:10.230 --> 00:39:12.699
first of all, it stops a whole lot of kind of,
733
00:39:13.210 --> 00:39:15.809
I can't read somebody's handwriting, so I entered the wrong stuff,
734
00:39:15.869 --> 00:39:19.289
you know, the basic clerical errors. But it also fundamentally
735
00:39:19.369 --> 00:39:23.199
changes the dynamic of embezzlement. If I have a crown
736
00:39:23.219 --> 00:39:26.019
done in a dentist's office and treatment is entered in
737
00:39:26.039 --> 00:39:28.150
the operatory, then by the time I get to the
738
00:39:28.210 --> 00:39:32.780
front desk, I owe the person. money. And anybody who
739
00:39:32.840 --> 00:39:35.099
steals is going to have to deal with my balance
740
00:39:35.320 --> 00:39:39.360
as a complication in stealing. On the other hand, if
741
00:39:39.559 --> 00:39:42.800
back when practices had one computer at the front desk
742
00:39:42.929 --> 00:39:45.030
and there was no such thing as an operatory terminal,
743
00:39:45.429 --> 00:39:47.230
you couldn't do that and treatment got entered at the
744
00:39:47.269 --> 00:39:50.230
front desk. There are a lot of practices still doing that.
745
00:39:51.630 --> 00:39:54.210
The difference that makes is if I have a crown
746
00:39:54.730 --> 00:39:57.480
and no treatment is entered in the operatory and it's
747
00:39:57.579 --> 00:39:59.260
entered at the front desk, when I get to the
748
00:39:59.300 --> 00:40:03.400
front desk, my balance is zero. In other words, somebody
749
00:40:03.420 --> 00:40:05.480
at the front desk is going to create a balance
750
00:40:05.679 --> 00:40:07.750
and then deal with it. And they always have the
751
00:40:07.869 --> 00:40:11.030
option among other things of just not entering anything into
752
00:40:11.070 --> 00:40:15.289
the software at all and pocketing all my money. Yep. Right.
753
00:40:15.309 --> 00:40:18.489
They don't have that receivable that already exists as a complication.
754
00:40:18.889 --> 00:40:19.150
Yeah.
755
00:40:19.849 --> 00:40:23.570
So that's rule number one. You've got five jobs left.
756
00:40:23.829 --> 00:40:28.260
Patients and insurance companies get bills. They pay those payments,
757
00:40:28.300 --> 00:40:31.400
get entered or posted. There's balancing at the end of
758
00:40:31.460 --> 00:40:35.699
the day. And then the bank deposit gets made. And
759
00:40:35.719 --> 00:40:39.110
I have two more rules for those five things. Nobody
760
00:40:39.150 --> 00:40:42.349
does more than two of them in your office. And
761
00:40:42.369 --> 00:40:45.769
the two that they do are not sequential. Yeah. Let's
762
00:40:45.789 --> 00:40:47.929
step back for a minute and talk about why this matters.
763
00:40:48.940 --> 00:40:51.579
What we want to do as a practice owner is
764
00:40:51.619 --> 00:40:53.320
we want to make it so that if one of
765
00:40:53.360 --> 00:40:56.539
my staff is going to steal, they have to involve
766
00:40:56.579 --> 00:41:00.650
a coworker. Mm-hmm. And for a wannabe thief, that is
767
00:41:00.690 --> 00:41:03.030
a hugely risky conversation to have to go to my
768
00:41:03.070 --> 00:41:05.920
co-worker and say, Jill, I'd like to steal from our boss,
769
00:41:05.960 --> 00:41:10.599
but I need you to help me. It's hard to
770
00:41:10.659 --> 00:41:15.300
quantify precisely, but the empirical work suggests that that will
771
00:41:15.340 --> 00:41:20.559
deter about 80% of would-be thieves. What you're really doing, doctor,
772
00:41:20.780 --> 00:41:25.940
is you're creating accountability between your staff. That once you
773
00:41:25.980 --> 00:41:28.139
set the system up, it doesn't take any of your effort.
774
00:41:28.179 --> 00:41:31.219
So if I am the person making the bank deposit
775
00:41:31.239 --> 00:41:33.480
at the end of the day, I know that when
776
00:41:33.519 --> 00:41:35.800
I walk out the door with money, I'm suddenly accountable
777
00:41:35.820 --> 00:41:39.250
for it. So I want to know how much is there.
778
00:41:39.429 --> 00:41:41.269
And not only that, I want to know how much
779
00:41:41.309 --> 00:41:45.889
should be there. So that creates accountability between me and
780
00:41:45.929 --> 00:41:48.050
whoever did the end of day balancing, which is the
781
00:41:48.090 --> 00:41:50.789
last step before me, for me to know how much
782
00:41:50.869 --> 00:41:53.760
is there and how much should be there. Yep. If
783
00:41:53.820 --> 00:41:56.449
the same person does balancing and makes the deposit, you
784
00:41:56.489 --> 00:41:58.010
don't have that cross accountability.
785
00:41:58.500 --> 00:41:58.659
Yeah.
786
00:41:59.369 --> 00:41:59.889
Yeah, for sure.
787
00:41:59.949 --> 00:42:02.590
And I think on our ortho side, which is just
788
00:42:02.650 --> 00:42:05.269
a tad bit different, you know, I think doctors, what
789
00:42:05.289 --> 00:42:07.530
you have to hear is that, and it's a little
790
00:42:07.570 --> 00:42:10.460
harder when we're a startup practice, right? And we've only
791
00:42:10.500 --> 00:42:13.360
got that one employee and the doctor. So the doctor
792
00:42:13.400 --> 00:42:15.320
has to be the second set of eyes on this.
793
00:42:15.860 --> 00:42:18.679
But what we have to really, I say, be careful
794
00:42:18.739 --> 00:42:22.230
about is, does the physical contract that the patient signed
795
00:42:22.730 --> 00:42:27.059
match what was actually entered into our software? A lot
796
00:42:27.079 --> 00:42:30.449
of times we see the stealing or whatnot happening with
797
00:42:30.690 --> 00:42:36.840
our down payments where we'll see a payment posted. in
798
00:42:36.860 --> 00:42:40.059
a certain, you know, maybe it came in as a check,
799
00:42:40.119 --> 00:42:43.500
I'll do air quote check or cash, but then it
800
00:42:43.539 --> 00:42:46.110
was switched to a check or it was switched to
801
00:42:46.150 --> 00:42:50.010
a credit card. And that's where like as doctors, we
802
00:42:50.090 --> 00:42:52.530
have to, David, to your point, we need to have
803
00:42:52.610 --> 00:42:53.650
second set of eyes.
804
00:42:54.110 --> 00:42:55.090
We've got within.
805
00:42:54.909 --> 00:42:58.360
Our operating systems where we can pay attention on our
806
00:42:58.440 --> 00:43:02.820
end of day reports and see if Was a payment
807
00:43:03.139 --> 00:43:06.239
changed in the way it was processed maybe to give
808
00:43:06.320 --> 00:43:09.610
out a receipt and then put into our system differently?
809
00:43:09.659 --> 00:43:12.219
So going back to when we say it takes a
810
00:43:12.239 --> 00:43:17.170
couple of days for a credit card to process. And
811
00:43:17.309 --> 00:43:19.210
so I think even though it's a little different from
812
00:43:19.250 --> 00:43:22.849
the dental office, there are still safeguards in our orthodontic
813
00:43:22.889 --> 00:43:25.579
practices today. that we have to pay attention to whether
814
00:43:25.599 --> 00:43:27.760
we're a small practice or as we get bigger, to
815
00:43:27.800 --> 00:43:31.000
your point, we've got different people handling different things and
816
00:43:31.039 --> 00:43:34.260
how things are posted, but we're also paying attention to
817
00:43:34.699 --> 00:43:37.639
the safeguards that are in place with our operating systems
818
00:43:38.239 --> 00:43:44.639
and following the employee touch points within the system to see, hmm,
819
00:43:45.070 --> 00:43:45.699
why was there.
820
00:43:45.550 --> 00:43:46.639
An adjustment made there?
821
00:43:46.800 --> 00:43:50.650
Or why was there something changed here and getting clarification
822
00:43:50.690 --> 00:43:51.489
before it's too late?
823
00:43:53.139 --> 00:43:56.239
It surprises a lot of orthodontists when I say to them, really,
824
00:43:56.440 --> 00:43:59.260
one thing you need to do is check the contract
825
00:43:59.920 --> 00:44:02.659
against what was entered into your practice. Check the dollar
826
00:44:02.719 --> 00:44:04.780
amount of the contract and the down payment and the
827
00:44:05.179 --> 00:44:08.699
monthly payments against what was entered into your practice management.
828
00:44:08.980 --> 00:44:10.460
I say, really? I need to do that? I mean,
829
00:44:10.500 --> 00:44:13.699
that's a lot of work. No, you do 200 starts
830
00:44:13.739 --> 00:44:16.869
a year. That's checking exactly one contract a day.
831
00:44:17.570 --> 00:44:18.590
Yeah, yeah.
832
00:44:18.869 --> 00:44:19.630
That's your livelihood.
833
00:44:20.059 --> 00:44:21.380
Yeah, for sure. For sure.
834
00:44:21.900 --> 00:44:25.360
So when we kind of pull all these pieces together,
835
00:44:25.380 --> 00:44:28.320
and I know you've been giving us safeguards the whole
836
00:44:28.380 --> 00:44:31.849
time here, but anything else that we need to really
837
00:44:31.909 --> 00:44:34.309
be paying attention to that we haven't covered?
838
00:44:35.409 --> 00:44:37.849
I'm going to add one more that I am fairly
839
00:44:37.929 --> 00:44:40.610
sure most of your audience has never, ever heard before.
840
00:44:41.519 --> 00:44:42.539
Great. Lay it on us.
841
00:44:43.780 --> 00:44:47.110
I call this articulation. And as soon as I start
842
00:44:47.150 --> 00:44:50.130
talking to a dental audience about articulation, I mean, they're all,
843
00:44:50.670 --> 00:44:52.889
you know, they're all picturing a mandible and a maxilla.
844
00:44:53.369 --> 00:44:57.360
And I've very deliberately borrowed that word from that concept.
845
00:44:57.380 --> 00:45:01.119
You know, articulation being the idea that two pieces should
846
00:45:01.159 --> 00:45:05.000
fit together. So let me tell you what you do
847
00:45:05.059 --> 00:45:06.860
in articulation, and then I'll tell you why.
848
00:45:07.380 --> 00:45:07.579
Yeah.
849
00:45:07.719 --> 00:45:10.750
What articulation involves is this. At the end of each day,
850
00:45:11.389 --> 00:45:14.769
you get a day end report from your practice management software.
851
00:45:14.969 --> 00:45:18.610
My strong, strong preference is that the doctor print this themselves.
852
00:45:19.849 --> 00:45:21.849
In other words, if you allow somebody to hand you
853
00:45:21.889 --> 00:45:25.550
a report, you have no control whatsoever over the parameters
854
00:45:25.630 --> 00:45:27.750
used to generate that report. And in my mind, that
855
00:45:27.789 --> 00:45:31.170
makes it inherently unreliable. So what I like to see
856
00:45:31.190 --> 00:45:33.409
a doctor do is print their end of day report
857
00:45:33.489 --> 00:45:35.949
each day, check it for the kinds of things you mentioned,
858
00:45:35.989 --> 00:45:40.159
like the change payments and things like that. Anytime As
859
00:45:40.199 --> 00:45:43.659
a practice owner, you review a report, put your initials
860
00:45:43.739 --> 00:45:45.619
on it so that you know that that's the exact
861
00:45:45.719 --> 00:45:49.019
one you saw. What I want a doctor to do
862
00:45:49.139 --> 00:45:51.849
at the end of the month is get a month-end
863
00:45:51.929 --> 00:45:54.530
summary report from their practice management software. So this is
864
00:45:54.570 --> 00:45:57.710
like a really big day-end report. It covers the whole month. Yep.
865
00:45:58.530 --> 00:46:01.489
Get that summary report. Pull out the 20 or 18
866
00:46:01.489 --> 00:46:05.019
or 14 end-of-day reports that you have. Add up three
867
00:46:05.079 --> 00:46:08.840
totals on those reports. And those totals in a general
868
00:46:08.860 --> 00:46:12.840
dental practice are fees, adjustments, and payments. In other words,
869
00:46:12.889 --> 00:46:15.110
what you billed, what was adjusted, and what was paid.
870
00:46:15.690 --> 00:46:19.349
So for the 14 or the 20 individual reports, you
871
00:46:19.449 --> 00:46:23.829
add those three numbers up. You compare that total to
872
00:46:23.849 --> 00:46:27.769
the month end total. These should agree to the penny.
873
00:46:28.380 --> 00:46:31.079
I mean, there should not be one ounce of difference
874
00:46:31.760 --> 00:46:36.159
between the 14 or 20 and the total for the month.
875
00:46:36.699 --> 00:46:36.820
Yep.
876
00:46:37.530 --> 00:46:41.889
That's articulation why is it important because a lot of
877
00:46:41.949 --> 00:46:45.190
thieves will do after hours activity yep they will come
878
00:46:45.250 --> 00:46:47.110
in on a saturday and they will put stuff through
879
00:46:47.130 --> 00:46:49.349
your software that they do not want you to see
880
00:46:49.409 --> 00:46:53.750
or know about if they do your month will not
881
00:46:53.789 --> 00:46:58.769
articulate comparing the the daily totals to the monthly total
882
00:46:58.809 --> 00:47:00.889
they won't add up and that tells you that something
883
00:47:00.949 --> 00:47:04.940
was kind of slid into your software after hours, either
884
00:47:05.179 --> 00:47:08.269
on a weekend or somebody stays late and they put
885
00:47:08.309 --> 00:47:12.590
more stuff through. So it's articulation. It takes almost no time.
886
00:47:12.650 --> 00:47:15.829
In fact, what we do when we teach practice owners
887
00:47:15.869 --> 00:47:17.429
how to do this is we say, at the end
888
00:47:17.449 --> 00:47:19.630
of the day, when you print that report, here's a
889
00:47:19.650 --> 00:47:22.730
spreadsheet for you. Just enter those three numbers into the spreadsheet.
890
00:47:23.530 --> 00:47:24.550
It takes maybe a minute.
891
00:47:25.099 --> 00:47:25.340
Yep.
892
00:47:25.880 --> 00:47:27.199
And if you do that every day, when you get
893
00:47:27.219 --> 00:47:28.760
to the end of the month, the total is already there.
894
00:47:29.730 --> 00:47:31.309
And all you have to do is print a month-end
895
00:47:31.349 --> 00:47:34.280
report and compare it to the total you already have.
896
00:47:34.599 --> 00:47:37.119
Yeah, I totally agree with you on that. And I
897
00:47:37.159 --> 00:47:40.300
know Ortho, a tad bit differently, but we're looking at
898
00:47:40.340 --> 00:47:44.489
those production and collections, but your adjustments, all of that
899
00:47:44.550 --> 00:47:47.489
is still the same. We're just trying to compare that
900
00:47:47.550 --> 00:47:51.170
somebody didn't go in and write off their family member's account.
901
00:47:51.690 --> 00:47:57.260
now your net production changed out. And that happens a lot, guys, unfortunately.
902
00:47:57.380 --> 00:48:00.260
So I think you're so right on that. And this, again,
903
00:48:00.320 --> 00:48:02.960
is just not the fun side of doing business, but
904
00:48:03.019 --> 00:48:05.340
it's what we have to do in order to keep
905
00:48:05.400 --> 00:48:06.000
ourselves safe.
906
00:48:06.760 --> 00:48:09.219
Yeah. And it's about a 10-minute job. I mean, this
907
00:48:09.300 --> 00:48:12.130
does not take hours and hours to do. And If
908
00:48:12.170 --> 00:48:15.150
you have a spreadsheet, and I'll mention that we have
909
00:48:15.230 --> 00:48:19.769
articulation spreadsheets built for any practice management software you could imagine.
910
00:48:19.829 --> 00:48:22.610
So if somebody in the audience wants a spreadsheet, just
911
00:48:22.769 --> 00:48:25.739
email me. I'm sure we'll talk about contact information at
912
00:48:25.780 --> 00:48:28.460
the end of the session today. Just email me. Tell
913
00:48:28.500 --> 00:48:32.260
me what practice management software you use. And if you're
914
00:48:32.280 --> 00:48:35.659
an OrthoTrack user or a Dentrix user or whatever, we
915
00:48:35.699 --> 00:48:39.909
have an articulation spreadsheet that's built for your exact software. Perfect.
916
00:48:40.329 --> 00:48:40.730
I love it.
917
00:48:40.949 --> 00:48:41.340
I love it.
918
00:48:41.789 --> 00:48:44.989
Well, David, I know you and I could just talk
919
00:48:45.130 --> 00:48:47.559
and talk and where this is the stuff that I,
920
00:48:48.110 --> 00:48:50.840
you know, unfortunately get pretty excited about. I know you
921
00:48:50.880 --> 00:48:53.380
do as well, because I think this is just such
922
00:48:53.500 --> 00:48:56.159
a area that does not get enough light shined on
923
00:48:56.559 --> 00:48:59.420
when we think about all the things in a practice
924
00:48:59.800 --> 00:49:01.599
that we have to pay attention to as an owner.
925
00:49:01.980 --> 00:49:05.480
So if somebody wants to learn more about Prosperident or
926
00:49:05.880 --> 00:49:08.559
access to the resources that you were just talking about,
927
00:49:08.639 --> 00:49:10.570
what's the best way that they can get in touch
928
00:49:10.610 --> 00:49:12.630
with you or your team and connect?
929
00:49:13.250 --> 00:49:15.789
Our website is a really great place to start. It
930
00:49:15.849 --> 00:49:18.469
has so much information on it. We even have an
931
00:49:18.570 --> 00:49:22.159
AI chatbot just to. help people find stuff on our website.
932
00:49:22.659 --> 00:49:25.480
But our website is just prosperident.com.
933
00:49:25.960 --> 00:49:26.360
Nice and easy.
934
00:49:26.380 --> 00:49:31.030
Very simple. And if you prefer to gather your information
935
00:49:31.070 --> 00:49:33.429
by talking to somebody, we'd be happy to help with that.
936
00:49:34.210 --> 00:49:35.670
And our toll-free number is 888-398-2327.
937
00:49:40.010 --> 00:49:40.449
Perfect.
938
00:49:41.389 --> 00:49:44.030
And now a word from the sponsors who make this
939
00:49:44.110 --> 00:49:50.489
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940
00:49:50.550 --> 00:49:54.179
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941
00:49:54.219 --> 00:49:57.219
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942
00:49:57.320 --> 00:50:01.019
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943
00:50:01.099 --> 00:50:05.590
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00:50:05.650 --> 00:50:08.630
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945
00:50:08.889 --> 00:50:13.230
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946
00:50:13.309 --> 00:50:18.269
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947
00:50:18.349 --> 00:50:20.690
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948
00:50:21.070 --> 00:50:21.530
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949
00:50:21.969 --> 00:50:26.809
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950
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951
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952
00:50:37.619 --> 00:50:37.960
Awesome.
953
00:50:38.079 --> 00:50:41.349
Well, once again, this has just been such a great
954
00:50:41.489 --> 00:50:43.769
episode with you and you are just such a wealth
955
00:50:43.809 --> 00:50:46.030
of knowledge. And again, I'm glad that you're out there
956
00:50:46.170 --> 00:50:52.320
fighting our crime on our behalf. So, you know, the
957
00:50:52.360 --> 00:50:54.500
way I like to finish this up, I like us
958
00:50:54.619 --> 00:50:56.880
to finish up with a speed round. Are you ready
959
00:50:56.960 --> 00:51:01.500
for this time's speed round? All right, here we go.
960
00:51:01.559 --> 00:51:02.300
I guess I'm ready.
961
00:51:02.960 --> 00:51:05.739
All right. What is one daily habit or ritual that
962
00:51:05.800 --> 00:51:07.889
helps you stay productive or balanced?
963
00:51:08.610 --> 00:51:09.190
Get up early.
964
00:51:10.030 --> 00:51:11.329
Ooh, that's a good one. Okay.
965
00:51:11.750 --> 00:51:15.909
What is your go-to strategy for getting unstuck when you're
966
00:51:16.010 --> 00:51:17.070
facing a tough problem?
967
00:51:17.980 --> 00:51:20.780
I usually stand up and walk around for a minute.
968
00:51:21.139 --> 00:51:23.880
I move physically, so I'll go outside for a few
969
00:51:23.900 --> 00:51:26.059
minutes or I'll poke my head into one of our
970
00:51:26.079 --> 00:51:28.280
team offices and chat with them for a minute. But
971
00:51:28.320 --> 00:51:30.599
I just, I try to take my mind off the
972
00:51:30.619 --> 00:51:31.719
problem and then come back.
973
00:51:32.199 --> 00:51:33.099
Yeah, I love it.
974
00:51:33.199 --> 00:51:33.760
I love it. All right.
975
00:51:33.800 --> 00:51:38.019
And the final one, what is one business idea that
976
00:51:38.079 --> 00:51:40.539
you've recently seen and wish.
977
00:51:40.429 --> 00:51:41.130
You had thought of?
978
00:51:44.349 --> 00:51:46.630
I wish I had invented artificial intelligence.
979
00:51:47.329 --> 00:51:47.869
Yeah, right.
980
00:51:50.329 --> 00:51:53.309
For good or for bad, wherever it's taking us, I agree.
981
00:51:54.789 --> 00:51:56.409
It's certainly transforming our business.
982
00:51:56.849 --> 00:51:58.010
Yeah, absolutely.
983
00:51:58.469 --> 00:52:01.489
Well, it has been an absolute pleasure. Thank you so
984
00:52:01.530 --> 00:52:03.909
much for being on Haydox again with us.
985
00:52:04.449 --> 00:52:05.889
I love every time we do this, Jill.
986
00:52:06.250 --> 00:52:06.449
Yeah.
987
00:52:06.750 --> 00:52:07.030
All right.
988
00:52:07.090 --> 00:52:11.719
Until next time. Are you ready to start a practice
989
00:52:11.760 --> 00:52:14.590
of your own? Need a new fresh set of eyes
990
00:52:14.670 --> 00:52:18.289
or some advice on your existing practice? If so, reach
991
00:52:18.349 --> 00:52:24.679
out to me, Jill Allen, at www.practiceresults.com. If you like
992
00:52:24.699 --> 00:52:26.739
what we're doing here on Hey Docs and want to
993
00:52:26.780 --> 00:52:29.400
hear more of this awesome content, be sure and give
994
00:52:29.440 --> 00:52:33.480
us a five-star rating on your preferred listening platform and
995
00:52:33.539 --> 00:52:37.760
subscribe to our show so you never miss an episode. Remember,
996
00:52:38.019 --> 00:52:39.860
new episodes drop every Thursday.
997
00:52:40.380 --> 00:52:41.179
See you next week.