Dear Dangerously in Love with Your Finances,
Our small-to-medium animal medical center located in Washington consists of a team of eight: one Doctor of Veterinary Medicine, three registered Veterinary Technicians, two Veterinary Assistants, an office manager, and a receptionist. The office manager does a good job managing the staff and the bookkeeping. However, as the owner, I believe the animal center needs more attention to its accounting processes. The office manager is the only one who knows the accounting and bookkeeping processes which leaves us very vulnerable. What happens if she resigns or goes on emergency medical leave? Even worse, what if she is stealing money or products from the practice? How do I protect my veterinary practice?
~ A Vulnerable DVM
Dear Vulnerable DVM,
Many animal medical centers and veterinary practices start small; as they grow, they increase staff and improve the medical processes. However, owners often forget about improving their accounting and bookkeeping processes. It is usually an afterthought or an incident that occurs that forces them to make a change in their internal financial controls.
It is quite dangerous for the office manager to be the only one who knows the bookkeeping process – as the process starts and stops with her. When she isn’t around, the process stops, leaving your animal medical center in limbo.
There is no way to 100% protect your practice from accounting and financial fraud; the key is to put protective measures in place:
- Responsibilities should be separate: do not allow one person to have total control of the process.
- Supplies and inventory should be checked regularly by different employees.
- Trust and verify: hire a part-time financial controller or CFO to verify financial transactions and financial statements presented by the office manager/bookkeeper.
Take a look at this article to determine whether you need an accountant, a bookkeeper or a CFO and when to hire each one as your business continues to grow.
Think about your car alarm. Installing the alarm does not mean your car will not be broken into or get stolen. The car alarm may deter the thief by making the thief think twice about committing the crime.
I urge you to implement these changes as soon as possible. If you need assistance, please do not hesitate to give us a ring.
As always, stay dangerously in love with your finances,