Dr. Lee Summers started his small-animal practice 12 years ago. He has had his ups and downs, but now his practice is thriving
and growing. He has a staff of 14: three veterinarians, including himself, as well as a trustworthy office and support staff.
He pays and treats his staff well, and he is proud that there is little turnover among them.
As is often true with veterinarians, Dr. Summers has trouble delegating responsibilities. As his practice grows, he is reluctant
to let go of payroll duties, scheduling obligations and bookkeeping details; however, he eventually concedes and turns these
duties over to in-house employees.
The practice is now grossing more than $1 million per year, and Dr. Summers' accountant says it's important to put some financial
fail-safes in place as a check-and-balance precaution.
Recently, two separate clients called Dr. Summers stating that they'd received bills for services they'd already paid for.
Dr. Summers apologized and said he would look into these transactions. He promptly checked the books and found that both clients
had outstanding balances.
He called them and asked if they could each send him a copy of the check or receipt that indicated they had paid for their
services. Within a week he received copies of two checks that the pet owners had given to his clinic in payment for the services
in question. They went on to tell Dr. Summers that when they paid their bills, the receptionist told them she would stamp
the hospital name on the check in preparation for deposit. Dr. Summers discovered that the canceled checks did not have the
hospital name on the deposit line but rather the handwritten name of the receptionist who had taken the check. He was horrified
that a trusted employee had embezzled $600 from his practice.
He confronted the employee, showed her the misdirected checks and asked for an explanation. Suffice it to say, he heard a
tale of woe that did not justify the theft. He considered firing her on the spot but then realized that such an action would
make it difficult for him to recoup his money in a timely fashion. She promised to pay, begged for forgiveness and promptly
stopped coming to work.
At this point, Dr. Summers contacted the authorities and had his employee arrested. Ultimately, her attorney reached an agreement
with the town prosecutor, and she paid back her ill-gotten gains in 20 separate payments over the next two years.
Dr. Summers was shaken. He had lost his self-confidence in his ability to judge the character and honesty of his employees.
Instead of hiring a bookkeeper, accountant and payroll service to assist him in preventing any future employee indiscretions,
he redoubled his own efforts to oversee the cash flow and monetary functions of his practice. He was no longer certain he
could trust anyone else with his practice's financial security but himself.
Regardless of whether you are in a single- or multiple-doctor veterinary practice, if you practice long enough you'll experience
some type of undetected financial loss. Hopefully it will not be a result of embezzlement as was the case at Dr. Summers'
clinic. Other causes include computation error, negligence, client deception and even vendor fraud.
While Dr. Summers' decision to hunker down and personally oversee his finances to prevent similar occurrences is admirable,
it's not feasible in a continually growing practice. It makes more sense to put fail-safes in place that will trigger warnings
when money strays from the appropriate destinations. Payroll companies track hours, rates and tax deductions. An outside bookkeeper
will balance the books frequently to account for all transactions. Finally, meeting frequently with your accountant allows
you to search for abnormalities and set realistic financial expectations.
Veterinary practitioners are expert doctors, but they are rarely expert financiers. Expending money to avoid potential financial
problems before they happen in your clinic is just what the doctor ordered.
Dr. Marc Rosenberg is director of the Voorhees Veterinary Center in Voorhees, N.J., and is a member of the New Jersey Board
of Veterinary Medical Examiners. Although many of his scenarios in "The Dilemma" are based on real-life events, the veterinary
practices, doctors and employees described are fictional.