How To Protect Your Veterinary Hospital Against Theft

Has your veterinary hospital ever been a victim of theft? Chances are the answer is “yes,” but you may not be aware of how and if your hospital continues to be susceptible to theft or embezzlement.

According to Occupational Fraud 2024: A Report to the Nations^®, the typical organization loses 5% of revenues each year to fraud. The study also found that the typical episode – from commencement to detection – lasted 12 months. This study is no different from the experience of KSM’s veterinary clients. As a result of this, we advise veterinary hospitals to have an employee-dishonesty insurance policy.

How can you protect your hospital from theft? The first step is to segregate duties among employees, which involves utilizing different individuals for various aspects of related activities in order to create a system of checks and balances. For example, the person collecting client payments should not reconcile the checkbook.

Unfortunately, many veterinary hospitals often lack a sufficient number of staff among whom they can divide the duties required to protect their business from theft or embezzlement. Even if this is the case, there are additional steps you can take to protect your hospital. Access to cash is the biggest temptation for most would-be thieves. This temptation can manifest itself in several forms, including theft of cash on hand, theft of cash receipts, and fictitious payments.

Here are some processes hospitals with staffing issues can implement to deter theft by giving the appearance of additional oversight.

1. Have business bank statements mailed to the owner’s home address. Be sure they are opened, removed from the envelope, and reviewed before handing them over to the person in charge of reconciling the bank account.
2. Ask your bank to include images of the cleared checks with each bank statement.
3. Limit access to the deletion of invoices and estimates in the hospital’s practice management system.
4. Provide anti-fraud training to all staff to educate them on how to identify signs of theft or embezzlement.
5. Ask a trusted advisor if you can post their phone number at your hospital, which allows employees to report theft or embezzlement anonymously. According to Occupational Fraud 2024: A Report to the Nations^®, more than 40% of reported cases came from a tip, with 52% of those tips coming from an employee.
6. Have business credit card statements mailed to the owner’s home address. Be sure they are opened, removed from the envelope, and reviewed before handing them over to the person who pays the bill.
7. Limit access to price-changing in the practice management system.
8. Implement a purchase-order approval process and be sure purchase orders are matched with invoices when paid.

Download the Veterinarian’s Guide to Best Practices, Vol. 2 for 15 more tips on internal controls you can implement at your veterinary hospital.