Making a few simple changes to your cash-handling procedures can potentially save your practice thousands of dollars.
Over the past few months, I have been reviewing individual policies, updating, fixing, and honing each one. When I started reviewing the deposit log and money handling process, I noticed a lot of "opportunities" for things to go wrong. I had assumed that everything was great and moving along as it should be. Although the moving along portion is true, the "everything was great" part needed some help.
When it comes to money handling you can never have too many fail-safe protocols in place. The most important thing to remember is to never allow cash to be too accessible to staff. What I mean is that you need to have protocols in place that tell your staff, "this is not yours, and it is off limits." Never provide an opportunity for a decision to be made by a staff member that could jeopardize your bank account. I'm talking about transparency in your process and procedure.
If you suspect a staff member may be taking liberties that are not his to take, a four- or five-step process to tighten up your money-management processes would serve you best. This is such a difficult situation to be faced with, in lieu of actually videotaping someone taking money that is not his to take, you only have suspicion. That could get you into some real trouble.
Here are some ways you can protect your cash by creating solid accounting processes:
• Be sure that two people count all cash. I know this seems very obvious, but again it's about transparency. Some employees may be tempted to think, "Well, I'll just borrow this $400 until pay day, and then I'll give it back. That's not really stealing." By having two people count the money that has come in you have just doubled your chances of hanging on to it.
• A cash log should be kept with all money collected. Although this may seem like an unnecessary step, having this information allows you to add up the amount of cash collected at the end of the month, versus what was deposited.
• When cash is received and counted, sending a return receipt for that amount is a must. Preferably to a practice director or administrator. This can be a simple e-mail stating: "Cash deposit received at 1:30 p.m. from Sally in the amount of $402.32." Think of it as an electronic receipt. If the administrator sent over $502.32, then she will know there is a problem with Sally handling cash.
• If there is a viable reason for petty cash to be kept in the office (office supplies, employee lunches, meetings, etc.) then have a set amount of $500 or whatever you deem necessary. Get the rest of the cash collections into the bank immediately. This reduces the amount of cash loss you could suffer if someone decides to walk out with it. Do not let it add up! If your usual procedure states that once a month you make an actual bank deposit, but you're now sitting on a few thousand dollars, change your procedure.
• Get a receipt from the bank. Another obvious one, yes, but if you allow an employee the freedom to drop a bunch of cash in a deposit bag on the counter and walk away, you've opened yourself up to multiple opportunities for that cash to never make it into your bank account. The employee can state, "I dropped it at the bank, I swear!," but perhaps the cash never really made it to the bank. A bank employee could have made the decision to leave his job and keep your money as severance pay. A customer could have taken the deposit, when the bank employee turned his back. All of these can be avoided with a bank receipt that then gets attached as confirmation and documentation that money was deposited in the bank.
• If you have access to view the bank account online, have this be the final step of confirmation. By viewing the record of the deposit, you will be able to confirm that the amount you sent is the amount that made it into your account. If there is a discrepancy, it's time to backtrack through the steps and find out where the money went.
By tightening up your cash-handling processes and making them very public to your employees, you are giving them the opportunity to be great employees; instead of people you're not sure if you can trust. Thousands of dollars go missing every year due to lax accountability and transparency. Close the loop.