Hiring an Accountant to Keep All Your Worth

By Michael L. DeVries, CFP®, CHBC, EA

I received a call from a client for whom I was doing monthly accounting.  At that time, our services for the client consisted of compiling monthly financial statements, filing quarterly payroll tax returns, annual company returns, and assisting him with various practice management projects. The call I received from the doctor went like this.

“Mike, I’m calling to tell you that I am not going to need your professional services any longer.  My office manager has been doing a great job for me.  Together, we have decided that she could do my monthly accounting using Quickbooks.   We are going to be working with a CPA firm who will use this information to prepare the annual tax returns.  I really appreciate all the work that you have done for me in the past; you have helped me from the start of my practice, but going forward I have decided to use a different approach to my financial management.  I know you don’t agree with this process based upon previous conversations you have had with my office manager when she first approached you about this matter.  I respect your opinion, but I have decided to make this move and I request that you help make this an easy transition.”

I dislike these phone calls. I have had a few in the 30+ years of specializing in helping doctors with their business.  No matter what I try to say to keep the process the same in an attempt to help the doctor, my words fall on deaf ears.  His trusted office manager, who works with him daily, has convinced him that adding this duty to her responsibilities is best for him and will result in a cost savings.  Well … that is until things are assessed again about two years later.  That is when I received another from the doctor.

weasel“Mike, remember when we talked a couple of years ago, and you gave me all the reasons that I should consider keeping  your services rather than having my office manager do that work for me?  Well, I’m sure you do.  I’m calling because I know you would never say, ‘I told you so’ – so, I’m going to do it for you.  Mike, you told me so, and it cost me more money than I care to admit.  We are having an audit done in our office right now, and they figure that my office manager stole hundreds of thousands of dollars since I terminated my services with you.  I’m making this call, not for your benefit, but for the doctors for whom you work.  If any of them think so highly of their office manager that they think that they can replace you and your services, you can tell them my story.”

I dislike these phone calls too. It saddens me to hear of doctors who work so hard to get to this point of their career in medicine or dentistry only to become victims of embezzlement, fraud, waste or abuse from a trusted employee.   The work we do doesn’t guarantee that theft in the practice will not occur.  However, the monthly process that we recommend does make it increasingly more difficult and less likely to occur.

Several years ago I called a good friend who works for a software company that we use to benchmark dental offices.  I had a situation that called for a more detailed review of the possibility of fraud, and I needed someone who could work with me when we suspected fraud within a doctor’s office.  He introduced me to Bryant Truitt, whose passion for helping the client really struck a chord with me.  Bryant and I now partner together when the circumstances call for each other’s expertise.  In my discussions with Bryant, he and I both realized that not all accountants who say they specialize in working with dentists follow a good process for avoiding “fraudster weasels” from sneaking through the back doors of your office.  It is for this reason that I’m offering you my top five standards that doctors should consider when hiring an Accountant:

  1. Give consideration to the phone call I received from my doctor client. It’s a true story and unfortunately I have a few of them.  You need an accounting professional that specializes in serving your business.  Preferably, a person or a firm where working with healthcare professionals is the major part or the only part of their business.  A source for finding such professionals around the country is at the National Society of Healthcare Business Consultants (www.NSCBC.org).
  2. Create a written understanding with the professional you hire that he or she is working for you. The professional you hire will need to have communications with your staff – especially, your office manager.  It’s paramount to keep good relations with your advisors and your team, but ultimately the professional needs to be looking out for your best interest.  This should be done with a service engagement letter.  It troubles me when I receive a call from the office manager inquiring about the services we offer.  I realize doctors are busy – just don’t be too busy to care about this important aspect of your business.
  3. Whether your office is large or small, ask your accounting professional to provide you with an outline of accounting procedures to implement in your office. This would include:
    • Recommended client bookkeeping solutions.
    • Segregation of duties where the accounting professional and you are involved.
    • A process for the daily depositing of receipts and reconciliation of such to your practice management system.
    • Effective procedures for handling money in your practice including Petty Cash.
    • A listing of what information the accountant requires at the end of each month – if it is just your Quickbooks file and the bank statement, you know you don’t have the right professional.  They should also be looking at and spot checking other practice management reports and business records, such as charge and adjustment reports, the accounts receivable aging report, credit card statements, capital equipment purchases, and loan documents.
    • Ability to integrate your practice management system into the financial statements that are compiled on a monthly basis – don’t short-change yourself and business by doing this just quarterly or annually.
    • Options for regular communications regarding your business and the financial management of such.
  4. Look for a professional that provides business advice and not just financial statements and tax compliance. The person with whom you work should have the resources to be able to benchmark your practice to your peers in your specialty and be able to assist you solve a problem when a benchmark is out of line.  The person you hire should be experienced in running a business.
  5. Make sure that the professional with whom you work is well versed in Healthcare Compliance. If the professional you hire isn’t proactive in establishing a Business Associate Agreement with your office, chances are you may have the wrong professional.  HIPAA Privacy, HIPAA Security, OSHA, and Corporate Compliance regarding Fraud, Waste and Abuse can have a major impact on your business.

I started this with a story of a doctor who put a lot of trust in his office manager.  Let me say in ending, that it is good to trust your team – but, it is also good to verify that trust.  Give consideration to these standards when hiring an accounting professional and you will gain an objective trusted business advisor.  An advisor who will work at keeping the “fraud weasels” from making an easy transition – from working for you to working you for all your worth.

We have developed a 5 Minute Fraud Buster checklist to help you identify the simple financial and accounting activities that will make a different in your practice.  Learn more and get your free copy at www.mikeldevries.com/fraudbuster.


Mike DeVries is a CERTIFIED FINANCIAL PLANNER ™, Enrolled Agent,  and a Certified Healthcare Business Consultant focusing on helping healthcare professionals. If you would like to learn more about becoming a client, contact Mike at www.vmde.com