Checks and Balances

By VHMA Admin posted 07-07-2020 18:51

  
Oversight image

While the term is commonly used in the context of government, checks and balances are implemented in various procedures in any workplace to reduce mistakes and prevent unwarranted actions. Without these safeguards, a business leaves itself open to theft of money and supplies.

Checks and balances can be implemented for almost any function performed at a veterinary clinic, from basic actions to more sophisticated procedures. A system of checks and balances is designed to verify that operations are done correctly and thoroughly and ensures that all who are involved are held accountable.

Veterinary managers have significant responsibility for clinic monies. To gain the owner’s trust, managers must validate their actions and provide assurances to the owner that all monies are accounted for. Managers who introduce checks and balances can allay an owner’s fears and apprehensions about embezzlement and other concerns that often come with learning to trust an employee with the clinic’s income and finances.

Consider these actions to provide checks and balances in the practice:                                                                                          

Statements should be reconciled every month.

Whether it’s a bank account statement or a veterinary account like Zoetis, invoices, packing slips, and receipts should be retained to document all transactions listed on the statement. Once reconciling is completed, initial the statement displays to indicate that the content of the statement is accurate and include confirmation of all purchase activity.

Quickbooks

QuickBooks should only be handled by the owner, the practice manager, and/or a bookkeeper.

If an outside bookkeeper utilizes QuickBooks, the practice manager should also have access to all areas of the program. Voided and deleted items should be reported, investigated, and explained each month to ensure finances have not been adjusted. Comparing the current month’s profit and loss statements with the month prior and reviewing any changes with the bookkeeper will help guarantee that no alterations occurred.

Payroll

Payroll access should be limited to the owner and the practice manager. Before submitting payroll, the practice manager should review all employee entries and make necessary corrections. If the owner does not yet fully trust the practice manager, s/he should audit payroll as well until s/he feels comfortable with the manager taking on these tasks.

Inventory

Inventory is a significant source of income for a veterinary hospital and miscounting can raise suspicions of theft. Most clinics perform one extensive inventory count at the end of each year, but to avoid overlooking possible inventory fraud, it is prudent to count on a monthly or quarterly basis

So why have a system of checks and balances?

Practice owners are busy. Monitoring accounts and practicing medicine while overseeing a clinic can be overwhelming. When preoccupied with other priorities, account statements, pro salary figures, or other essential information can fall through the cracks. That is why practice managers play such a pivotal role in the practice. They can assist owners by reviewing reports, red flagging questionable numbers and inconsistencies, and informing owners of problematic issues.

When errors occur, managers have a responsibility to keep owners apprised of these mistakes and any corrections that have been made. If the discrepancy is intentional, that is fraud and manager must report it to the owner or s/he can be deemed culpable. The VHMA’s Code of Ethics states that managers will “Protect the employer's funds and property under my control.” It is a manager’s duty to the owner and the profession to adhere to this code of conduct.

Failing to act on this information can result in lost profits for the clinic and/or termination of the manager or other employees. Termination under these circumstances can damage a manager’s reputation and future employment prospects. Managers who are complicit in the reporting of false numbers can be reported to the VHMA Board and risk legal action against them.

A system of checks and balances contributes to a profitable clinic, greater efficiency, and ethical staff. If all operations in a structured protocol are adhered to, managers can avoid difficult ethical situations. As a rule, managers should strive to be honest, share all information with owners, and make a stellar reputation their ultimate goal.

Posted on behalf of the Ethics Committee.


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