In this episode of The Business of Practice podcast, Tera Eddleman, an accounting consultant and valuation analyst at Summit Veterinary Advisors, joined us to talk about embezzlement, fraud, and theft in equine veterinary practices.
Fraud and Embezzlement in Equine Practice
Eddleman said most equine veterinarians have no idea how common fraud and embezzlement are in the industry. “The statistics could scare,” she added. The most common ways employees commit fraud, theft, and embezzlement include deleting invoices while pocketing the payment, falsifying accounts payable, using a company credit card for personal expenses, stealing inventory, and fraudulently increasing payroll through unauthorized overtime. Managers with payroll responsibilities might also give themselves bonuses.
Mitigation Strategies
To minimize embezzlement, fraud, and theft, it is important to have internal controls. Most importantly, Eddleman said, “Don’t have one person doing everything.” She went on to note multiple other fraud prevention strategies, including having a CPA look at your books at least once or twice a year.
What To Do if You Suspect Fraud
If a practice owner suspects fraud, theft, or embezzlement, “be discreet about your suspicions,” she advised. Hire a consultant who is familiar with the veterinary industry, and once you have proof, involve law enforcement. Another good tip is to ask your insurance broker if your business insurance policy covers these types of losses. Eddleman also described the most common fraud scenarios she has encountered as an accountant.
Final Thoughts
In closing, she said, “Nobody wants to deal with this!” It’s a huge responsibility as a business owner to be vigilant, but it is a necessity.
About Tera Eddleman
Tera Eddleman, CVA (Certified Valuation Analyst), has deep roots in all financial aspects of veterinary practice management. Since 2010, she has served as a financial manager and accounting consultant for many types and sizes of veterinary practices across the country. She is an accounting consultant and valuation analyst at Summit Veterinary Advisors, a firm that specializes in meeting the financial consulting needs of both general and specialty veterinary practices.
Tera started her accounting career as a staff accountant and auditor for a local CPA firm. From there, she was a cost accountant for a large publicly traded company, managing international accounts. After five years in corporate America, she found her home in the veterinary industry as Controller for Equine Sports Medicine & Surgery in Weatherford, Texas, and later as the Director of Accounting and Finance for Inova Partners. Tera started working for Summit Veterinary Advisors in 2018 and was given the opportunity to purchase the business in 2022. Tera has a BBA in Accounting from Tarleton State University. She is a Certified Valuation Analyst and co-chair of the VetPartners Valuation Council. She is also a Certified QuickBooks Pro Advisor. Tera speaks nationally on monitoring critical financial measures, fraud prevention, and understanding practice value, and she is passionate about making a difference in people’s lives through helping them better understand and manage the business facets of their practices.
Related Reading
- The Business of Practice: Internal Controls for Fraud Protection
- 6 Ways to Improve Equine Practice Profitability
- The Business of Practice: Retirement Plans for Small Equine Practices
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