Best of Tech: 3 Ways to Prevent Embezzlement With Your Membership Plan

By Brett Wells, DDS, Founder, Dental HQ

Dental practices have long been victim to employee embezzlement, an astonishingly common practice across the industry. 

This happens most often due to unsupervised balancing of the books, or incomplete supervision, via a practice’s patient management system (PMS). Employees can steal directly from the daily deposit or can mischaracterize payment types to disguise theft. 

Recently membership plans have developed a reputation for being more open to employee embezzlement. While technology is powerful for automating financial aspects of the dental business, these technologies, including membership plan management software and patient management systems, can leave your practice vulnerable to employee embezzlement.

However, dental professionals can build systems to safeguard their membership plan – and their dental practice – from employee embezzlement. The following three best practices can help.

1.  Create a unique membership plan and fee schedule

Create a new fee schedule in your PMS called “Membership Plan,” or however you want to designate patients enrolled in your membership plan. Add a membership plan to your PMS to match to your plan’s fee schedule. The plan’s included services should be entered as $0 dollars. The non-included services should be entered at the discounted rate, as applicable.

This best practice reduces the need for manual adjustments, when employee embezzlement is more likely to occur. In other words, the more manual adjustments needed, the more likely embezzlement can occur.

2.  Assign each member to your membership plan in the PMS and update regularly

This is done by assigning patients as members to the correct Membership Plan in your PMS. Patient’s membership status should be checked monthly as well as during appointment verification prior to their appointment. If a patient is no longer an active member on your plan, they should be removed from the membership plan fee schedule assignment. This same process applies to adding new member patients as well.

Cross-reference your membership plan software or in-house database with your PMS for accuracy.

The point of this best practice is to prevent non-members from receiving free or discounted services by accident. Such an occurrence may not technically be categorized as embezzlement, but this is still another way your dental practice can lose money that can be avoided.

3.  Limit payment types to third-party transactions 

Accepting cash, checks, and credit card payments in-office can leave your practice open to risk of fraud and embezzlement. Limit payments accepted for membership plans to credit card/ACH payments through verified and trusted third-party software.  

If in-office payments must be taken, then we strongly recommend implementing significant oversight throughout the process. Try to limit having multiple points of entry for payments, as this can create obscurity that can open you up to embezzlement. 

Follow these best practices to set up your membership plan for success – not theft.

We’ve created an Embezzlement Prevention Guide with two more Best Practices and further detail to help you best protect your practice and your membership plan – download the guide by visiting Also, if you’d like to discuss how your practice can run an effective membership plan while protecting yourself from embezzlement, I’d love to talk to you. Contact me at [email protected]