The Cost of Trust: How Internal Fraud Happens in Private Medical Practices

It usually starts with someone you’ve known for years. The office manager who never takes a day off. The biller who always stays late and the admin who “just knows where everything is.”

They’ve been with you since you opened your doors. They know the passwords, the bank accounts, the vendors, the software, and most importantly, they know you’re busy.

So when something feels off with your finances, you don’t panic. You assume it’s a timing error. A posting delay. A QuickBooks glitch.

Until it’s not.
Until the numbers don’t add up.

And now, you’re trying to trace six months of unreviewed transactions with a growing pit in your stomach.

How Does This Happen?

Fraud in medical practices doesn’t always look like a bold theft.
In fact, it often looks like loyalty.

The biggest risk?
Too much trust, and not enough oversight.

Most independent practices rely on a small team. One person might be responsible for billing, payments, deposits, reconciliation, and financial reporting. That kind of access, with no regular review, creates the perfect opportunity for fraud—even if that’s not how it starts.

It can begin as:

• A “temporary” use of company funds for a personal emergency
  
  

• A vendor payment rerouted to the wrong account
  
  

• A write-off quietly issued to a family member’s balance
  
  

• Or a check made out to cash because no one’s checking the bank feed
  
  

In busy practices where the physician is focused on patient care, these things can go unnoticed for months—or years.

Why Practices Are Vulnerable

Independent and small group practices face unique challenges:

• One-person finance roles: With no separation of duties, errors and misconduct often go undetected.
  
  

• Outdated systems: Manual processes and incomplete financial reports make it harder to catch discrepancies early.
  
  

• Lack of internal reviews: Month-end reviews rarely happen, and reconciliations might not be part of the routine.
  
  

• Overreliance on trust: Longtime employees are often treated like family, which can create blind spots.
  
  

• Busy leadership: Physicians don’t have time to monitor day-to-day financial operations, and they shouldn’t have to.
  
  

The result? Fraud isn’t discovered during routine oversight. It’s discovered during chaos, an audit, a cash flow crisis, or a staff transition.

What Can You Do About It?

Fraud prevention doesn’t mean you stop trusting your team. It means you put systems in place so everyone is protected—including them.

Here’s what that looks like:

1. Separate Duties

No one person should control the entire financial process. The person who cuts checks shouldn’t also reconcile the bank account. The person entering invoices shouldn’t be the only one reviewing vendor payments.

2. Use Accounting Software with Access Controls

QuickBooks Online and other cloud platforms allow role-based permissions. Use them. Avoid giving blanket admin access when read-only or restricted roles will do.

3. Implement Monthly Financial Reviews

Schedule 30 minutes each month to review reports with your bookkeeper. Look at profit and loss, bank reconciliations, and any unusual transactions. This small habit can prevent major losses.

4. Get an Outside Set of Eyes

Having a third-party bookkeeper or advisor provides neutral oversight. It removes awkwardness, ensures compliance, and gives you confidence in your numbers.

5. Build a Financial Workflow That Doesn’t Rely on Memory

Every process—payroll, reimbursements, patient refunds—should follow a clear system, with documentation and sign-offs.

Final Thoughts: Building a Stronger Financial Foundation

Running a private medical practice comes with countless responsibilities—from managing patient care to navigating compliance and staffing challenges. It's easy to push financial oversight to the bottom of the list, especially when you trust the people handling it.

But internal fraud doesn’t always happen because someone sets out to steal. Often, it starts with a moment of stress, a perceived shortcut, or the absence of basic checks and balances. Over time, those gaps widen until the damage is no longer reversible.

The goal isn’t to create a culture of suspicion. It’s to build a practice where systems support trust, rather than replace it. With the right controls in place, your team has clear boundaries, your numbers tell a consistent story, and you’re not left guessing when something goes wrong.

Investing in financial structure doesn’t just protect you from fraud. It gives you the confidence to make better decisions, plan for growth, and focus on what you do best—caring for your patients.

If you’re unsure whether your current setup leaves you exposed, a confidential review can help bring clarity. You don’t have to overhaul everything overnight, but small changes now can prevent major problems later.

Partner with Jeanette Delgado of JD Management Advisory, LLC for Expert Medical Bookkeeping

Implementing these medical bookkeeping strategies will help keep your practice’s finances in order and minimize risks. But balancing bookkeeping with patient care isn’t easy—that’s where expert support comes in.

Jeanette Delgado of JD Management Advisory, LLC specializes in bookkeeping for medical practices, offering tailored financial solutions to help healthcare professionals stay compliant, profitable, and stress-free.

With JD Management Advisory, LLC, you’ll get:
✅ Accurate and up-to-date financial records
✅ Tax preparation and compliance assistance
✅ Cash flow management and forecasting
✅ A hassle-free bookkeeping system so you can focus on patient care

Let’s Make Your Bookkeeping Stress-Free

Don’t let bookkeeping challenges slow down your practice. Partner with Jeanette Delgado today and gain peace of mind knowing your financials are in expert hands.

📞 Contact JD Management Advisory, LLC today to learn how professional bookkeeping services can help your medical practice thrive.

Find The Right Bookkeeper For Your Business

If you've realized by now that finding a bookkeeper is a smart move for your business, the next step is knowing how to choose the right one. Here's why I'm confident I can help:

JD Management Advisory, LLC provides expert holistic bookkeeping services to small businesses and individuals, enabling you to focus on what matters most—your clients and their needs. With over 30 years of experience in business management and support across a variety of industries, I have the knowledge and skills to streamline your financial processes and set your business up for success.

I've been working with QuickBooks since 1996, handling everything from setup, conversion, and maintenance to training business owners, managers, and staff. My strengths lie in cross-functional training, problem-solving, and a deep understanding of business needs.

Let’s talk about how I can help streamline your bookkeeping and set your business up for success. Contact me today to discuss how we can work together and take your financial management to the next level!