Also often referred to as the separation of duties, the segregation of duties (SOD) can assist dental practices in safeguarding their hard-earned profits by avoiding conflicts of interests. Segregating responsibilities for the various steps in the procurement process (from order to payment) mitigates risk by eliminating the opportunities for theft or fraud that lay within the purchasing cycle.Splitting the functions related to buying between various employees ensures no single person has excessive control over buying activities.Standard practice is to separate responsibility for:
Mitigate your risks by evaluating your distribution of duties for the purpose of identifying the combining of critical tasks with conflicting interests that may arise and open the door to financial losses.Below are some examples of the possible risks that lay within the procurement cycle:
To further clarify, the employee responsible for issuing checks for payment to suppliers should not be allowed to, or be responsible for, the issues of POs and the receiving of goods upon delivery as this would present an enormous opportunity for fraud. For example, the employee could create a fake vendor, confirm undelivered supplies as received, and issue a payment to the said fake vendor.Where the elimination of conflicting duties through SOD is not possible due to a lack of necessary personnel or resource limitations, then mitigating control procedures may be implemented. These controls should:
Here are other best practices that ensure you hold suppliers accountable to agreements, maintain ethical buying practices that protect your reputation and your prices, and drive informed and effective decision-making.
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