When a veterinary practice is busy but somehow less profitable than it should be, most owners check rising costs, insurance reimbursements, or slow-paying clients first. Certified Public Accountants (CPAs) who work with veterinarians say there is a more uncomfortable possibility worth ruling out: an employee.
Bell said this during a July 10 session at AVMA Convention 2026 titled "Guarding the Vault: Minimizing and Detecting Employee Fraud," as reported by AVMA News.
Small Practices Carry the Biggest Risk
Small businesses, defined as those with fewer than 100 employees, lose more to occupational fraud than any other size category, a median of $126,000 per case, according to the Association of Certified Fraud Examiners' (ACFE) 2026 Report to the Nations, which analyzed 2,402 occupational fraud cases investigated worldwide. Organizations lose an estimated 5% of revenue to fraud every year, and more than half of those cases trace back to a lack of internal controls, or an employee simply overriding the controls that did exist.
The longer someone has worked at a practice, the more expensive their fraud tends to be, according to the report.
Why Controls Protect the 80% Who Would Otherwise Stay Honest
Mira Johnson, a CPA at JF Bell Group, referenced what fraud examiners call the 10-10-80 rule during the same session: 10% of employees will never steal regardless of opportunity, another 10% will steal if given the chance no matter what controls exist, and the remaining 80% are honest under normal conditions but become a risk when financial pressure meets an unsupervised opportunity.
The point is not to suspect any one person but to examine whether the systems a practice has in place would catch a problem before it compounds. Bell recounted one client whose practice manager pocketed cash payments, altered client records to hide it, and used vendor rebate checks to cover the missing revenue. That kind of scheme is only possible when one person controls too many steps of a process without independent review.
A few concrete checks the session recommended for any practice, regardless of size:
- Have someone independent of daily operations review credit card statements, with every charge tied to a receipt and a documented business purpose
- Periodically confirm that ordered goods actually ship to the practice, not to another address
- Avoid concentrating financial duties like billing, deposits, and reconciliation in a single person's hands
- Treat long tenure as a reason for more oversight, not less, since familiarity with a system's weak points is what makes veteran fraud more costly
Preventing this doesn't require assuming the worst about any one employee. It requires the same discipline practices already apply to clinical protocols: a second set of eyes, a documented process, and a system that does not depend entirely on trust to catch a problem before it becomes a six-figure one. It's the same category of hidden cost explored in what being short-staffed actually does to a practice's bottom line: easy to miss on a P&L until someone finally adds it up.