Embezzlement Prevention Through Dentrec Technology

In this episode of The Dental Boardroom Podcast, host Wes Read, CPA CFP®, is joined by Myles Davis, founder of Dentrec—a platform designed to bring clarity and consistency between dental practice management systems, bank accounts, and accounting software like QuickBooks.

Wes and Myles explore the common yet often overlooked issue of reconciling collections data with actual deposits. They dive deep into how disorganization or gaps in reconciliation can lead to embezzlement, financial misstatements, patient trust issues, and inefficiencies in team performance tracking.

Myles shares how Dentrec is helping DSOs and solo practices alike automate reconciliation, allocate deposits correctly (especially across multiple offices or tax IDs), and keep all systems—from PMS to bank accounts to financials—in sync. Learn why this simple yet powerful solution is transforming dental practice accountability, financial health, and team transparency.

Key Points

• Dentrec helps reconcile collections data from PMS (like Open Dental, Dentrix, Eaglesoft) with actual bank deposits and QuickBooks.
• Lack of reconciliation can lead to embezzlement, financial misstatements, tax underreporting, and loss of patient trust.
• Dentists often don’t catch missing funds or misallocated deposits due to lack of time, process, or tools.
• Dentrec is especially useful for DSOs with centralized banking or shared TINs across practices.
• Automation and accountability reduce human error and increase practice efficiency.
• Embezzlement remains alarmingly common—40% of dentists experience it at least once.
• Dentrec also tracks whether payments were correctly posted to patient ledgers.
• The “fork test” analogy shows how disorganized workflows cost teams time and money.
• Aligning PMS, financial reporting, and bank data helps owners stay informed and in control.

Episode Transcript:

Wes Read: Welcome everybody to another episode of the Dental Boardroom podcast. It's Wes Reed, host, CPA, CFP. Today I have on the show, Myles Davis, founder of a company called Dent Rec. And what Dent Rec does is it helps create reconciliation or symmetry between the practice management software collections and your bank account. Welcome to the show, Myles.

Myles Davis: Thanks for having me.

Wes Read: So this is something I've confronted since I started in dental—as a CPA and as a financial advisor—is trying to make sure that what the day sheet says in the practice management software, whether that's Eaglesoft, Dentrix, Open Dental... there's a sheet at the end of the day that says, “Here’s all of the deposits by Visa, MasterCard, Discover, American Express, Insurance, Cash Payment, yada yada.” Here's all the forms of money that have come in that should hit the bank account. You're also gonna see CareCredit on there as well, and any other third-party financing companies you use to collect payment from patients.

Now, in the beginning, I always tried to have the office manager—somebody in the dental office—enter into the accounting software, QuickBooks, what the collections were expected for that day by each of these categories. And then we would make sure it mapped out to the bank. Unfortunately, what I found is it took a dramatic amount of time to do that. For reasons I’d love for you to share—why it's sometimes difficult to do that reconciliation between the practice management software and the bank account.

But here's what I will say is the problem that results when you don't do this is, number one, theft or embezzlement, which is absolutely ubiquitous in dental practices. Unfortunately, even the most trusted front office managers—and oftentimes it is the most trusted office managers—tend to be the culprits. Which again, is very, very common in dental offices. And there's many ways that embezzlement occurs, but a lot of those ways—not all of them—a lot of them can be prevented if there's this reconciliation. And if the doctor is looking at credits, chargebacks, things like that to make sure they are all valid.

So theft or embezzlement. The second problem of not reconciling these two is financial misstatements. If I'm preparing financial statements based on what hits the bank, which is what we do—and most accountants do—because dentists are cash basis taxpayers (not accrual basis taxpayers), then all we need is what hits the bank. And for me as a financial planner, what I have to work with is what hits the bank. So if it never hit the bank, even if it was supposed to, then we're not reporting it on our financial statements. We're not able to fully assess the economic health of the practice. We're underreporting in taxes, and we don't have that financial insight into what we should be collecting. And of course, the worst part is just that you don't have that dollar in your account now to pay your bills, debt, savings, and yourself.

So, financial misstatements, tax reporting—I mentioned that. I would also say inaccurate performance tracking. If you have certain bonuses maybe for your team around collections, that can be misrepresented. And also just patient trust and billing errors. When there are billing errors and you follow up with a patient, and the patient believes it was paid—but the system is saying it wasn’t paid—and that occurs because of an error or embezzlement, that just reduces trust in the system and you as a business owner.

So those are some of the main consequences of having a lack of reconciliation between the practice management and the bank account. I always say there's three things that should align: the practice management software, the bank account, and the QuickBooks file or the financial reporting. If those three things reconcile, you're preventing a lot of unintended or unwanted consequences in the revenue cycle management—from errors and embezzlement.

Now enter Dent Rec, your company. Go ahead and kick us off. Where did you spot this as a significant need, and how are you now attempting to solve that issue with your technology?

Myles Davis: So I'm gonna take you back a little bit. For the last 10 years, I've been an accounting software solutions consultant. Basically, I work with large DSOs and help them build out their tech stack for their in-house finance and accounting teams. There's a big gap between what's going on in rev cycle and what's going on in the accounting department. So Dent Rec was born to solve a lot of the issues between those two departments for my clients.

Before we talk about the embezzlement piece—which is also a big reason we created Dent Rec—I want to highlight a couple of others. With the groups, a lot of them would bank with what I call a central bank account, meaning one bank account for all of their offices. The accounting department was having a very hard time understanding which deposit related to which practice. They’re all coming into one account. So Dent Rec—we built that to solve that issue.

We also built it out for groups that are billing under a single taxpayer ID, where they would get a single EFT, let's just say it was Delta Dental, for a thousand dollars. That could be for two offices, 10 offices, whatever, and we needed to help them allocate those specific transactions.

You hit on the obvious, which is embezzlement. 40%—what the ADA says—of dentists have been embezzled, and 18% have been embezzled more than twice. It’s an alarming rate, and I believe the process Dent Rec provides is just this constant watchful eye on the team. The team knows there’s a process in place, things are being looked at, and it’s a deterrent from some of the easiest, most common, and preventable ways to skim cash.

But Dent Rec also goes the other way—it’s not just about what’s in the PMS, does it hit your financials, and does it clear the bank—it’s also about holding your team members accountable. Did they post the payments into the patient’s ledgers?

Myles Davis:
A lot of times I’ll work with a client, and there’s all this money that has been deposited that they have not recorded to their patient’s ledgers yet. How would the doctor know? How would the owner know? There’s just… it’s just trust. And it’s shocking to see people being four weeks, six weeks behind on these postings. And that disrupts a lot of things—like you mentioned before—billing statements to patients, resubmitting, doctor compensation (if they’re paid on collections and that money’s already been posted to the account).

The analogy—and it’s a silly one—is it’s like the fork test. At home, you go to your dishwasher and you don’t know if it’s been run or not. So you pick up a fork, you smell it, and say, “Was this washed?” That’s what’s happening in these dental practices all the time. It’s a waste of time. Staff are looking into claims—“Was this already paid?”—and they’re just wasting time. Everyone’s wasting time. And let’s just automate this, put a process around it, and get all three systems to check and reconcile so everyone can be on the same page. That’s really what we’re doing with Dent Rec.

Wes Read:
So this doesn’t surprise me that this is an outgrowth of more institutionally-run dental offices—i.e. DSOs—because they’re hyper-focused on processes, business, tech stack, and controls to prevent errors and embezzlement. And so there are actually many business focuses or tech solutions that originate out of the business side of dentistry that can then benefit the private office as well, which is I think what’s happening here. You've taken something sourced as an issue in a bigger organization and are now making it available to private dental practices.

Something I think they should take advantage of, because we at Practice CFO—in the early days—attempted to do this. We would give our clients access to our accounting software. The front office staff—usually, sometimes it was a spouse—would every day enter in the day sheets: total Visa, MasterCard, Discover, CareCredit, cash, checks, etc. Then when we would reconcile, we would get the bank and make sure everything landed. But there were so many mismatches, mapping errors, and problems. It literally quadrupled the amount of time it took to close the financial statements. And so I would have to charge more. I couldn’t sustain the cost, because when an accountant can only do 25% of the work due to all the reconciliation, then they’re a quarter as efficient.

Clients were not willing to pay for the extra human labor that took. Now what you’re doing is saying, “I can actually provide a solution that’s inexpensive and largely automated—not entirely, but mostly—to make sure reconciliation is strong.” And I’ve been looking for a technology like that for a long time. There’s definitely a need in dental offices, given the amount of embezzlement and error that results from this.

You know, there’s a company—I’m sure you’ve heard of it—I had the founder come to an in-person webinar at Practice CFO about five years ago. It’s a company called Prosperident. You heard of it?

Myles Davis:
I have, yeah.

Wes Read:
And I think the founder’s name is Dave. It was incredibly insightful—he went over all the ways dentists are embezzled. There’s quite a few. Employees can get very creative. And I’ve seen it firsthand. I had a prospective client up in Oregon who came to me after she found out she’d been embezzled. She calculated it to be about $350,000 over a 10-year period—by her most trusted employee.

Myles Davis:
I want to say the ADA says the average—based on extensive studies—is around $250,000. Other studies vary, so don’t quote me exactly, but it’s a significant amount. And it happens over time. You don’t catch it in an instant. It can take years—or never—unless you’re looking. We want to make this more transparent and allow the dentist to have that ability.

Wes Read:
This company, Prosperident, has something on their website called the Hall of Shame. Have you seen that?

Myles Davis:
I have. It’s actually awesome what they’re doing.

Wes Read:
Because it becomes public record when someone is found guilty of embezzlement. What Prosperident has done is aggregate those on their “Hall of Shame.” Some of the amounts are staggering. They stratify them—embezzlers who stole over a million, all the way down to just a few thousand dollars.

But it happens. And not only does it affect the financial condition of the practice, but it ruins relationships. Trust is completely obliterated. And the reason it’s so perpetual is because when a doctor fires someone who’s been embezzling, they don’t want it to be known. They don’t tell anyone. So the embezzler just moves stealthily from one practice to another and keeps doing it—getting more and more effective.

We won’t make this a fraud podcast today, but there’s a whole science and profile around embezzlement. I think that would be a great subject. But let’s stay focused on your tech. If I’m a dentist and I sign up with Dent Rec, walk me through onboarding. What do I as the doctor, or my front office team, need to do to implement Dent Rec properly? And to what extent does it help prevent these issues?

Myles Davis:
Sure. The process is very simple. You start with a short intake form. We’ve learned from working with beta clients that there are lots of nuances between different PMS systems. We want to know what they’re on, their entity structure, how they’re posting payments, what bank they use, and what treasury management system.

It’s not a big intake form, but it tells us a lot. It helps us know if they’re ready to turn on Dent Rec immediately, or if we need to clean up some internal processes first. I’m a big process guy. I believe Dent Rec is just as much about process as it is about technology.

Most changes—if needed—are very minor. And we explain why each is important. Then we get buy-in from the team. We also build a depository policy for the office to post at the front desk, because we know there’s staff turnover. That way, the process is followed long after someone exits.

The mapping is typically done in a quick 30-minute Zoom call. From there, they’re integrated. Then, all the front desk does each day is drag and drop the day sheet into Dent Rec. It’s a simple process. Run the deposit slip at the end of the day, save as PDF, drag it in.

Dent Rec extracts the info, applies the mappings, and sends the data to the accounting software. That’s the process in a nutshell. Pretty easy.

Wes Read:
Let’s pause there and I’ll follow up with the rest in the next message.

Wes Read:
And then how reliable are you finding the feed into QuickBooks? Because you’ve built an API with QuickBooks, right? So the front office prints the day sheet as a PDF, drags and drops it into Dent Rec, and then Dent Rec feeds the data into QuickBooks—the ledger of those deposits. Then, when the accountant reconciles with the bank, it's a simple mapping.

If Dent Rec feeds the data in such a way that it matches easily, then the exact deposits per day should match what hits the bank account, making reconciliation easy. So how smooth is that reconciliation between QuickBooks and the bank statement, based on what Dent Rec is feeding in?

Myles Davis:
If the process is ironed out, it’s extremely high. I’d love to say 100%, and in many cases it is. Maybe it's 97–98% depending on the situation. But if the process isn’t followed, then it could be problematic.

I’ll give you a quick example. We had a client using Zelis for their EFTs. Zelis helps you get set up with multiple insurance EFTs, but they take a 2.5% fee. You have the option to deposit at gross or net. If we weren’t informed that they were depositing net of fees, and Dent Rec expects gross, every one of those transactions would mismatch.

Interestingly, that client didn’t even realize they were being charged 2.5%—so this process also revealed some cost savings. But again, if we talk through the process up front, we usually see 97–100% matching.

Now, there is naturally a lag between when day sheet data posts to QuickBooks and when some deposits clear the bank, and that’s okay. Those are just deposits in transit, but we’re watching to make sure they do eventually clear. And we can clearly tell the team what’s missing.

We also have reporting that shows what hasn’t cleared the bank and—just as important—what has hit the bank that we never received from a day sheet.

Wes Read:
Let me ask about that day sheet upload process. Why do you have the front office upload a PDF instead of doing a direct connection with the PMS system?

Myles Davis:
Great question. Direct API connections are nice but expensive. Also, in this world, not everyone finishes their job the same day. Susie might get a call from her kid’s school, leave early, and close out the day later. We don’t want to rely on a scheduler or automated pull.

Instead, we want the team to signal to us when the day is done by uploading the day sheet. That tells us it’s complete. And importantly, it reminds the team that we’re looking. That accountability matters. It only takes a minute to run the report, save as PDF, and drag it into Dent Rec.

Wes Read:
Got it. I have a few follow-up questions on that. A lot of times embezzlement takes place by adjusting the account or the AR, so that the embezzler can pocket money—like cash—but reduce the expected payment in the software.

For example, let’s say a patient pays $100 in cash, but the front office staff pockets it and then adjusts the account down by $100. The day sheet now matches what they deposited, so the Dent Rec upload and the reconciliation all match. Would Dent Rec be able to catch that?

Myles Davis:
No, not in its current form. We’re not going to catch all types of embezzlement. Embezzlement can happen outside rev cycle too—like fluffing payroll hours or paying bogus utility bills.

But to your point—we are working on an enhancement. We’re building a feature that pulls data from the clearinghouse and reconciles adjustments, looking for discrepancies. That’s coming soon, and we’re excited about it.

In the meantime, we encourage clients to do random adjustment audits. Pull four random days a month and check a few EOBs against adjustments. It doesn’t take long, and if the doctor does it—not the staff—that adds a layer of deterrence.

Wes Read:
Yeah, I’ve been telling doctors for years—just let the front office know you’re checking. Even if it’s five minutes a week. Ask questions, even if you know the answer. They’ll assume you’re watching more than you are. And that perception alone prevents a lot of fraud.

I have another idea—does the software send an email digest to the doctor at the end of the day showing any adjustments or summaries?

Myles Davis:
Not yet—but it’s coming. As we build out the adjustments module, one goal is a daily or weekly digest that flags anomalies or changes. We want to surface insights for the doctor and make it obvious when something’s off.

We’re also adding other modules. One we’re excited about is better banking feed data. A lot of front desk staff don’t have access to bank accounts, and doctors don’t want them seeing account balances or personal charges.

So we’re rolling out a Dent Rec banking feed that filters out only EFT payments and pulls trace numbers, making it easy to look up attached EOBs. It's like a to-do list for what to post—and when to post it. The whole ecosystem we’re building is focused on depository management and accuracy.

Wes Read:
I love that, and that’s especially useful for small businesses like dental practices, which are cash-basis taxpayers. Let me pause here and continue in the next message with that explanation.

Wes Read:
So let me just clarify for our listeners: Most dental practices are cash-basis taxpayers. That means you only pay taxes on money that actually hits your bank account. If someone owes you $20,000 on December 31st, but hasn’t paid it yet, you don’t report it as income. That’s different from accrual-basis taxpayers, who report income when it's earned, regardless of whether it’s been collected.

Once a business gets big enough, it typically becomes an accrual-basis taxpayer. But for most dentists, what matters for tax purposes is what goes into your QuickBooks—and that's based on what hits the bank account.

So if you’re not reconciling what should’ve hit the bank with what actually did, you leave yourself open to missing revenue, misreporting income, and all sorts of other issues. That’s why the reconciliation Dent Rec does is so helpful—it brings that financial discipline from larger businesses into a small-business context.

Doctors often ask me, “A patient owed me money, and I didn’t get paid. Can I write it off?” And I explain, “You never paid taxes on that money in the first place—so there's nothing to write off.” It's a tough concept to wrap your head around because they did the work and feel like they’re out of pocket. But since it never hit the bank, and you’re on the cash basis, there’s no tax impact—because there was never recognized income to begin with.

Now let’s talk about cash, because that’s a hot topic. Doctors can be notorious for not depositing small amounts of cash. Sometimes it ends up in their wallet or a drawer. These days, fewer patients pay in cash, but it still happens—especially with older demographics. Sometimes the doctor just pockets it and skips the deposit.

What does Dent Rec do in a situation where the doctor doesn't deposit the cash?

Myles Davis:
We have two workflows for that. First, we can map cash to a separate account—like “Owner Distributions”—so it’s not recognized as income. We can track it separately and still document that it happened.

Second, we also have the ability to suppress certain payment types, so that cash never gets recorded in QuickBooks at all. I’m not a huge fan of that route, but we built it because there was demand for it.

But honestly, we try to educate doctors on why it’s important to deposit the cash. I’ve seen worse—doctors paying associate dentists in cash, and then not having a paper trail for what they paid. That creates issues at year-end when you have to issue 1099s and report compensation.

The right answer is: deposit the cash. Period.

Wes Read:
Agreed. I would also say: cash is the easiest area for theft. If it’s sitting in a drawer, how do you know who took it? And if a patient paid in cash and that’s missing, you have no idea whether it was the staff or the doctor.

And the whole petty cash thing? I really recommend against it. Don’t fund your petty cash drawer with patient cash. If you need petty cash, go to the bank and withdraw it directly. Keep it clean.

Myles Davis:
Yes! 100% agree. Petty cash should be funded from the bank, not the patient. Patient funds should always be deposited. If the owner wants to take cash out after it hits the account, fine. But let’s do it clean.

Wes Read:
Let me add one more thing: If you don’t deposit that cash, and the IRS finds out—especially during an audit—you could be in huge trouble. I have an uncle who ran an A&W restaurant and got audited. He had been skimming cash for years. Once the IRS found out, it nearly cost him his business. He spent $150,000 on attorneys and had to deal with the IRS breathing down his neck for years after.

Once you’re on their radar, you’re not getting off anytime soon. So don’t play that game. Even if it's just $50 a week, deposit it. It's not worth the risk.

Second, you want clean financials. That $50 may not matter to you, but if you're underreporting income, you’re also reducing your practice valuation. If you’re selling your practice or bringing on a partner, you’re shooting yourself in the foot.

And finally, there are way better ways to manage expenses than using cash. Fintech tools like Relay, Ramp, and Fi let you set up virtual and physical cards for your staff, with spending limits and categories. You can create sub-accounts, control access, and track spending without dealing with cash at all.

We use Relay at Practice CFO, and we love it. It’s secure, efficient, and makes accounting easier. Plus, if the accountant ever loses access to Bank of America or Amex, it's a nightmare to restore it. But Relay makes access simple and stable.

All that to say: there’s no reason to deal with physical cash anymore.

Let’s talk briefly about the cost of Dent Rec. If I’m a doctor, and I want to sign up, what’s the process, and how much does it cost?

Myles Davis:
You can go to our website: dentrec.com and fill out a short form. You can also email us at hello@dentrec.com to get started.

Pricing is simple:

• $89/month if you go month-to-month
• $79/month if you commit to a 12-month subscription

Wes Read:
And just a reminder—whatever you're paying Dent Rec, it's tax-deductible. So if your marginal tax rate is, say, 35%, you're effectively paying around $50/month after taxes. The real question is: can this save you more than $50 a month in errors, time, and embezzlement prevention?

Wes Read:
And I’ll add this: Every dentist should treat their practice like a real business—because it is one. That means putting in place the same kinds of financial controls that larger organizations use. Dent Rec helps with that. For the price of a few cups of coffee a month, you get tighter reconciliation, reduced risk of theft, faster close times, and clearer financials.

And for practices already trying to reconcile manually—using Excel spreadsheets, printing day sheets, and emailing them to their bookkeeper—Dent Rec will immediately save time and labor. If you’re paying staff to do this manually, you’re already spending more than what Dent Rec costs.

Even if this is a brand-new process for your office, it’s worth it. Processes drive culture. When your team has clear, repeatable systems, there’s less confusion, less finger-pointing, and better results.

Myles Davis:
Yes, and we’ve actually seen situations where team members quit over manual reconciliation because they didn’t want to do the busy work anymore. Dent Rec automates that. It also becomes more valuable the more you grow. For DSOs or multi-location groups, the ROI is huge.

When you have centralized banking, shared tax IDs, and a centralized accounting team, reconciliation gets really messy. If they’re trying to do location-level financials and can’t easily match deposits to the correct office, it creates hours of extra work.

Our platform helps solve that—whether you’re a solo doctor or a multi-site DSO.

Wes Read:
And one more note for our Practice CFO clients—if you're transferring personal money into the business account, sometimes accountants will mistakenly classify that as income. Especially if it's deposited around the same time and in similar amounts to collections.

Dent Rec helps avoid that. Since it feeds only true production-related collections into QuickBooks, any outliers—like personal contributions—are easy to spot. That prevents accidental over-reporting of taxable income and avoids unnecessary taxes.

We’ve built processes at Practice CFO to check for those errors every month, but this is one more layer of protection.

And I’ll say this too: the effectiveness of any software depends on how well it's implemented. You can have the best tool in the world, but if your team doesn’t use it properly or consistently, you won’t get the value. So build good habits around it. And doctors—don’t disappear from the process. Just letting your staff know you’re watching is one of the most effective forms of control.

Wes Read (closing):
Myles, thanks for being on the show. This was incredibly insightful. For those listening, the website is dentrec.com, and you can email Myles and his team at hello@dentrec.com.

This is an important step toward better financial oversight in your practice. Whether you’re trying to prevent embezzlement, streamline your month-end process, or just sleep better at night knowing your money is where it’s supposed to be—Dent Rec is worth a serious look.

Thanks again for being with us on the Dental Boardroom Podcast.

Myles Davis:
Thank you, Wes. It was a pleasure.