Dear Dangerously in Love with Finance,
I never thought I’d be in this position. I built my medical spa from the ground up—four treatment rooms, a dedicated team of six, and five years of blood, sweat, and microcurrent facials. I love what I do. But lately, there’s been this gnawing feeling in my gut, a whisper telling me something’s off. I’ve noticed little discrepancies—sales numbers that don’t quite match up, cash deposits that seem… off. I don’t want to jump to conclusions, but I also can’t shake the feeling that I’ve been too trusting—too hands-off when it comes to my finances.
Here’s the hard truth: I never really dig into the numbers. My bookkeeper emails me a profit and loss statement once a month, and I skim it like a rushed client glancing at our service menu. That’s it. No deep dives, no real oversight. I trust my team—but trust without verification? That’s where I may have gone wrong.
I don’t want to play detective, but I also can’t afford to ignore red flags. How do I get ahead of this before it turns into a bigger problem? What steps should I take to lock down my financials and protect my business?
— Second-Guessing in the Spa Chair
Dear Second-Guessing in the Spa Chair,
First of all, trust your instincts. If something doesn’t feel right in your financials, it’s time to take a closer look. Fraud in medical spas—just like in any cash-heavy, service-based business—is more common than many owners realize. The good news? You don’t need to turn into a financial detective overnight. Instead, you need to implement strong internal financial controls to protect your revenue and ensure financial management for your medical spa is airtight.
Here’s how:
1. Tighten Up Cash Handling Procedures
If your medical spa accepts cash payments, make sure you have a clear cash-handling policy. The person collecting cash should not be the same person depositing it in the bank. A common fraud scheme in spas involves employees pocketing cash payments and not recording the transactions. Implement a daily cash reconciliation process where deposits are verified against transaction reports.
2. Implement Dual Approval for Financial Transactions
Don’t give one person complete control over your money. Whether it’s paying vendors, issuing refunds, or handling payroll, require dual approval. If your office manager is sending out payments, you or another trusted team member should review and approve vendor payments.
3. Review Financial Reports Monthly (and Actually Look at Them!)
Glancing at your profit and loss statement once a month isn’t enough. You need to regularly review your sales activities, bank reconciliations, balance sheets, and accounts payable/receivable. Look for red flags such as duplicate payments, vendor invoices you don’t recognize, or discrepancies between sales and deposits.
4. Use Secure Access and Role-Based Permissions
Your medical spa’s EMR software should have user roles and permissions to ensure employees only access what they need. For example, your front desk team shouldn’t have access to modify invoices or process refunds without approval. Using software with an audit trail can also help track any suspicious financial activity.
5. Monitor Gift Card and Membership Sales Closely
Medical spas often experience fraud related to gift cards and memberships. Employees might issue gift cards to themselves or apply “discounts” to services and pocket the difference. Regularly audit your gift card balances and ensure all promotions align with legitimate transactions.
6. Hire a Fractional CFO or External Accountant for Oversight
Sometimes, an owner is too close to the business to spot fraud. Hiring a fractional CFO for your medical spa or working with an external accounting firm, like Healthy Bodies of Finance, ensures a second pair of eyes reviews your books. A CFO can implement strong financial management systems, create fraud prevention strategies, and provide financial oversight so you can focus on your clients.
7. Encourage an Ethical Workplace Culture
Fraud often happens when employees feel underpaid, overworked, or unappreciated. Creating a transparent and ethical workplace—where employees know fraud will not be tolerated—can reduce the temptation to commit financial misconduct.
8. Conduct Surprise Audits
Random financial audits keep employees on their toes. Knowing that financial records will be reviewed at any time discourages fraudulent behavior. These audits can focus on cash handling, expense reimbursements, or vendor payments.
9. Educate Yourself on Common Fraud Schemes
As a medical spa owner, you don’t need to be an accountant, but understanding basic financial controls can help you spot red flags before they become major issues. Learn about billing fraud, payroll fraud, and skimming schemes common in service-based businesses.
10. Use Technology to Your Advantage
Accounting software with real-time reporting and AI-driven fraud detection can identify inconsistencies in your transactions. If you’re still using outdated or manual bookkeeping methods, it’s time to upgrade.
Mindful Thoughts
Preventing fraud in your medical spa’s financial management isn’t about paranoia—it’s about smart business. By implementing internal financial controls, reviewing financial statements regularly, and working with a CFO, you’re not just protecting your medical spa—you’re setting it up for long-term financial success.
The most important thing? Start today. Make financial transparency a part of your business culture, and don’t wait for a major loss before taking action.
Stay financially savvy,
Lots of Love, Coffee and Chocolate…….Dangerously in Love with Finance
Take Control of Your Medical Spa’s Finances with Healthy Bodies of Finance. Fraud prevention starts with strong financial leadership. At Healthy Bodies of Finance, we specialize in accounting, bookkeeping, and CFO services for medical spas, ensuring your business is protected from fraud while maximizing profitability. Whether you need a fraud risk assessment, internal financial controls, or financial oversight, we’ve got you covered.
Don’t wait until it’s too late—schedule a consultation today and take proactive steps toward a financially secure and thriving medical spa.
This article is designed to provide information only and should not be considered legal or tax advice. Because of the complexity of the law and the variables in your own personal tax and accounting situation, you can’t rely on our advice specifically related to your unique circumstances. In order to get the best tax savings and legal advice available to you, you should consult with your own accountant, attorney or advisor regarding your particular facts and circumstances. Healthy Bodies of Finance is an accounting firm that specializes in working with health and wellness providers. We provide monthly accounting & bookkeeping services and financial education. For more information on our specialized services for health and wellness providers please contact us at [email protected]