In the world of health care, trust is everything. Clients trust you with their appearance, health, and self-confidence. But as a business owner, the trust you place in your team and systems could make or break your financial future, especially when it comes to fraud and embezzlement.

Unfortunately, embezzlement in medical aesthetics is more common than people think. It doesn't always come in the form of some elaborate heist — it's often small, repeated actions that slowly drain your profits. Think padded invoices, pocketed payments, or unauthorized refunds.

Let’s walk through the key steps to help protect your medspa from internal financial risks, including things like embezzlement and fraud.

1. Don’t Just Hire for Skill — Hire for Integrity

Your front office superstar may be amazing on the phone, and your injector might have a waitlist of loyal clients, but integrity is a non-negotiable. Hiring people with strong ethics, verified references, and clear accountability histories is step one in protecting your business. Run background checks — yes, even on people you really like.

2. Separate Duties to Avoid Conflicts of Interest

The same person shouldn’t be booking appointments, collecting payments, AND reconciling the bank account. Spread out financial responsibilities so no single person has full control. This simple step can drastically reduce the opportunity for fraud. Even better, hire an outsourced bookkeeper to reconcile your checking accounts and prepare your monthly financial statements. This external set of eyes can not only catch suspicious transactions, but also be a deterrent because everyone is aware that there is someone keeping an eye on the finances.

3. Embrace Regular and Random Internal Audits

Routine audits are helpful, but random audits are powerful. When employees know that their actions could be reviewed at any time, they’re less likely to take risks. Review your payroll, confirming the hours you’re paying for are the hours worked; review any refunds or adjustments to ensure discounts and refunds are appropriate and correct. Review your financial statements with your bookkeeper—specifically the names of the vendors and the amounts being paid. Watching these items closely, or even spot-checking from time to time, will greatly reduce any opportunities for fraud.

4. Let Your POS System Work for You

Modern point-of-sale (POS) systems can do more than process payments—they can flag unusual activity, track user permissions, and prevent unauthorized refunds. Make sure your system is set up with user roles and detailed reporting features. Also, review your daily reports personally, or have them reviewed by someone not involved in the cash handling process.

5. Create a Culture of Transparency and Accountability

Fraud thrives in silence. Cultivate an open-door culture where employees are encouraged to report suspicious activity—anonymously if needed. Make it clear that dishonesty won’t be tolerated, and back it up by modeling ethical leadership at every level.

6. Surround Yourself with Trusted Advisors

You might be amazing at skincare, lasers, and injectables — but don’t go it alone financially. Hire a bookkeeper, an accountant, and a business advisor you trust. Having extra eyes on the books (that aren’t emotionally tied to your daily operations) helps catch red flags before they become fires.

7. Watch for the Warning Signs

Some of the biggest red flags include:

• An employee who refuses to take time off or let others handle their duties.
• Inconsistencies between cash totals and software records.
• Defensive reactions when financial questions are raised.
• Lifestyle changes that don’t match income level.

Take-away:

Embezzlement isn’t just a financial loss. It impacts team morale, client trust, and your peace of mind. But with smart systems, strong hiring practices, and a culture of accountability, your medspa can stay protected and profitable.

Because a well-run medspa isn’t just about looking good—it’s about being built on a foundation that’s just as flawless as the results you deliver. For help managing and understanding your medspa’s finances, reach out for a discovery call at hello@mavenfp.com.