Unclaimed property may be a behind-the-scenes business process, but it is surprisingly detailed. It takes a focused, meticulous effort for a company to establish the routines required to successfully administer escheatment activities. Of course, it’s worth the effort to keep the company in compliance and avoid penalties and burdens of non-compliance.
The benefits of being in compliance don’t stop with the department that administers unclaimed property. The nature of the policies and processes is such that the benefits spill over into other departments.
Below are 5 ways unclaimed property functions can benefit other parts of your organization. We encourage you to share these potential expanded benefits with decision makers in your company because they can help justify the functions, funds and resources you need to manage unclaimed property—besides just being good for the company.
#1: Resolving customer accounts
Finding customers and resolving dead accounts reduces escheatment amounts and prevents negative press. However, it also benefits a company in other ways. Whether the effort is made to find inactive clients before or after an account is stale dated, customer contact can lead to the reactivation of customers. Depending on the type of property, it can mean an increase in customer accounts. For the sales department, happy reactivated customers also means potential up-sales. For customer service, making a customer happy can lead to benefits ranging from up-sales and positive testimonials to the cleaning up of records. The marketing and public relations departments also will love positive testimonials they can use for advertising and press opportunities.#2: Cleaning up records
The assessment process, before or during an audit, involves sorting through records with a fine-toothed comb to uncover duplications and other mistakes, ferreting out previously unidentified unclaimed property and establishing clear processes for keeping records clean in the future. It’s easy to understand how this focused attention on records can benefit other departments, among other things correcting mistakes and aligning records in different parts of the company. Unclaimed property records remediation steps might even help lay the groundwork for centralizing accounting and other records.
#3: Training all departments to identify stale-dated records
One of the things that gets organizations into trouble from an unclaimed property perspective is allowing accounts to linger too long without activity. The more time goes by, the greater the potential negative financial impact through penalties and remediation steps. Not only that, when customers are ignored by the company for long periods of time, the less likely it is the relationship can be rekindled. A lost customer or vendor also means loss of a potential cheerleader who could be sharing a positive experience and helping introduce new customers to the company. When unclaimed property personnel train all departments to identify and resolve stale accounts, it not only improves the unclaimed property situation, but helps other departments solve account-related problems.
#4: Installing recordkeeping and process software
Going through the steps of remediating unclaimed property records can emphasize the need to use technology for streamlining records processes throughout an organization. Some unclaimed property software is designed to add automation to the process of identifying and sorting stale-dated records or preparing state reports. An introduction of this type of program to an organization’s leaders can help them understand how similar programs could be a benefit to other business processes. In some cases, unclaimed property activity reveals just how inconvenient or cumbersome an old records system is—and underscores the need for a complete overhaul.
#5: Reducing escheatment
A straight dollars-based reduction of escheatment, which can be achieved through assessment, records remediation, exemption application and other means related to unclaimed property, means dollars can be freed to spend in other areas of the company. At the very least, prevention of dollars flowing out of general accounts means funds won’t have to be squeezed from other departments to cover unclaimed property penalties, interest and past due escheatment amounts assessed through extrapolation.
Visit the MarketSphere Knowledge Vault for more resources to help you manage escheat compliance in all departments of the organization.