KeepUP™ Blog

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.

Your abandoned and unclaimed property staff has spent a great deal of time learning about unclaimed property, exploring different approaches, implementing policies and procedures, and uncovering all stale dated properties in your organization. Suddenly, a critical member of your unclaimed property team announces she is resigning her position. If you haven’t prepared, this situation can lead to stress, confusion and potential losses. The situation is doubly problematic if you haven’t prepared for transitioning ahead of time.

When you reassign unclaimed property duties or bring in new staff to replace those who have left, it can feel as though you’re starting all over from the beginning. What can be done to more easily pass the baton from one person to the next?

Unclaimed property process sustainability

The key to easy transitioning of unclaimed property duties lies in preparation, procedures and records management.

• Team approach. Make sure unclaimed property knowledge for your company is not held by only one person. It’s important to take a team approach, so team members can support one another under any number of circumstances. You may go so far as to assemble an unclaimed property task force with cross training that makes it possible for task force members to fill in for each other. When you lose personnel, this will help bridge the gap until a new person can be identified, hired and trained.

(This blog entry is an excerpt of Don DeCelles’ introduction to MarketSphere’s e-book, The Invisible Plan: Navigating and Negotiating Unclaimed Property for Least Impact.)

Many tax, treasury, accounting and compliance functions within a company are carried out behind the scenes. C-suite leaders might be unaware of them as long as those activities perk along without causing major problems. In many companies, unclaimed property is one of those kinds of functions. However, with enforcement increasing and the number of audits rising, it might be time to think about getting your organization’s C-suite involved. Doing so can be easier said than done. This blog includes tips for approaching leaders, explaining the importance of unclaimed property and garnering their support.

Two of the most common concerns related to unclaimed property are the risk of noncompliance and the cost of complying. These two concerns conflict. You can spend significant sums of money to make sure you comply—getting records perfect, assigning a staff member to master state statutes, performing better-than-expected due diligence, and executing reports. However, spending all that time and money can defeat the purpose of ensuring compliance, which is to avoid the financial burden of penalties, interest and past-due escheatment.

By contrast, in an effort to reduce escheatment amounts, you can look for every possible exemption and deduction. Costs might go down, but if you go too far you could risk noncompliance.

Sometimes it does not pay to be a shrinking violet.

It’s tempting to be timid and minimalistic in management of abandoned and unclaimed property, because holders often believe it’s more advantageous to stay “under the radar” with states and auditors. There’s no doubt, that’s one important tactic for holders in certain circumstances. Unclaimed property efforts are most successful when they result in minimal impact on your holder company.

However, at times, there’s more to be gained from being assertive—even aggressive—in management and defense of your unclaimed property situation.

Your professional unclaimed property advisor can help you determine confidently when you should minimalize efforts and when you should spring forward aggressively. In the meantime, think about the following general areas in which you could find yourself facing a need to be aggressive.

Finding a professional advisory team to support your efforts can be one of the most effective management decisions you make as unclaimed property lead in your company—and it can result in the best possible outcomes for your organization. Once you make the decision to hire a consulting company, begin thinking how you will vet the options. The following list of questions will help.