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4/25/17 9:56 AM

How to Merge Unclaimed Property with Other Duties

by Jon D’Amato

forewarned-is-forearmed-unclaimed-property.jpgIt can be difficult to smoothly add abandoned and unclaimed property management duties to primary business responsibilities. It’s not simply a matter of squeezing in extra work. Escheatment involves spikes of activity rather than steady work—often at inconvenient times of year when other responsibilities are also spiking (notably when tax returns are being prepared). It doesn’t help that personnel often do not have needed expertise. 

Some of the spikes in work can be managed by cross-training staff to pitch in when needed. Working with outside unclaimed property specialists can help, not only with the extra work of reporting cycles, but also by providing deeper expertise than it’s possible for in-house staff to acquire. This blog will define the challenges of merging unclaimed property work with other duties and provide advice for overcoming the challenges. 

Getting Perspective on Unclaimed Property Workflow Issues 

Year end, quarter end and month end are all peak times for accounting and finance staff in general. Most of the state’s unclaimed property reporting deadlines fall within the same timeframes. For tax professionals, half of the spring unclaimed property season falls exactly into peak tax season. 

On the other hand, unclaimed property management really has to be a year-round endeavor to ensure all supporting records are in place and a plan is followed for accurate reporting. You also need time to lay the groundwork for successfully meeting the challenges of unclaimed property audits. 

Here’s what often happens: Accounting or finance professionals find themselves busy with other duties, then unclaimed property hits their radar and they realize they haven’t completed due diligence requirements—maybe even haven’t done due diligence (pun intended) on what those requirements are! They have to scramble to meet the deadlines, often taking shortcuts resulting in under-reporting or over-reporting the unclaimed property they hold. 

The truth is, when peak reporting time rolls around for abandoned and unclaimed property, it is an intense effort that leaves little time for other duties. 

Rules of Thumb for Managing Unclaimed Property Workflow Spikes 

In our years of work with hundreds of holders, we’ve identified specific rules of thumb we recommend holders follow to manage the inconvenient spikes in escheatment activity. Read through the following list and check off the advice that could apply to your company and your unique unclaimed property situation. 

If you know areas of focus that are causing issues but aren’t contained in this list, contact us for consultation. We probably can give you some ideas immediately, and our experts are prepared to step in and handle much of this activity if would help you free up staff for other important business competencies. 

  1. Conduct a liability assessment to prepare ahead of time for the eventuality of an unclaimed property audit.
  2. Research all possible details ahead of time, such as property type and relationship codes for your company’s unique unclaimed property.
  3. Set up a central repository for all unclaimed property to keep from having to repeat records research.
  4. Include detailed notes in records, showing when they were stale dated and isolated, when attempts were made to contact owners, what was discussed with owners who were located, and the ultimate handling of the record (reactivating the account, cutting a check, etc.)—again to avoid repeated research.
  5. Keep records on resolved properties to prove why they were not reported, as well as keeping records on reported properties. This will become invaluable if you find yourself battling any state audit.
  6. Identify legal exemptions and document them ahead of the reporting cycle.
  7. Spearhead the formation of a companywide unclaimed property committee to monitor unclaimed property throughout to the organization.
  8. Crosstrain personnel from other departments to assist when the workload gets heavy during each reporting cycle. Other departments often cause a dam in your unclaimed property flow, because they are unaware of the process or delivery dates. Schedule monthly meetings to keep everyone up to date with laws throughout the year.
  9. One year in advance, create an actionable calendar of key dates and deliverables for all task items. 

The key is to take a broad perspective that keeps things flowing throughout the year, rather than “saving” unclaimed property and escheatment tasks until you are finished with other common business cycles. Unclaimed property should be taken as seriously as other functions to ensure it doesn’t create perfectly avoidable problems.

Topics: Best Practices, Staffing