KeepUP™ Blog

4/30/15 3:21 PM

Why You Should Create a Virtual File Room for All Unclaimed Property Records—and How to Do It

by Greg VerMulm


The heart of any company’s system for dealing with unclaimed property is its system for retaining records and documentation. How are your records handled? Where do they reside in your company’s system?

We’re talking about not only customer account and transaction records, but also documentation of reporting and communications between stakeholders—any bit of information or data related to unclaimed property. If you can’t easily retrieve those records, you could be exposing your company to audit risks or inadvertent noncompliance.

Dire consequences aside, a messy system for filing unclaimed property records makes your team less efficient, less cost-effective, less accurate and less sane. The solution we recommend to MarketSphere clients is to create a central repository for retention of all unclaimed property records and documentation: a virtual file room you can keep and secure and access easily.

  • A well-organized virtual unclaimed property file room represents the structure of your unclaimed property policies and processes upon which all stakeholders have agreed; it helps you all stay on the same page
  • One central repository makes it easier to find unclaimed property and more difficult to lose track of it
  • Keeping everything in one place limits access to only the people who need to know, which can prevent fraud, inadvertent noncompliance and unintended audit complications
  • It allows you to keep records in a manner that supports your compliance efforts and ultimately your ability to minimize the negative effects of an audit
  • Well-organized records help you efficiently work with your professional unclaimed property advisor; you can easily and securely transfer records for due diligence and other services, such as exposure assessments and exemption audits
  • Making records easier to find saves time and money, prevents errors and increases confidence in your company’s ability to comply with the law
  • The visual organization of all unclaimed property files helps you see how all the parts of your system fit together, see what’s missing, mitigate problems, and tend to each piece of the system appropriately
  • A virtual file room can be used to help train new personnel; a visual map of unclaimed property records makes it easier to understand, remember and plan
  • Not least importantly, a virtual file room for unclaimed property proves the willingness of your organization to comply with the law; depending on the circumstances, in the event of an audit this can work in your favor to keep assessments down
  • If you are audited, complete and researchable records reduce the likelihood an auditor will go digging for property or documentation, when more questions might be raised

How to build a virtual file room for unclaimed property records

Every company has a way to file information, from physical file cabinets to sophisticated data management systems. However, even very different technologies have similar basic functions. It’s more important what you keep in your unclaimed property file room than how it’s kept.

The primary challenge is finding your organization’s unclaimed property and moving records from where they are now to your new central repository. You also need to determine what your unclaimed policies and processes are or will be, so you can begin documenting everything and make directories in the virtual file room to match the operational structure.

Step 1: Work with your IT department, quality control, business analysts and others to determine your records capabilities and get recommendations for data migration.

Step 2: Work with unclaimed property stakeholders, including those who manage it daily, policymakers, and your professional unclaimed property advisors, to define or verify your policies and processes, as well as determining what specifically needs to be documented.

Step 3: Migrate the data, create forms and formats for documentation and begin keeping records intentionally to maximize your advantages and minimize unclaimed property risks.

Step 4: Test your virtual file room by executing a variety of fictional or real scenarios to determine whether the system works.

Step 5: Revisit the system setup annually to make sure it still reflects your company’s needs, and make changes to increase efficiency and effectiveness.

This might seem like a lot of work, and it’s true that it will be time consuming for a while. However, your team’s efforts on the front end to complete an isolated virtual file room for unclaimed property records will pay off in many benefits from then on.

Topics: Recordkeeping