Springtime is fast approaching. And, as Finance knows, so are unclaimed property deadlines in many states across the country.
But this spring’s not just like any other. There’s been an increase in auditors working on behalf of states to ferret out noncompliant companies, says expert Michelle Moloian.
Of course, that makes reviewing and sharpening up your unclaimed property practices an urgent matter. Check out four best practices from Moloian to encourage unclaimed property compliance this spring and in the future:
1. Create more awareness
Plain and simple, some employees just don’t know the gravity of unclaimed property compliance. Because Finance deals with escheatment most, it becomes your team’s job to “sensitize” other departments to it.
Consider which communication method your staffers and other employees would likely prefer (e.g., a short info-sharing session, a brief email message). Then use that medium to explain the costly consequences for noncompliance, and remind people to look out for audit letters, invitations for voluntary disclosure programs and other state notices relating to unclaimed property.
You could ask A/P to handle communications, since they typically handle unclaimed property reporting. Or you could deliver it yourself, as messages tend to hit home more when they come from higher authorities.
2. Expand your reach
As with any big initiative, it’s key to get other business leaders’ support.
Be sure your team involves people outside of Finance, like internal legal counsel and executives who oversee high-level risk issues, Moloian says. It can also help to assign an “escheat coordinator” (perhaps a top A/P staff member) to work closely with other teams that have unclaimed property liabilities, such as A/R, Payroll and Benefits.
3. Leave no stone unturned
Often, auditors will try to find “hidden” unclaimed property that companies may overlook. That may include things like liabilities assumed in an acquisition and small-dollar write-off accounts.
To avoid unexpected finds, make sure everyone refreshes themselves on all the different things that could qualify as unclaimed property. The National Association of Unclaimed Property Administrators provides a list of potential unclaimed property that you can share.
4. Develop a timeline
Once you have all the right people involved and all liabilities accounted for, your team needs to focus on meeting the deadlines.
Moloian recommends creating a “compliance calendar” with key process steps and due dates. A visual, which can be digitally shared with relevant employees, will help everyone stay on top of all the different reporting periods and due diligence mailing timelines that are pertinent to your company.
