What’s sprouting up this spring? For Financial pros, it’s unclaimed property deadlines.
Eight states have reporting deadlines in March or April, and two others come later in July.
And even companies that feel confident they have unclaimed property down pat may want to take a second look at their process. States estimate that 70%-90% of holders aren’t fully compliant with unclaimed property laws, reveal the experts at Keane Unclaimed Property.
With such notable noncompliance comes an increase in audits and higher chances of penalties and fines.
But your finance team can take some crucial steps, before and after each unclaimed property cycle, to stay in the “fully compliant” minority.
Before a reporting cycle
Before your staffers get ready to file, see that they:
1. Revisit your unclaimed property policies. Your policy should be a “dynamic document,” Keane says, that’s updated before each cycle with any changes made to your technology systems, staffer responsibilities and roles, etc.
2. Review law changes. You know which states you have to watch – but they’re constantly changing laws and dormancy periods. Before each cycle, have staffers check to see if your states have made changes. Then they can spread the word and adjust accordingly if need be.
3. Account for all types. A/P payments are a big part of unclaimed property, but there are over 100 types (A/R credits, wages, stocks, dividends, health and welfare plans, etc.). It’s a good idea to confirm with the teams who handle these – from A/P and A/R to Payroll and Benefits – that all property types have been covered.
4. Be complete. The first target for audits are those who haven’t filed their unclaimed property. The second target are those who “call attention to themselves” by the way they file. That includes things like sending incomplete reports or inconsistent reports year-over-year. To keep auditors at bay, remind your staffers: Accuracy and consistency are key.
After a reporting cycle
When your staffers are finished filing, make sure they take these follow-up steps:
1. Retain records. Most states have a 10-year retention policy, Keane says. But no matter what, Keane recommends a “long, if not indefinite” retention policy, so you’re always audit-ready. It doesn’t hurt to check over your company’s retention policies and ensure staffers are following protocol.
2. Hold a post-mortem. After each cycle, it’s also important to take time to assess your finance team’s efforts. What pain points or hurdles did they face? What worked well? What needs to be improved for the next cycle? By continually assessing your unclaimed property process, it’ll get better (and easier) each time.
