Challenges of Manual Unclaimed Property Reporting
As companies prepare for audit season, unclaimed property reporting could easily fall through the cracks. When completed manually, the escheatment process for generating and delivering due diligence letters is highly time-intensive for the office of finance. Furthermore, each reporting jurisdiction has control over their reporting requirements, so you need to be prepared, especially larger companies that operate in multiple jurisdictions.
With this in mind, it is not realistic for organizations to track both the laws and required documentation for every jurisdiction and still maintain accurate and timely reporting to remain compliant. Instead, automating your unclaimed property reporting with a proven solution can help remove this manual burden from the office of finance, allowing them to develop and provide greater value to the company. Throughout this blog, we detail the benefits of remaining both efficient and compliant through automation and how this transition can elevate your organization to world-class.
Benefit #1: Stay Ahead of the Curve
When most companies are asked why they chose to automate a process, it’s to avoid a penalty down the line—no one likes a fine or the negative press that accompanies it. Reporting deadlines may vary across states, but they come with penalties for noncompliance just the same. When it comes to escheatment, not only is compliance an issue but also the legality of handling personally identifiable information (PII).
The manual process of mailing letters to property owners could result in incorrect recipient addresses, failure to report property, and especially missed deadlines. Rather than waiting for the auditors to impose a fine because of manual process errors, it’s time to automate your escheatment process. Recently the office of finance has been seeking ways to become more valuable to the broader organization—and adding greater efficiency and decreased risk is a surefire method to accomplish this goal. More importantly, avoiding increased financial burden due to fines/penalties incurred using outdated technology will only help the reputation of the office of finance.
Benefit #2: Spend Your Time Where It’s Needed Most
Beyond avoiding the hassle of fines, automating the escheatment process increases your company’s due diligence. As previously mentioned, each of the 54 U.S. reporting jurisdictions and 3 Canadian provinces have the autonomy to change their individual reporting and remittance requirements. Since due diligence is an inexact science at best, why spend valuable employee time and effort trying to stay ahead of ever-changing laws and administrative requirements?
By implementing an automated solution, the tedious burden of due diligence is eased for your company. One of the most time-intensive areas of unclaimed property reporting is generating due diligence letters. Typically, the letters are produced one at a time and then printed off to be mailed. Using an automated solution, the letters can be generated in bulk using state-mandated templates—removing a huge burden from the office of finance.
As well, the research, analysis, and updated reporting monitoring are all covered by a qualified third-party solution. Handling PII also becomes less of a burden as companies are under increased regulation to provide multi-layered protection through encryption. Finally, internal accountants that need detailed reporting information can be sent monthly, collated updates on state-specific changes.
Modernize with Automation
Reporting on unclaimed property to maintain compliance has been an important process in business for a long time. However, though technology has evolved, the procedures for reporting have fallen behind as they remain highly manual. The office of finance has been limited in reaching its full potential as a value-adding department by expending disproportionate effort on the escheatment process.
To learn more about additional benefits of transforming the escheatment process with an automated solution, download the complete eBook, A Guide to Maintaining Unclaimed Property Compliance.