This blog was last updated on February 23, 2021
Most companies only worry about unclaimed property reporting when it is time to report their dormant records to the state. While this might ensure that your company is being compliant, is it really the most economical way for your company to manage their escheatment liability?
More and more companies are focusing on the due diligence/pre-escheat aspect of unclaimed property reporting throughout the year and not just at reporting time. These companies are trying to clear the dormant items before they reach the point of escheatment and for good reason. They are trying to change a former liability into a potential revenue stream. Locating missing owners through required due diligence letters is just the tip of the iceberg for some companies. Locating a missing former customer can be a boon for companies trying to expand market share by finding someone who has already bought from them in the past and may buy again in the future. Non-Profit organizations can locate past donors. Colleges and universities can find missing alumni to build goodwill, and then be able to reach out to them for future capital campaigns.
Finding property owners can reduce or even eliminate the amount of property remitted to the states while building goodwill for the company. Those companies that focus on their escheatment compliance throughout the year are better positioned to be able to locate missing owners before those properties reach the escheatment point, and possibly are able to rekindle a lost business relationship at the same time. Establishing policy and procedures for your due diligence requirements is the first step in turning this potential liability into a possible revenue stream. So before you focus solely on the reporting aspect of your unclaimed property compliance, remember that it is just as important to make sure you are performing your due diligence requirements, not only because it’s the law, but because it has the potential to impact your bottom line as well.
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