Are you a new business trying to wrap your head around your obligations regarding Unclaimed Property? You may be an established business that has struggled to understand and meet the requirements for reporting your unclaimed property. Or are you simply too busy, and dealing with your company’s unclaimed property is something you would like to take off your plate? In any of these situations, outsourcing your unclaimed property reporting can benefit your business.
What is Unclaimed Property and its Compliance?
Unclaimed (or abandoned) property are financial assets left unclaimed by their rightful owner for a definite period of time. This period of inactivity is called the “dormancy period,” and the specific length of time varies by state. Once a property enters the dormancy period, it is the business’s responsibility, by law, to make a diligent effort to contact the rightful owner. When a property has both reached its dormancy period, and the owner has yet to respond to any attempts for communication from the company, it is then classified as unclaimed.
Some examples of Unclaimed Property:
- Refunds
- Accounts Receivable/Credits
- Matured insurance policies
- Uncashed payroll checks
- Stocks and uncashed dividend checks
- Checking and Savings accounts
- Certificates of deposit
- Gift cards
- Accounts Payable
- Contents of safe deposit boxes
Unclaimed property compliance is a process that is legally required for all businesses in the United States. The start of this process requires companies to search their records to identify any unclaimed property regularly. If any is found, the company is responsible for diligently contacting the rightful account owners during the dormancy period. Then once the property is officially classified as “unclaimed,” the company must turn it over to the state of the owner’s last known address. Keep in mind that the state never takes official ownership of the unclaimed property – they merely hold it until the rightful owner (or heir) comes forward.
The Numerous Benefits of Outsourcing Unclaimed Property Compliance
Simply knowing what unclaimed property is, and that it needs to be reported, is not enough for businesses. It’s crucial for organizations to adhere to the proper procedures and regulations for managing unclaimed property correctly, which is different for every state. Non-Adherence to the laws can lead to severe repercussions, with few statutes of limitation for audits. Therefore, businesses must ensure that their unclaimed property is taken care of accurately and on time or risk hefty penalties and/or interest assessments. State unclaimed property departments have been stepping up their efforts in enforcing unclaimed property compliance.
Outsourcing compliance for your company’s unclaimed property has numerous benefits. At Dunbar, we eat, sleep, and breathe solutions for Unclaimed Property.
Here are six examples of benefits that working with an unclaimed property compliance company could provide to customers like you:
- We’ve found that the most significant pain point for companies handling their unclaimed property reporting is keeping up with changes to state rules and regulations. Outsourcing to a company solely focused on unclaimed property eliminates this stress and guarantees compliance with all 50 states’ complicated laws.
- When and if questions arise with a state, outsource professionals will be your liaison with the state departments.
- By outsourcing specific tasks to experienced professionals, businesses can significantly reduce their corporate risks and liabilities. In addition to this, outsourcing can also help to maximize efficiency and minimize expenditure. Professional outsourcing services offer the peace of mind of doing the job right, with less hassle and fewer resources. This makes it a valuable strategy for many companies in cost-saving and risk reduction.
- Many companies handling their unclaimed property reporting requirements do so manually, which is very time-consuming and labor-intensive. Outsourcing automates and streamlines this process, thus saving your company significant money in labor costs.
- When reporting unclaimed property, specific software is needed to generate reports in the format mandated by each state. Outsourcing can usually be less expensive than purchasing this required software. It is important to remember that the quality of output this software produces heavily depends on the input provided. If the input information is accurate and reliable, the output will comply.
- There is a lot of turnover within companies regarding unclaimed property responsibilities. The task tends to be passed from one inexperienced employee to another, relying on limited training based on only a few written procedures. Often, these written procedures need to be updated – a considerable risk to your company. Outsourcing will allow current employees to focus on their core competencies.
Why choose Dunbar as your Compliance Outsourcing Provider
Dunbar is a reputable provider of unclaimed property compliance services, offering a comprehensive suite of solutions to help organizations and remain compliant with all applicable laws. With a professional team with decades of experience, Dunbar is the ideal choice for businesses seeking a reliable and knowledgeable provider for their unclaimed property compliance needs.
