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UNCLAIMED PROPERTY FOCUS is a blog written by and for UPPO members, featuring diverse perspectives and insights from unclaimed property practitioners across the U.S. and Canada. We welcome your submissions to Unclaimed Property Focus. Please contact Tim Dressen via tim@uppo.org with any questions about submitting a blog post for consideration and refer to our editorial guidelines when writing your blog post. Disclaimer: Information and/or comments to this blog is not intended as a substitute for legal advice on compliance or reporting requirements.

 

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Unclaimed Property Best Practices for Accounts Receivable

Posted By Administration, Thursday, October 17, 2019

Unclaimed property compliance often begins with the accounts receivable department. Regardless of a company’s industry, AR is a common source of potential unclaimed property via credit memos, overpayments, duplicate payments, customer account adjustments, unidentified remittances, accounting errors, promotional credits and discounts, product returns and write-offs. 

 

AR departments can reduce their unclaimed property risk by implementing several best practices.

 

Establish written policies and procedures to ensure that unclaimed credit balances are addressed on a regular basis.

 

Ensure that account receivable duties are segregated to discourage fraudulent activity. No single individual should have control over adding a customer plus the ability to generate credit memos. This reduces opportunities for an employee to create a fictitious customer and issue a credit to that person. 

“It is important to monitor employees’ roles, understand what each role has the ability and access to do, and make sure that there is not crossover that might lead to bad actions,” said Colleen D’Eramo, corporate service specialist with Owens Corning, during a recent UPPO webinar.

 

Update last activity dates to accurately reflect current activity. Maintaining an ongoing relationship with a customer reduces the likelihood of an account becoming dormant. Recording accurate last activity dates is necessary to flag accounts at risk of generating unclaimed property and demonstrates proof of ongoing relationships with customers in the event of an audit. 

 

Follow up on credit balances as they are created. Contact customers to ask whether they want the credit offset against the next billing cycle or refunded via a check. 

“Customers are busy with their day-to-day operations, and credits can be easily forgotten,” said D’Eramo. “If you’re waiting for them to contact you about the credit, it may not happen. The longer credits linger, the more challenging it can be to take care of them because of changing roles and difficulty tracking down the transaction history.”

Include credit balances on all invoices. This practice reminds customers of credits they may otherwise forget and helps demonstrate you are making customers aware of their credit balances in the event of an audit. 

 

Establish a procedure to automatically generate correspondence with customers with outstanding credit balances. Routinely generating a report that flags customers with credit balances of two years or longer, for example, can help you reach out before accounts have to be reported as unclaimed.

 

Include outstanding credit balances in standard due diligence communications. Much like including balances on invoices, this procedure reminds customers of their credits so they can be applied or refunded rather than reported as unclaimed.

 

Implementing these procedures, AR departments have less liability to worry about as accounts age. The goal is to reduce the amount of time credits remain on the books and, ultimately, eliminating the need to consider them for unclaimed property reporting. 

 

 

Tags:  accounts receivable  best practices 

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Tending Due Diligence

Posted By Pete Billows, vice president at UPRR and Cindy Nisley, senior vice president at Georgeson , Thursday, January 23, 2014
Updated: Thursday, January 23, 2014

Due diligence is an opportunity to do more than just fulfill a state-mandated requirement. If your company’s main objective in its due diligence program is to achieve compliance, why not set goals to assume a note-worthy response rate and sustain positive external relations? Due diligence can be more than just a tactic in your compliance plan; it can be a part of your company’s strategic business plan.


Objective: Achieve compliance with state requirements

Due diligence is deemed as the last attempt to unite the owner with their property before it is remitted to the state. As with most things, states have different requirements for due diligence programs, so it’s best to consult with a service provider and/or state administrators. Here are some of the details that vary by state that affect a due diligence outreach:

  • Language required in the letter
  • Format or medium the follow-up can be sent through – mail, email, phone
  • Dormancy periods of property types
  • Timeframe to respond to notice

We’ll be covering the regulatory requirements, state exceptions and the elements of a due diligence letter during the 2014 UPPO Annual Conference session, Tending Due Diligence. Register for the conference happening March 23-26, 2014 in Grapevine, Texas today!


Objective: Achieve a response rate you’re proud of

Make your work count. Don’t let your letter be another white envelope in recipients’ mailboxes. Think outside the box and infuse creativity into the letter and packaging to encourage responses. If you have to send the letter anyway, why not try to make it a letter that will actually achieve something and can prevent your company from sending more property to the state than necessary.


Review this article for creative tips to make sure your letter is opened.
More tips will be shared during the 2014 Annual Conference, March 23-26, Grapevine, Texas so make sure to attend!


Objective: Sustain positive relations with external publics

Help your publics keep what is theirs. Spending the time to reunite an owner with their property is worth it -- whether it’s a simple thank you or brand loyalty, your publics will be happy you took the time.


To prevent that appreciation your publics had when they received the letter from leaving, make sure your company is prepared and instills an infrastructure that can respond accurately and quickly to questions and requests made by property owners. Each company will have a slightly different method of handling requests, so evaluating the amount of property and internal resources will be helpful in deciding what will work best for your company.


If you need help establishing or improving your company’s due diligence program, attend the Tending Due Diligence session at the 2014 UPPO Annual Conference, March 23-26 in Grapevine, Texas. You’ll learn the critical objectives, steps and deadlines that should be included in every program. In addition, we’ll present tips and suggested practices to encourage owner response, and the nuances of due diligence.


About the Authors


Peter Billows is vice president at Unclaimed Property Reporting & Recovery (UPRR), and a UPPO member. He has spoken at various UPPO events, most recently the 2013 Holders Seminar and will be speaking at the 2014 Annual Conference on Monday, March 24 during the Tending Due Diligence session. Contact Billows at 646-564-9202 or pbillows@uprrinc.com.


Cindy Nisley is senior vice president at Georgeson, and a current volunteer on the UPPO Government Relations & Advocacy Committee. She was a speaker at the 2013 Holders Seminar and will be co-presenting with Billows during the Tending Due Diligence session at the UPPO Annual Conference. Contact Cindy at 201-386-3533 or cnisley@georgeson.com.

More Resources
Creative Tips to Boost Due Diligence Letter Response Rates
Using Third-Party Vendors for Due Diligence Needs

Tags:  2014 Annual Conference  best practices  due diligence  education  unclaimed property 

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