| If you have ever filed an unclaimed property | | | | It's amazing how quickly some people can get in |
| report with the state of California you know what | | | | contact with the CEO of the Company demanding |
| I am referring to and if you haven't but you filed | | | | their check. |
| a preliminary report in June with the State you | | | | (2) Have a process for responding to the faxes, |
| are about ready to life the nightmare of | | | | they pile up as quickly as the phone calls. Similar |
| California's due diligence process. Just last month | | | | to the phone calls, they go to the fax belonging |
| you were asked to submit a preliminary report to | | | | to the contact. |
| the state of California. This report was a list of all | | | | (3) A phone log is not necessary, as I mention |
| the companies and individuals that your Company, | | | | below, you will ask for verification by receipt of |
| at least according to your books and records, | | | | the fax. |
| "owes" unclaimed funds. | | | | (4) DO NOT PROMISE WHAT YOU CANNOT |
| Well, since June California has been very busy. | | | | DELIVER. I can guarantee if these folks do not |
| The State has been reviewing that list, checking it | | | | receive a check quickly they will call back. It |
| twice, and comparing it against tax records and | | | | amazes me every time...they didn't even know |
| other resources for the purposes of locating | | | | about the check and suddenly the electricity is |
| these "owners." The result of all this effort is in | | | | going to be shut off if they don't receive their |
| about a month or two they will be flooding the | | | | money. Tell them that after the final verification |
| state with letters from the California State | | | | process if they are owed the funds when they |
| Controller. These letters will notify these folks that | | | | can expect to receive their checks. BE |
| there is potentially money owing to them and if | | | | REALISTIC! Otherwise you will get to know some |
| they wish to claim it they need to contact YOU | | | | of these people so well you will be exchanging |
| to get their money. | | | | holiday cards. |
| Now, like my mother always said, there are two | | | | If you do not have the capability to handle the |
| sides to every story, the problem and the | | | | deluge, consider outsourcing this process. It |
| solution. | | | | generally only lasts about 1 - 2 weeks. I can assist |
| The Problem: This is going to create | | | | in identifying resources. |
| CHAOS...phone calls and emails will begin flooding in | | | | 3. Keep score. It is essential that you track all the |
| and will be routed to whomever you listed as the | | | | information coming at you. Remember these are |
| "contact." Hope it wasn't the CFO. Many of the | | | | responses to your preliminary report. If you make |
| recipients of these letters will be placed in a state | | | | payments in response to these letters I am fairly |
| of utter confusion. However, once they realize | | | | confident you don't want to also pay the state, |
| this is about money, they suddenly need it | | | | although California certainly needs the money. |
| immediately. | | | | Once again, I wish I had an easy answer...I don't, |
| The Solution: An immediate solution is to get | | | | but here are some suggestions. |
| another job. Now while this is tempting, it is not | | | | (1) Require that those requesting payment fax or |
| very practical. The second solution, prepare for | | | | mail in the letter they received from California as |
| the deluge. Here are some additional | | | | verification. You will need to maintain these faxes |
| recommendations. | | | | as proof that a request was made for payment. |
| 1. Beat them to the punch... send out your own | | | | If possible you should attach a copy of the issued |
| letter. Not surprising, the letter that California | | | | or cashed check, depending upon the size of the |
| sends is very confusing. Remember KISS? Well, | | | | Company. If this is not possible, a listing of checks |
| let's keep this really simple. Send out your own | | | | issued from AP would suffice. If the dollar amount |
| letter ahead of California. Now what this will cost | | | | requested is over a certain threshold you may |
| you in postage, it will save you in lost time | | | | want to request proof of identification. |
| answering phone calls and responding to faxes. | | | | (2) Now you may ruffle some feathers, but once |
| The letter should simply indicate that the individual | | | | you receive the fax or letter you may want to |
| will shortly be receiving a letter from the California | | | | send out your own letter requesting verification |
| State Controller notifying them that they may | | | | that funds are owing to the individual or company. |
| have funds owing to them from your Company. | | | | (3) If you have reporting software you most |
| If you wish you can also indicate that this has yet | | | | likely have the capability of tracking responses to |
| to be verified and the final report is due to | | | | due diligence letters. If you have reporting |
| California in November. | | | | software and you have not taken advantage of |
| If you would like to receive a sample letter, just | | | | this function, reach out to your provider. (If you |
| drop me an email or give me a call. | | | | would like to know about reporting software, give |
| I would STRONGLY advise you provide a phone | | | | me a call and I can put you in contact with a |
| number that individuals can call with any questions. | | | | great resource). |
| Now, you can provide detailed instructions on the | | | | (4) If you do not have reporting software, you |
| voicemail, but many will still have questions so I | | | | must ensure that you are accurately tracking the |
| advise you have a real live person answering the | | | | responses you are receiving. Remember this is |
| phone. I discuss this in greater detail below. | | | | not only important for reporting purposes but also |
| Please be advised there are NUMEROUS steps | | | | for reconciliation purposes. |
| you can take prior to sending California the list in | | | | (5) As I mentioned above, these folks are going |
| June that can mitigate the number of records, the | | | | to call you repeatedly wanting to know when |
| inaccuracy of records, etc., which have a direct | | | | they will receive their check. They will also call |
| impact upon the pain you will feel during the due | | | | wanting to know if you received their fax. I |
| diligence process. These will be discussed at | | | | STRONGLY recommend you have a method for |
| another time...I promise. | | | | tracking faxes received and checks processed. |
| 2. Man the battle stations. As I mentioned above, | | | | (6) KEEP COPIES and ORGANIZE THE |
| the letters that California sends out are very | | | | RESPONSES! Whether you prefer hard copy or |
| confusing. Once they see a phone number, most | | | | electronic, make sure you keep copies of all |
| people stop reading and just dial. Their question, "I | | | | responses, faxes, letters, emails. This is proof in |
| got this letter what does it mean?" Or, "This | | | | case you are ever placed under audit or there is |
| letter says you owe me money." The key is you | | | | ever any confusion regarding a payment. |
| and hopefully, your team, must be ready for the | | | | Tracking is the key to ensure your California |
| phone to start ringing. As I mentioned, the phone | | | | reporting is successful. I just touched the surface. |
| that will start ringing is the one who is as the | | | | If you read something here that resonated with |
| contact on your preliminary report. If it was the | | | | you or you have questions, please call and we can |
| Vice President you may want to remedy that | | | | discuss. Each of these suggestions should be |
| situation very quickly. | | | | modified and tailored to a Company's needs. |
| Unfortunately, I can't wave a magic wand over | | | | Thanks for reading, and as always, feel free to |
| this one. Below are some suggestions based upon | | | | call or email if you have any questions or |
| lessons learned the hard way...experience. | | | | comments. |
| (1) Answer the phone; don't let the calls pile up. | | | | |