Unclaimed Property Software: Should You Really DIY?

For unclaimed property holders who process tens of thousands of dollars in unclaimed property annually—or more—tracking, stale dating and reporting properly can be complicated. Many large holders rely on in-house software to streamline these processes, as well as keep up with state statutes to ensure accurate reporting.

In-house unclaimed property software is designed to extract raw data as an input, then analyze it for dormancy based on each jurisdiction’s statutory requirements, identify items for due diligence, and finally to produce reports, either paper or electronic, to submit to each applicable state. The software creates a central repository for unclaimed property records and provides encryption, due diligence tools, reporting functions and scheduling features.

Some of the best software programs used for this purpose are also used by professional unclaimed property advisory companies. In-house versions are built to run on existing accounting software holders use to manage accounts.

Although these programs do help streamline the process, they can create as many problems as they solve if not used properly.

Some software is programmed by IT experts who are more familiar with programming than nuances of unclaimed property recordkeeping and reporting.
Software makers aren’t legally responsible for accurate reporting and errors; holders carry the burden of accurate, on-time reporting.
Software doesn’t include interpretations of the law, and reporting based on the software’s rigid parameters can result in under- or over-payment.
Various input parameters, such as report dates and due diligence thresholds, are not as straightforward as might be first assumed; they require expert management.
The software is not as intuitive or comprehensive as programs such as TurboTax, which is sometimes compared to unclaimed property software.

Generally, unclaimed property software is a useful tool that won’t provide the needed benefits unless it’s used properly and to its fullest capabilities by unclaimed property experts. For that reason, we and many others discourage doing it yourself and recommend holders opt for the use of software through a contract with professional unclaimed property specialists.

To help you get a clear picture of the benefits and limitations of in-house software, we’ve prepared the following chart.

Pros and cons of using unclaimed property software in-house

PRO	CON
Allows immediate access to software	Difficult to get necessary in-house level of specific expertise to use software correctly and to full advantage
Local access to the software for direct importing of data	Use of in-house software can complicate collaboration with outside specialists
Limits confidential access to in-house staff	Doesn’t provide knowledge-based strategy to use the data wisely
Provides format for scheduling in-house tasks and reminders	Doesn’t provide easy integration with vendor systems
Can be adapted to existing maintenance software as an add-on (limiting human error)	Software isn’t always accurate or updated in a timely manner
Can produce automatic reports	There’s more to reporting than producing automatic reports
It’s better than performing calculations and keeping records manually	Without deep expertise, software value can’t be realized—difficult to get without professional advisors
Provides statutory information	Statutory interpretations could be inaccurate – need a professional other than the software vendor to review
Includes state deadlines	Doesn’t ensure timeliness or accuracy of reporting unless user is fully aware of state deadlines/statutes
Saves time in some ways, which saves money	Software is costly for a sole user – professional providers can allocate software costs among many clients to reduce the cost for each organization
Provides basic reporting formats, which may be easier than starting from scratch	Doesn’t file the reports for you – still need an expert to package reports and upload/mail/wire according to state instructions

Purchasing unclaimed property management software to DIY gets a holder about 60% of the way to proper filing of state reports. Even when software is used to manage records and prepare reports, a substantial amount of staff time is required to make decisions about inputs, monitor and test software records processing, and prepare reports to ensure accurate compliance. Proper use of unclaimed property software requires a high level of expertise, and the entire risk of accurate reporting is sustained by the holder corporation.

A better solution for companies without the time, resources or expertise to ensure proper use of the software is to engage the services of professional unclaimed property specialists, who have years of experience with many different types of property and a deep understanding of the many layers of unclaimed property best practices.