Bank Reconciliations and Unclaimed Property

Large Publicly Traded Energy Company

Large publicly traded energy company with massive bank reconciliation issues, turned to Jefferson Wells to bring accounts to current status and implement an improved process.

Two women sit together and work

Business Issue

A publicly traded energy company with annual revenues of more than $8 billion needed assistance because their bank reconciliations were in such an unreconciled status that there was potential of their external auditors issuing a qualified opinion.  In addition, the client had not maintained compliance with state unclaimed property statutes in multiple states. The client needed a partner that could quickly bring the unreconciled accounts to a current status and assess the current state of its compliance with unclaimed property filings and then bring the filings to a current status.

Solution

Jefferson Wells initially took over reconciliation of less than 20 key accounts and brought them to a reconciled status in three months, cleaning up thousands of reconciling items.  Jefferson Wells performed reconciliation services for these accounts for 2 years until the client recognized the value in outsourcing the entire department to Jefferson Wells. Over the next several years, the population of accounts reconciled by Jefferson Wells on an outsourced basis grew to include all of the organization’s bank accounts. 

Concurrent with outsourcing of the bank reconciliations, the client expressed interest in linking the bank reconciliations services with completion of unclaimed property filings, noting the importance of this annual regulatory compliance requirement.  In “Year 4” Jefferson Wells began providing unclaimed property services on an outsourced basis as well.  

Results

The client was able to maintain its bank account reconciliations in a “current” status, eliminating the risk of a qualified audit opinion.  The client gained consistency in and quality of its reconciliations and was able to achieve compliance with unclaimed property regulations in 50 individual states with filings submitted on or before the mandated filing deadlines.  In addition, the client avoided over-remittance to states, and was able to recognize a favorable income statement impact from correction of data inaccuracies.