Transfer Escheated Funds to the Escheatment Authority
After you’ve escheated unclaimed payment in Payables, you must transfer the escheated amounts to the appropriate local authority. It's a legal requirement to escheat assets unclaimed over a specific period and transfer them to the escheatment authority.
Escheatment authority is assigned by the government to hold abandoned properties or dormant accounts for a limited period. The owner, beneficiary, or legal heir can reclaim them during this period. After which, the unclaimed assets are sold and the amounts are transferred to the state funds.
How You Transfer Funds to Escheatment Authority
After escheating the payments, run the Creating Accounting process to transfer the escheated amounts from Cash or Cash Clearing account, to the Unclaimed Fund account.
Next, create a Payables invoice for transferring the escheated payment to the escheatment authority. Here’s how you do this.
- Go to .
- In the Tasks panel tab, click Manage Payments.
- Select the payments with the status as Escheated and click .
- Search for and select the applicable escheatment authority supplier to create the invoice and then click Submit.
You can review the escheatment invoices from the Manage Invoices page. An escheatment invoice distribution is created using the Unclaimed Fund account that was credited when the payment was escheated.
Accounting Entries for Escheated Payments
Generation of accounting entries for the payments and escheated payments differ, based on the offset segments and when to account payment options.
This is how accounting is done when Offset Segments option is set to None and Account for Payment option is set to Payment Issue and Clearing.
| Event | Debited to | Credited to |
|---|---|---|
| Payment is accounted | Supplier Liability Account | Cash/Cash Clearing Account |
| Payment is escheated | Cash/Cash Clearing Account | Unclaimed Fund Account |
| Remittance invoice is created to transfer the escheated funds to the Escheatment Authority | Unclaimed Fund Account | Escheatment Authority Liability Account |