Found Money
Written By Annette Hughes, Finance & Quality Control Leader at BEC CFO & CPA
You work hard for every penny – but do you know where it all is? Here are just a few things to keep an eye on:
Earnest Money Deposits
One of our month end processes is to look at the earnest money deposits in the books and ask about deposits that are 2 or more months old. This routinely uncovers money that the title company is just holding on to that needs to be returned.
Action: Review your list of earnest money payments routinely and make sure to request the funds be returned for properties that aren’t sold.
Forgotten Bank Accounts
It isn’t unusual for us to discover that a bank account was opened in order to obtain a loan. Then the account is forgotten, and the money just sits there, sometimes dwindling due to bank fees.
Action: Make sure that all business accounts opened are included in QuickBooks and the bank feeds connected.
Bank Fees for Bank Accounts That Aren’t Used
At least once a year we come across a bank account that was opened with a small balance and then forgotten. The bank ends up charging $10, $15 or more per month for that account until the balance is -0-.
Action: If a minimum balance will protect you from that service charge, make sure you maintain that balance. Better yet, close all bank accounts that are not actively being used.
Duplicate Payments
It is not unheard of to receive an invoice and then receive a statement and a payment made on both. If the vendor is not well organized, they may not even realize that there was an overpayment or decide to keep it to apply to a future purchase which may never happen.
Action: Track all invoices received and date paid. You can record the payment in QuickBooks before it comes through the bank feed. This is particularly helpful for checks (yes occasionally people do still write checks 😊). Pay only from invoices. If you receive a statement, compare the statement to the invoices that you received to make sure you have accounted for all of them.
Undeposited Checks
These are usually refunds from utilities, title companies or lenders. Make sure you open all your snail mail even if you believe it is only a statement. I have seen lenders issue a check from escrow that was never opened and deposited.
Unclaimed Funds
Every state has a requirement that if a business owes someone money and has lost contact with them, those funds must be turned over to the state. There is a website for each state to search for unclaimed funds with instructions on how to claim the funds. I occasionally search the states that I have lived in, and I have actually found money for relatives.
Those are just places to find your own money or to keep what you have. Happy hunting!