The Escheat Liability Hiding in Your AP Aging Report

Q: How far back can the 12 per cent interest reach?

Interest under CCP u00a71577 accrues from the date each item should have been reported, so it runs separately for each unreported item rather than from a single discovery date. The longer a company has gone without reconciling, the larger the exposure can grow.

Q: What is the Voluntary Compliance Program and is it worth using?

It is a State Controller programme that waives the u00a71577 interest for holders who complete its requirements. It runs year-round, so a business can apply as soon as it identifies a reporting gap rather than waiting for a fixed window.

The short answer

An accounts payable aging report that nobody reconciles often hides unclaimed property: stale vendor checks and credit balances California law requires businesses to report to the State Controller. Failing to report on time can trigger interest at 12 per cent per annum under Code of Civil Procedure §1577, though the Voluntary Compliance Program can waive it.

Stale items on an AP aging report are not free cash; many are unclaimed property the business is legally required to report to the State Controller.
A holder that fails to report, pay or deliver unclaimed property on time owes interest at 12 per cent per annum unless the delay had reasonable cause (CCP §1577).
The California Voluntary Compliance Program waives that interest for holders who complete it, and it runs year-round rather than on a fixed cycle.
Most businesses file the notice report before 1 November and remit funds between 1 and 15 June; life insurers follow a different calendar.
The same review that finds liability often finds the reverse: money owed back to the company sitting unclaimed under its own name.

Why does an AP aging report need reconciling at all?

Every finance team has a line on the aging report that stopped moving. A vendor refund check from three years ago. A credit memo nobody applied. A duplicate payment that was voided on paper but never actually cleared the bank. The amounts are usually small individually, and the account reconciles fine without touching them, so they sit. Nobody owns the task of clearing them because clearing them does not look like a problem. It looks like nothing.

It is not nothing. Under California’s unclaimed property law, a business is a holder of property that belongs to someone else the moment that vendor’s check goes uncashed past the statutory point. The company is obligated to report it, and eventually to remit it, to the State Controller. An unreconciled aging report is not a tidiness problem. It is a compliance gap, and compliance gaps on unclaimed property carry a statutory interest charge.

What actually counts as unclaimed property inside AP?

Anything owed to a third party that the business has stopped actively trying to deliver can qualify: uncashed vendor checks, unapplied customer credits, unclaimed wage payments, rebate checks, and refund checks issued and never cashed. The State Controller’s own property file shows how large these categories get in aggregate. Cashier’s Checks alone account for 688,548 records statewide worth $797,643,439, and Checking Accounts account for 396,236 records worth $1,075,997,337. Those totals come from exactly the kind of stale, unreconciled balances that sit on someone’s books before they are reported.

The companies that appear at the top of the State’s holder list are not small operations. Bank of America’s California entity alone has reported 139,263 records worth $371,024,638; Wells Fargo has reported 266,625 records worth $359,995,204. These are organizations with dedicated escheatment teams and they still generate this volume. A mid-sized company without a dedicated process is not exempt from the same obligation; it simply has less visibility into how much of it has accumulated.

What happens if the business has not been reporting it?

Interest. Code of Civil Procedure §1577 provides that a holder who fails to report, pay or deliver property on time owes the Controller interest at 12 per cent per annum, calculated from the date it should have been reported, unless the failure was due to reasonable cause. There is no cap on how far back that interest can run once a gap is identified, and it accrues on each unreported item from its own due date, not from the date someone notices.

The filing calendar itself is fixed and unforgiving in form, if not in penalty. Most businesses file the notice report before 1 November and remit funds between 1 and 15 June of the following year. Life insurance companies file before 1 May and remit between 1 and 15 December. An extension request has to arrive at least 30 days before the report is due. Miss the window with items still sitting in the aging report, and the interest clock has already started.

Can the interest actually be avoided?

Yes, for holders who come forward. The Controller is required to waive the §1577 interest for a holder that participates in and completes the California Voluntary Compliance Program. The programme runs year-round, so a company does not have to wait for an enrollment period to apply. Completing it generally means reviewing historical records, reporting what should have been reported, and remitting the funds, but the interest exposure that would otherwise attach to years of unreported stale items is removed.

This is also where a proper review pays for itself. A company that has never reconciled its aging report against unclaimed property rules usually does not know whether it has one year of exposure or ten. Finding that out before the Controller does, rather than after an audit notice arrives, is the difference between a clean voluntary filing and a disputed one.

What should an AP or finance team actually do with this?

Start by pulling every item on the aging report older than a year and asking, for each one, whether it has ever actually been delivered to the person or business it is owed to. If the answer is no and nobody can produce a recent communication with the payee, it belongs in the unclaimed property review, not in a general write-off entry. Our business escheatment audit (services/business-audit) is built around exactly that question, run across a full set of payables rather than one flagged check at a time.

The same exercise frequently turns up the opposite situation: money owed to the business that was escheated by someone else under the company’s name, because a customer, insurer or financial institution lost contact with it. That is worth checking separately; see how-to-claim/business for what a business needs to file its own claim, or search the property file directly for the company’s legal name and any prior trading names. If a firm is engaged to locate and recover that side of it, California law caps what can be charged: a fee to locate or recover property reported under §1530 may not exceed 10 per cent of what is recovered, a limit set out at resources/finder-fee-law.

Questions People Ask

Is every stale item on an AP aging report unclaimed property?

Not automatically. An item only becomes reportable once it has gone unclaimed long enough and the business can no longer show it was delivered. The distinction matters, which is why a line-by-line review beats a blanket write-off policy.

How far back can the 12 per cent interest reach?

Interest under CCP §1577 accrues from the date each item should have been reported, so it runs separately for each unreported item rather than from a single discovery date. The longer a company has gone without reconciling, the larger the exposure can grow.

What is the Voluntary Compliance Program and is it worth using?

It is a State Controller programme that waives the §1577 interest for holders who complete its requirements. It runs year-round, so a business can apply as soon as it identifies a reporting gap rather than waiting for a fixed window.

Does this apply to a small business, or only large companies?

The reporting obligation applies regardless of size. Large companies simply generate higher volumes, which is why they dominate the State's holder records, but a small business with a handful of uncashed vendor checks has the identical legal obligation to report them.

What if the review finds money owed to us, not by us?

That happens often enough to check for separately. If another company or institution escheated funds under your business's name, you can search for them directly or have a claim prepared on the business's behalf; see how-to-claim/business for what documentation is required.

When are businesses actually required to file with the State Controller?

Most businesses file the notice report before 1 November and remit funds between 1 and 15 June of the following year. Life insurance companies file before 1 May and remit between 1 and 15 December. Extension requests are due at least 30 days before the report deadline.

Sources

Figures on this page are from our copy of the State Controller’s published file as it stood on 12 November 2026. The State republishes the file weekly, so current totals will differ. Search is always against the latest copy.

How You Are Protected

Our fee is capped at ten per cent of what is recovered by Code of Civil Procedure §1582, and nothing is owed until the State Controller has paid you. If we recover nothing, you owe nothing. Our recovery fee is never asked for up front — it comes out of money the Controller has already paid you. A booking deposit on an in-person appointment is a separate thing, and is credited back against anything you are charged.

California Unclaimed Property Services is a private asset recovery firm. We are not the California State Controller’s Office.