Brought to you by
Sage new logo

Sage is the market leader for integrated accounting.

Save content
Have you found this content useful? Use the button above to save it to your profile.

How well do you know your clients? KYC and its implications in anti money-laundering

24th Oct 2023
Brought to you by
Sage new logo

Sage is the market leader for integrated accounting.

Save content
Have you found this content useful? Use the button above to save it to your profile.

In the world of finance, the mantra “Know Your Client” (KYC) is a non-negotiable priority.

As touched upon in last month’s webinar on Anti Money Laundering (AML), as AML regulations intensify, the number of reviews, penalties and exclusions from professional bodies are also on the rise. Understanding clients, beyond their basic ID checks, can transform the accountant-client relationship.

You can watch the full webinar here, but if you’d like a recap, here are four key lessons from last season’s webinar and how the director of LilyIris, Samantha Nelmes, puts this into practice.

 

Starting the relationship on the right foot

After the first few conversations, the typical accountant-client relationship will usually start with an AML check. This helps ensure that a business is operating within the law and preventing potential fraud.

But as the AML expert and forensic accountant, David Winch, points out, we shouldn’t stop there. As AML checks from professional bodies become increasingly common, it’s more important than ever to ensure that you can demonstrate thorough ID checks and supporting paperwork on every client – no matter how longstanding or well-known. Always verify, and never assume.

 

Making time for regular conversations

Samantha Nelmes from LilyIris brought an invaluable perspective to the table. She highlighted how consistent interactions, such as those to manage scope creep, discuss fee changes, or regular check-ins, can bring previously unknown information to the surface. Regular touchpoints can mean all the difference between a straightforward annual accounts preparation and a frantic, last-minute scramble.

Imagine a small business that regularly diversified its product range but didn’t communicate this change to its accountant. If this change was mentioned at the end-of-year review, the accountant might be caught off-guard, leading to potential tax implications of misalignments in financial statements. Regular conversations can help prevent such a surprise.

 

Growing your services as a strategic partner

The value of an accountant transcends number crunching. By taking the time to know a client’s business, their individual desires, motivations, challenges and fears, accountants can transition into strategic partners. Regular touchpoints can also open opportunities for tax breaks, grant applications, e-commerce growth strategies, or even suggestions for inventory management tools tailored to specific industries.

This is the difference between an accountant who fills out a tax return at the end of the year and one who could help a small business owner make thousands more in revenue.

 

In conclusion

Technology can often depersonalise relationships, yet it can also do the opposite. Knowing your clients, in detail and depth, is a service that cannot be automated and isn’t just a good-to-have. And as the UK government continues to prioritise AML surveillance and monitoring, truly knowing your clients is a compliance necessity.

 

For more insights and expert opinions, watch the full on-demand webinar here.