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Integrate AML with your onboarding process to save time and money

19th Oct 2023
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Bright was created in 2021 when Thesaurus Software Ltd. and Relate Software Ltd. decided to join...
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One topic that can make even the most positive accountant or bookkeeper groan is Anti Money Laundering (AML). Endless box-ticking, time-consuming and manual processes and the fear of the professional and financial damage that could come from missing something or getting something wrong.

We’ve recently produced a white paper on how to simplify AML in your practice. The good news is that with the right tools and processes in your practice, AML can be streamlined and simplified, so you can be confident that if you were to have a compliance visit from your institute or HMRC you’d pass with flying colours.

Download AML guide

The specific rules for your practice may vary depending on who is responsible for your AML supervision. Usually, this would be your professional body such as ICAEW, ACCA, CIPFA, ICAS or directly by HMRC if your practice is not regulated by a professional body. All of these bodies are members of CCAB who publish guidelines and set the rules that are then overseen by the professional bodies.  

What do you need to do to be compliant? 

There are certain things you have to have in place, the exact details will be provided by the relevant body for your practice, but they will include: 

1. Compliance Officer: Appoint a compliance officer responsible for overseeing AML compliance and reporting directly to senior management. 

2. AML Training: Ensure that all employees and staff members are trained and aware of AML regulations and compliance procedures.  

3. AML Policies and Procedures: Develop and implement comprehensive AML policies and procedures tailored to your specific accounting or bookkeeping practice. These should be regularly updated to reflect changing regulations and risks.  

How to ensure your onboarding process is compliant 

Accountants play a crucial role in complying with anti-money laundering (AML) regulations when taking on new clients. These regulations are designed to prevent money laundering and the financing of illegal activities.   

When you’re taking on a new client, you need to ensure that you consider AML as part of your onboarding process. Whether you’re seeing clients face to face, or remotely, you’ll need to get various forms of ID and most likely carry out online checks so you can be sure you’re compliant. You should build a checklist and try to automate as much of the process using software to make sure you don’t miss anything as you’re going through things. 

Here is a brief summary of what accountants need to do to ensure compliance with AML regulations for new clients: 

1. Client Due Diligence (CDD) Conduct thorough client due diligence to understand the identity and nature of the client's business. This typically includes verifying the client's identity, the nature of their business, and the source of their funds. Don’t forget, this includes any linked people such as directors and shareholders in a company. 

2. Ultimate Beneficial Owner (UBO) Identification Determine the ultimate beneficial owner(s) of the client's business, especially in cases of corporate entities or trusts. Understand the ownership structure to prevent anonymity. 

3. Risk Assessment: Assess the risk associated with the client and the services they require. This should be based on factors like geography, business type, and transaction patterns. High-risk clients, such as those in financial services or dealing with large sums of money, may require more stringent due diligence.  

4. Know Your Customer (KYC) Gather information about the client's identity, including their name, date of birth, address, and other pertinent details. Verify this information through reliable sources, such as government-issued identification and utility bills.  

5. Record-Keeping Maintain accurate records of all client interactions, including identification documents, transaction records, and any AML-related documents, for a specified period as required by law. 

Tools like AccountancyManager by Bright can really simplify this process automating chasing documents and keeping everything organised in one place. Don’t forget to consider whether you want to cover your costs for these vital processes by charging an onboarding fee for clients.

Remember that non-compliance with AML regulations can result in severe penalties for your firm, including fines and potential legal action. It's essential to take these obligations seriously and to seek guidance from relevant regulatory bodies and legal professionals if you have any uncertainties regarding specific cases or compliance requirements. Additionally, it's important to note that AML regulations may change over time, so staying up-to-date with the latest requirements is essential to ensure ongoing compliance.

To book a demo of Bright's products, check out the link below.

Book a demo Download AML guide

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