What is Anti-Money Laundering (AML) software?
Anti-Money Laundering (AML) software is an invaluable tool, designed to help accounting and CPA firms maintain compliance with AML regulations.
AML software – or accounting software which supports AML responsibilities – can help firms detect, report, and facilitate the investigation of possible money laundering.
From reducing reliance on paper audit trails to automating customer due diligence checks, AML software supports accounting and CPA firms.
What happens when you don’t comply with Anti Money Laundering
For accountants and CPAs, failing to comply with AML carries significant consequences, including the possibility of:
- Damage to reputation and loss of client trust (leading to a decrease in business opportunities)
- Substantial financial penalties from regulators
- Regulatory sanctions, e.g. suspension or revocation of license to practice
- Facing criminal charges
Anti-Money Laundering solutions and best practice tips
To fulfil your Anti-Money Laundering (AML) obligations, CPA and accounting firms need to take appropriate action.
But how can forward-thinking firms improve and implement AML best practice?
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Question the client’s motive
Whenever you’re looking to take on a new client, don’t be afraid to question the motive behind hiring your services.  Â
This doesn’t mean you need to go full Law and Order and shine a light in their eyes while you grill them – but a healthy amount of suspicion can help the AML process, especially at the beginning of a new client relationship. Â
As part of customer due diligence (CDD) and know your customer (KYC) checks, don’t be afraid to go beyond basic ID checks to confirm there’s no risk of money laundering.Â
And again, you don’t need to make your client feel like a criminal. Questions like “What industries do you operate in?”, “Who do you typically work with?”, and “What’s an average month look like for you?” can help you get to know the client, establishing a strong foundation for a new relationship.Â
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Ongoing AML transaction monitoring
While it’s important to perform AML checks on new prospective customers, ongoing AML transaction monitoring is equally crucial. Â
Alongside checking the IDs and credit of new clients, carry out ongoing AML-related checks on existing clients, taking note of changes to:Â
- Client profilesÂ
- Frequency of transactionsÂ
- Changes to client servicesÂ
- Which industries they’re operating in
Carrying out ongoing AML transaction monitoring and know your customer (KYC) checks allows you to identify threats faster – which is good news for your firm. Â
While that can sound like a lot of work, the right AML software or accounting software can help you make short work of AML-related checks.
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Set up an internal regulation framework
An internal regulation framework is a way of laying out how and why your accounting firm complies with AML requirements.  Â
An AML internal regulation framework ensures that everyone – from senior leadership to administration – knows what they need to do to be AML compliant. It also helps ensure staff: Â
- Understand the importance of AML and the consequences of failing to comply with regulationsÂ
- Know how to support one another in upholding AML complianceÂ
- Can easily refer to an updated internal document if they’re ever unsure about AML.Â
- Are clear on how to identify and report possible money launderingÂ
Having a robust, up-to-date, and easy-to-understand internal regulation framework helps accounting and CPA firms pull together to ensure AML compliance.Â
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Lead from the front to champion AML
When it comes to ensuring AML compliance in an accounting, executive leadership must be the ones leading the charge. Â
When senior leadership is championing AML across a firm – no matter the size or scale – you’re far more likely to achieve and maintain compliance. It can help with:Â
- Allocating necessary resources (e.g. accounting software with AML capabilities)Â
- Embedding a culture that prioritizes compliance  Â
- Empowering staff with program enhancements (e.g. new AML training)Â
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Foster a culture of professional responsibility
This one’s tricky to achieve but when done correctly, your firm benefits from a staff who are well-resourced, knowledgeable and motivated to hold up their end when it comes to compliance. Â
Ideally, you want to encourage your staff to internalize their AML-related responsibilities, giving them the means to become compliance champions. You can do this through:Â
- Emphasizing the importance of AML and how their individual role fits into the firm’s wider AML frameworkÂ
- Offering enhanced AML training or refresher courses to ensure staff are up to speed with all AML regulationsÂ
- Sharing stories of effective AML intervention (larger firms could even look to spotlight particular members of staff to celebrate their contributions)Â
Featured Guide
The ultimate guide to Anti-Money Laundering (AML) solutions
This comprehensive free guide covers everything an accounting or CPA firm needs to know about AML.
Download now for:
- Anti-Money Laundering (AML) essentials
- Responsibilities for CPAs and accountants
- Bets practices and client red flags
- AML in other countries
- The role of AML software
How does software help with AML compliance
Anti-Money Laundering (AML) is a huge priority for accountants and CPAs; thankfully, there are accounting solutions that can help firms fulfil their AML responsibilities.
Accounting software can help CPA and accounting firms identify and manage risks like money laundering – from providing crystal clear audit trails to facilitating greater collaboration across departments and branches, the right software can make all the difference.
With the right accounting solution, firms can comply with AML regulations without sacrificing precious time, resources, and potential profit.
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