KYC Business Checklist
Knowing exactly who your customer is — the right entity, the people behind it and that it is genuine — underpins every credit decision and protects you from fraud.
What's included
- A practical KYC checklist for new business customers
- The entity and identity verifications to perform
- Red flags that signal fraud or a shell
- Where to record the verification
6 min read
Why KYC protects you
Most credit losses come from customers who could not pay, but some come from customers who never intended to. Verifying who you are dealing with — the correct legal entity, real directors, a genuine trading presence — guards against both the asset-thin entity and the outright fraud. It also makes sure any debt you do incur is recoverable against a party that actually exists.
This checklist is about commercial KYC for credit decisions, not formal AML obligations, which may apply separately depending on your industry.
The KYC business checklist
- Legal entity confirmed on ABN Lookup (name, status, GST)
- Company details, directors and registered office confirmed on ASIC
- Entity not deregistered, in liquidation or administration
- Trading address verified (not just a PO box or virtual office)
- Business phone and website check out as genuine
- Director identity consistent across records
- Director checked for prior failed or phoenix companies
- Bank details match the entity name
- Trade references confirm a real trading history
- Verification recorded with date and who checked
How to use it
Run this for every new credit account before approval, escalating the depth for larger limits. Watch for classic red flags: an entity registered only days ago seeking large credit, a director linked to a string of liquidations, bank details in a different name, or a 'business' with no verifiable trading presence. Any of those should stop credit or push to cash-up-front.
Combine it with your credit check checklist so verification and creditworthiness are assessed together. A clean KYC file also makes any later debt referral straightforward.
This is general business information, not legal advice, and is not a substitute for any formal AML/CTF obligations that may apply to your industry.
Tips
- Verify the entity, the directors and a genuine trading presence — not just a name.
- A brand-new entity seeking large credit is a classic fraud red flag.
- Bank details in a different name than the entity warrant a stop and a question.
- Record the verification so the file shows who you checked and when.
FAQ
Is commercial KYC the same as AML?
No. This checklist supports credit decisions; formal AML/CTF obligations are separate and depend on your industry. Get advice on whether they apply to you.
What are the biggest fraud red flags?
A very new entity seeking large credit, a director with repeated liquidations, mismatched bank details, and no verifiable trading presence.
How deep should KYC go?
Scale it to the limit. Small accounts need the basic entity and address checks; large limits justify deeper director and history verification.
Templates are a head start — not legal advice
Customise to your business and have important documents reviewed. Need to recover a debt? We can help.