Know Your Customer (Business) Checklist
A practical know-your-customer routine for trade accounts — confirming who the business is, who is behind it and that it is genuine before you extend credit.
What this checklist covers
- Confirm the legal identity of the business
- Identify the people who own and control it
- Check the business is genuine and operating
- Record your KYC evidence against the account
7 min
Before you start
Know your customer here means making sure the business you are about to credit is real, correctly identified and run by people you can hold accountable. Have your verification sources ready. This is general guidance on commercial onboarding, not formal AML obligations.
- The business's stated legal name, ABN and ACN.
- Access to ABN Lookup and the ASIC register.
- Details of the people you are dealing with and their roles.
- The customer file to store your evidence.
Step 1 — Confirm the entity
- Verify the ABN and GST status on ABN Lookup.
- Confirm the legal name, structure and, for companies, the ACN on ASIC.
- Check the entity is active, not deregistered or under administration.
- Note any recent name change or restructure.
- Confirm the registered and trading addresses look genuine.
Step 2 — Identify the people behind it
- Identify the directors and, where relevant, the beneficial owners.
- Confirm the person you are dealing with has authority to commit the business.
- Verify the identity of any individual giving a personal guarantee.
- Check directors for links to failed or phoenix companies.
- Record names and roles against the account.
Step 3 — Check it is genuine and record it
- Look for signs the business actually operates — a website, premises, trading history.
- Be alert to entities with no online footprint that request large credit quickly.
- Cross-check the details the customer gave against the public registers.
- Resolve any inconsistencies before extending credit.
- Store your verification evidence and the date you checked.
Common mistakes
- Crediting a business without confirming it legally exists.
- Dealing with someone who has no authority to bind the entity.
- Ignoring the people behind the company and their history.
- Missing that a brand-new entity is pushing for large credit fast.
- Keeping no record of the checks you performed.
Solid know-your-customer work underpins every other credit control. The Merion tools help keep your onboarding evidence in order. This is general information, not legal advice — meet any regulatory obligations that apply to your business and handle personal information appropriately.
Key takeaways
- Confirm the business legally exists before you credit it
- Deal only with someone authorised to bind the entity
- Know the people behind the company and their record
- Keep evidence of every check you performed
Frequently asked questions
What does know your customer mean for a trade account?
In a commercial credit context it means confirming the business is real and correctly identified, knowing who owns and controls it, and checking it is genuinely operating. It is the foundation that makes your credit limits and security meaningful.
How do I check a business is genuine?
Combine register checks with real-world signals: an active ABN, current ASIC status, a website, premises and a trading history. Be cautious of entities with no footprint that seek large credit quickly, and resolve inconsistencies before committing.
Do I have legal obligations to verify customers?
Certain regulated sectors have formal anti-money-laundering obligations; most trade suppliers do not, but still benefit from solid commercial verification. Check whether any regime applies to you, and handle the personal information you collect in line with privacy obligations.
Work the checklist, then get paid
Use the free Invoice Generator, then let Merion recover anything that goes unpaid — commission-only.