Written by the NeX Automate Compliance Team

Reviewed for accuracy against current AUSTRAC guidance. NeX Automate builds AML/CTF and client-verification automation used by Australian accounting practices. This guide is general information, not legal advice — confirm your firm’s specific obligations with AUSTRAC or a qualified adviser.

Last updated: July 2026

At the heart of every AML/CTF compliance program is a deceptively simple question: is this client really who they say they are?

Answering it correctly is the job of Verification of Identity in AML/CTF — often called VOI. The reforms took effect on 1 July 2026, and AML/CTF obligations are now live for Australian accounting firms. If your practice is already compliant, VOI is now a repeatable day-to-day workflow. And if you’re among the firms still catching up, verification of identity is the fastest, highest-impact place to start.

This guide explains the VOI standard, why it matters for accounting firms now that the regime is in force, and how NeX Automate’s VERA supports faster, more consistent client verification.

What Is VOI?

Verification of Identity in AML/CTF is the process of confirming a client’s identity using reliable and independent sources. It typically follows a “100-point” style framework, drawing on government-issued documents such as passports, driver licences, and Medicare cards, cross-checked against the individual presenting them.

Electronic vs Manual VOI

Manual VOI

The traditional approach involves a staff member physically, or via video, inspecting the client’s identity documents, recording the details, and retaining copies. Manual VOI can work, but it is often slow, inconsistent between staff members, and difficult to audit at scale.

Electronic VOI

Modern electronic verification checks identity documents against authoritative databases in real time. It helps confirm whether a document is genuine, current, and matched to the individual presenting it. For accounting firms, VOI becomes faster, more consistent, and easier to document when supported by electronic tools.

This is where client verification automation becomes valuable. It reduces manual handling, supports stronger audit trails, and helps firms apply the same standard across every client.

Why VOI Is Harder Than It Looks

Verification of Identity in AML/CTF may sound simple, but in practice it creates several operational challenges for accounting firms:

• Document fraud is more sophisticated than ever. Fake and altered documents are becoming harder to identify with manual checks alone.
• Consistency is difficult. Different staff members may apply different standards, especially without a clear workflow or centralised system.
• Remote onboarding adds complexity. Many firms now work with clients online, so identity checks must be secure, reliable, and easy to complete without face-to-face meetings.
• Audit requirements matter. Every verification must be documented properly and retained for future review.

That is why AML/CTF compliance software and AI automation for accounting firms are becoming important parts of modern compliance operations.

The 7-Year Record-Keeping Rule

Under AUSTRAC requirements, VOI records — like all customer due diligence records — must be kept for a minimum of seven years. That means every identity verification your firm performs creates a documentation obligation that continues long after the client engagement ends.

Manual systems can make this difficult. Files may be stored across email, folders, spreadsheets, or disconnected systems. With accounting automation, firms can reduce the burden of storing, organising, and retrieving client verification records.

For firms managing high client volumes, VOI is not just a compliance step. It becomes an ongoing workflow that must be repeatable, traceable, and audit-ready.

“A VOI process is only as good as its weakest link — and in most firms, that weak link is inconsistent manual handling and incomplete record keeping.”

How VERA Automates VOI

Meet VERA — Client Verification Automation

VERA, the Client Verification Automator from NeX Automate, helps automate the VOI process for accounting firms. It supports electronic identity verification, applies a consistent standard to every client, and helps retain complete, time-stamped records for the required retention period.

For your clients, this means a faster, smoother onboarding experience:

• No unnecessary document chasing
• No avoidable delays
• No inconsistent manual handling

For your firm, it means more consistent, defensible, and audit-ready Verification of Identity across every client.

VERA is part of NeX Automate’s broader suite of automation solutions for accounting firms, including accounting automation for firms, ATO Automation, ATO document automation, ASIC Review Automation, and workpaper automation. Together, these tools help firms reduce repetitive admin, improve accuracy, and keep compliance workflows moving.

VERA runs at $25 per hour — you pay only for the verification work it performs.

Automate VOI at Scale with VERA

Sign up and get 50 free credits to see VERA run live identity checks — electronic VOI, consistent standards, and audit-ready records from the first client.

Start Free – Get 50 Credits →

Why Firms That Aren’t Ready Yet Should Act Now

With the 1 July 2026 deadline behind us, AML/CTF compliance is no longer a future project — it’s a current obligation with every new client you onboard. Firms that haven’t fully implemented their processes are now operating with real exposure, and building policies, training staff, creating workflows, and documenting client verification all at once under pressure is exactly the scramble the deadline was meant to avoid.

The good news: verification of identity is the fastest place to close the gap. By standardising VOI now, firms can build a smoother onboarding process and reduce ongoing compliance pressure. The right systems help your team verify clients, retain records, and manage obligations with far less manual work.

Already past the deadline and not fully set up? You’re not alone — but every unverified client onboarded from here carries risk. Prioritising a consistent, documented VOI workflow is the single most effective first step to getting compliant quickly.

AML/CTF compliance for accounting firms goes beyond registration. It creates an ongoing operational responsibility that continues with every new client. That’s why AI automation for accounting firms is becoming essential — it helps reduce repetitive admin, improve accuracy, and keep compliance workflows consistent.

Get Your AML Policies & Staff Training Sorted in 15 Minutes

Behind on the essentials? Complete this quick intake form and we’ll prepare a draft AML/CTF policy tailored to your firm — including your firm’s details, services, responsible persons, and client onboarding workflow.

Book My AML Readiness Assessment →

Key Takeaways

• Verification of Identity in AML/CTF confirms a client’s identity using reliable and independent sources.
• Electronic VOI is faster, more consistent, and more auditable than manual checks.
• VOI records must be retained for a minimum of seven years.
• With the reforms now in force, firms not yet compliant should treat VOI as the first priority.
• VERA supports client verification automation and helps firms manage VOI more consistently.

See How NeX Automate Automates Client Verification

Watch VERA run electronic VOI, apply consistent standards, and produce audit-ready records — in a quick, no-pressure demo.

Book a Free Demo →

Sources & further reading

• AUSTRAC — Customer identification and verification
• AUSTRAC — Record-keeping obligations
• AUSTRAC — Tranche 2 entities and the 2026 reforms
• Financial Action Task Force (FATF) — The FATF Recommendations (international standards)

Related guides: What AML/CTF means for accounting firms, Customer Due Diligence explained, and the best AML/CTF compliance software for accounting firms.

This article cuts through the noise. It covers what to look for in AML/CTF compliance software for small and mid-sized accounting firms, reviews the main options available in Australia, and explains why the right choice depends heavily on how the software integrates with your existing practice workflow, not just whether it ticks the compliance boxes.

Disclosure: We are Nex Automate, the team behind VERA — one of the options reviewed below. We have been transparent about that throughout. Our goal with this article is to give you a genuinely useful comparison, not a sales pitch dressed up as a review.

What AML/CTF Compliance Software Must Do for Accounting Firms

Before evaluating any tool, you need to know what you are actually evaluating it against. These are the eight criteria that matter for an Australian accounting firm becoming a reporting entity under Tranche 2:

Problem With Most AML/CTF Software Options

Here are the main options available to Australian accounting firms, evaluated against the eight criteria above.

Option 1: VERA by Nex Automate — Built for Australian Accounting Firms

Option 2: FrankieOne — Strong Australian IDV, Limited Accounting Integration

Option 3: International IDV Platforms (Onfido, Jumio, Thales) — Capable but Overkill

Option 4: Manual Process — Compliant in Theory, Unworkable at Scale

Want to see how VERA compares to your current process live?

Book a free 30-minute demonstration. We will walk through a complete client verification from start to finish — showing you exactly what your team would and would not need to do manually.

Book Your Free VERA Demo

Feature Comparison at a Glance

Use this table as a quick reference when evaluating your options. The key differentiators for accounting firms are highlighted in the rows relating to practice integration, document automation, and Tax Agent Portal connectivity.

AML/CTF Solution Comparison

A practical side-by-side view of VERA, global IDV platforms, FrankieOne, and manual verification for Australian accounting practices.

Feature	VERA	AU10TIX /	FrankieOne	Manual
Built for Australian AML/CTF (AUSTRAC)	✓		✓	✓
Face-ID biometric VOI	✓	✓	✓
Sanctions + PEP screening	✓	✓	✓
Automated risk scoring	✓		✓	✕
Engagement letter generation	✓	✕	✕	✕
Practice system integration	✓	✕		✕
7-year record keeping	✓		✓
Deploys in under 4 weeks	✓	✓	✓	✓
No lock-in contract	✓			✓
Built specifically for accountants	✓	✕	✕	✓

Key: ✓ Fully supported Partial or requires configuration ✕ Not supported

Be Compliance-Ready Before July 1 — With Software Built for Accounting Firms

VERA is the only AML/CTF compliance tool on this list built end-to-end for Australian accounting practices. It handles verification, screening, risk scoring, document generation, and record keeping — all connected to your existing practice system. Deploys in 2 weeks. No lock-in.

Book Your Free VERA Demo Now

From July 1, 2026, accountants providing certain professional services will become “reporting entities” under Australia’s Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) laws. This is known as Tranche 2.

This is not optional. It is law. And the penalties for non-compliance are significant: up to $6.6 million for individuals and $33 million for businesses.This article breaks down exactly what is changing, why it matters, and what you need to do — including a practical solution that Australian accounting firms are already using to become compliant without adding hours to their workday.

What Is AML/CTF Tranche 2?

Australia’s AML/CTF Act was passed in 2006 and originally regulated financial services, gambling, and bullion services — this is referred to as Tranche 1.

Tranche 2 extends these obligations to “gatekeeper” professions — professionals who are often exploited to facilitate money laundering because they handle large transactions, create complex structures, or have access to sensitive financial systems.

The newly regulated professions include:

The goal is to align Australia with international standards set by the Financial Action Task Force (FATF) and close regulatory gaps that criminals have exploited for years. This reform will bring approximately 80,000 to 100,000 new reporting entities under AUSTRAC’s regulation.

What Are ‘Designated Services’ for Accountants?

You do not need to be a large firm to be affected. If you provide even one designated service, you become a reporting entity. Size does not matter — sole practitioners and large national firms alike are captured.Designated services commonly provided by accountants include:

What Are Your New Obligations?

If you provide designated services, here is what you must have in place by July 1, 2026:

Key Dates You Cannot Miss

FREE DEMO — 30 MINUTES

Struggling with how to handle client verification across hundreds of clients?

VERA automates the entire process — VOI checks, AML screening, engagement letters — in approximately 3 minutes per client. See it live in a free 30-minute demonstration.

Book Your Free VERA Demo

Why Are Accountants Being Targeted?

According to AUSTRAC, accountants are frequently exploited for money laundering in Australia because they:

Your role is critical in identifying and responding to money laundering and terrorism financing risks. An effective AML/CTF program protects your practice from being misused for financial crime and protects you from serious regulatory consequences.

What This Means Practically for Your Firm

It is worth being direct about this: the compliance burden is significant. Here is what you are looking at in practice:

Done manually, this verification process can take 30 to 45 minutes per client. Multiply that by your entire client base and you are looking at hundreds of hours of additional administrative work before you have provided a single hour of billable advice.

AUSTRAC Resources for Accounting Firms

AUSTRAC has released sector-specific guidance to help accountants prepare. Key resources include:

These Starter Kit is designed for practices with 15 or fewer personnel that only provide professional designated services. Larger practices with more complex risk profiles will need to develop customised AML/CTF programs tailored to their specific client base and service mix.

How Can You Prepare Without Drowning in Admin?

Here is the practical reality: if you try to manage all of this manually, you will spend hundreds of hours over the coming months simply processing client verifications. That is time taken directly away from billable work.

The good news is that you do not have to do it manually.

At Nex Automate, we have built VERA — our Client Verification Automation tool specifically designed to help accounting firms meet their new AML/CTF obligations without adding hours to their workday.

What takes 30 to 45 minutes manually now takes approximately 3 minutes. VERA processes tasks 3 times faster than manual human capabilities with unmatched precision — and operates fully within your company’s security and data policies.

Be compliance-ready before July 1, 2026 — without hiring extra staff or working longer hours.

Book Your Free VERA Demo

We will show you exactly how VERA works, how it integrates with your practice management system, and how much time you will save. No sales pitch — just a real demonstration of the product in action. VERA deploys in 2 weeks with no lock-in contract.

Book Your Free VERA Demo Now

P.S.

July 1, 2026 is less than 10 weeks away. With 80,000 to 100,000 new reporting entities coming online simultaneously, demand for compliance technology is surging. Practices that move early will have their systems tested, refined, and running smoothly before the deadline — not scrambling in the final days. Do not wait.

AML/CTF Is No Longer Just a Compliance Task  

For many years, AML/CTF compliance has been treated as a necessary administrative obligation – a set of documents completed during onboarding, filed away, and rarely revisited unless requested.

That approach is no longer sufficient.

Across Australia, Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) compliance is entering a new phase. Regulatory expectations are increasing, enforcement is becoming more proactive, and professional firms are now expected to demonstrate not just compliance, but control, consistency, and accountability.

At the centre of these changes is AUSTRAC, which modernises Australia’s AML/CTF framework to ensure it remains effective in a digital, fast-moving economy.

For accounting and professional services firms, the message is clear:
AML/CTF compliance is becoming an operational system – not a one-off task.

Firms across the industry are reevaluating their management of client verification, risk assessment, and record-keeping. The focus is no longer on adding complexity but on ensuring AML/CTF obligations are met consistently and defensibly through structured client verification workflows rather than fragmented manual processes.

What Is AML/CTF compliance— in Practical Terms?  

AML/CTF compliance refers to the legal and operational framework designed to prevent criminals from using legitimate businesses to launder money or finance terrorism.

In practical terms, it requires firms to:

• Verify the identity of clients
• Understand who they are dealing with and why
• Assess and manage financial crime risks
• Keep accurate and retrievable records
• Monitor client relationships over time
• Demonstrate compliance if reviewed or audited

For accounting and advisory firms, these obligations are not theoretical. Professionals often act as the gateway to financial systems – onboarding clients, managing structures, handling sensitive data, and interacting with regulatory bodies.

As a result, accounting firms play a critical role in protecting the integrity of Australia’s financial system.

Why Australia Is Reforming the AML/CTF Framework  

Australia’s AML/CTF regime has been in place for many years, but the environment it was designed for has changed significantly.

Key drivers behind the reforms include:

• Digital client onboarding becoming the norm
• Increasingly complex ownership and control structures
• Growth in cyber-enabled financial crime
• Fragmented and inconsistent compliance processes
• Over-reliance on static documentation rather than real risk assessment

The existing framework has often been criticised for being overly complex, document-heavy, and difficult to apply consistently – particularly for small and mid-sized firms.

AUSTRAC’s reform agenda is designed to modernise the system by:

• Simplifying requirements
• Strengthening risk-based decision-making
• Improving consistency across industries
• Making compliance outcomes more effective in practice

The objective is not to increase red tape, but to ensure AML/CTF controls genuinely reduce financial crime risk.

Key AML/CTF Program Reforms Firms Must Understand  

The reforms place renewed emphasis on how AML/CTF programs operate, not just whether they exist.

1. Simpler, More Flexible AML/CTF Programs  

The traditional “Part A / Part B” structure is being replaced with a more streamlined approach.

Firms are expected to:

• Design programs based on their actual risk profile
• Avoid generic, templated documentation
• Clearly document how risks are identified and managed

This flexibility allows firms to tailor compliance – but also increases accountability.

2. Stronger and More Current Risk Assessments  

Risk assessment is becoming the foundation of AML/CTF compliance.

Firms must understand:

• The nature of their clients
• The services they provide
• Where higher-risk scenarios exist
• How risks are mitigated and reviewed

Outdated or static assessments will no longer meet regulatory expectations.

3. Ongoing Customer Due Diligence  

AML/CTF obligations no longer end at onboarding.

Firms are expected to:

• Monitor client relationships over time
• Update client information when circumstances change
• Identify shifts in ownership, behaviour, or risk
• Maintain clear records of verification activity

This reinforces the shift from one-time checks to continuous oversight.

4. Record-Keeping and Audit Readiness  

Record-keeping is no longer about storing documents – it is about retrievability and traceability.

Firms must be able to:

• Produce evidence quickly when requested
• Show how compliance decisions were made
• Demonstrate consistency across client files
• Maintain clear audit trails

Scattered or manual records significantly increase compliance risk.

5. Clear Accountability and Governance  

AML/CTF responsibility must be clearly assigned.

Firms need:

• Defined roles and accountability
• Management oversight of compliance frameworks
• Escalation processes for higher-risk matters
• Ongoing staff awareness and training

Compliance is now a firm-wide responsibility, not an isolated task.

What These Reforms Mean for Accounting and Advisory Firms  

For accounting and professional services firms, AML/CTF reform has direct operational implications.

Firms will need to:

• Spend more time verifying and reviewing client information
• Apply compliance standards consistently across teams
• Handle higher onboarding volumes without sacrificing accuracy
• Respond confidently to regulatory enquiries
• Reduce dependency on individual staff knowledge

Importantly, AML/CTF compliance is no longer just a regulatory issue – it is a reputational one. Clients increasingly expect their advisers to operate with strong governance, transparency, and control.

Why Manual AML/CTF Compliance Is No Longer Sustainable  

Many firms still rely on:

• Emails and PDFs
• Manual checklists
• Spreadsheets
• Disconnected file storage
• Individual staff experience

While workable at low volume, these approaches struggle as compliance requirements increase.

Common failure points include:

• Missed or outdated verification
• Inconsistent application of rules
• Limited audit trails
• Staff dependency and turnover risk
• Time pressure during peak periods

Increasingly, compliance issues arise not from intent, but from process limitations. Client identity checks, supporting documents, and verification evidence are often spread across systems, making it difficult to demonstrate compliance with confidence.

As a result, many firms are moving toward automated client verification frameworks that standardise how AML/CTF checks are performed, recorded, and retained – reducing reliance on manual intervention and improving audit readiness.

How Leading Firms Are Responding to AML/CTF Reform  

Rather than expanding administrative teams or adding more manual checks, many firms are re-engineering how compliance fits into their operations.

Common approaches include:

• Automating client identity and verification steps
• Centralising AML/CTF records and evidence
• Embedding risk assessment into onboarding workflows
• Ensuring compliance actions are logged and traceable

These changes are driven by the need for consistency, accuracy, and confidence – particularly as regulatory scrutiny increases.

Firms adopting structured verification systems early are finding it easier to adapt to reform while maintaining service quality and operational efficiency.

The Future of AML/CTF Compliance: Systems Over Spreadsheets  

The direction of AML/CTF compliance is clear.

Future-ready firms will:

• Treat compliance as an integrated system
• Centralise verification and evidence
• Standardise risk-based decisions
• Maintain real-time visibility over compliance status
• Reduce reliance on manual workarounds

Automation does not remove responsibility – it supports consistency, scalability, and defensibility as expectations continue to rise.

Preparing With Confidence  

AML/CTF compliance in Australia is evolving rapidly.

The focus is shifting from forms to frameworks, from documents to decisions, and from reactive compliance to proactive control.

Firms that treat compliance as a system – supported by clear processes and reliable client verification solutions – will be better positioned to meet regulatory expectations without disruption.

Preparing early allows firms to move forward with confidence rather than responding under pressure.