Understanding beneficial ownership information (BOI) reporting: A guide for accountants

A new era of financial transparency is here, and accounting firms are stepping up to guide their clients through the maze of compliance. As the Corporate Transparency Act has come into effect in the US, beneficial ownership information (BOI) reporting is now a crucial requirement for many American businesses. For accounting professionals, this presents a golden opportunity to not only support your clients but also unlock new revenue streams by offering BOI filing services.

At Ignition, we've streamlined this process with our newly launched BOI proposal templates, helping firms simplify client engagements while ensuring compliance. But what exactly is BOI reporting, and how can your firm leverage this change to serve clients better? Let's break it down.

The BOI reporting requirement, enforced by the Financial Crimes Enforcement Network (FinCEN), was introduced under the Corporate Transparency Act to increase transparency and combat financial crimes like money laundering and tax evasion. In essence, certain businesses must now disclose information about individuals who directly or indirectly own or control the company. The deadline for filing the BOI report is January 1st. 

This change is significant, especially for accounting firms that serve small and mid-sized businesses. It’s a great opportunity to help your clients navigate these new rules while enhancing your service offerings. Ignition’s proposal templates for BOI reporting filing simplify communication and streamline the reporting process, helping firms monetize this new compliance requirement.

Not all businesses are required to comply with BOI reporting. The requirement primarily affects small corporations, limited liability companies (LLCs), and similar entities formed in the US that aren’t subject to extensive federal regulation. Entities exempt from this filing include:

• Publicly traded companies
• Large operating entities with substantial physical presence in the US
• Regulated entities like banks, insurance companies, and investment firms
• Charitable organizations and public accounting firms

For accountants, understanding which clients fall under these new regulations is key to providing proactive compliance support. Firms can leverage Ignition’s BOI proposal template to scope out which of their clients are impacted and engage them early on.

Navigating BOI reporting can feel daunting for clients, but you can help simplify it for them by communicating and collecting the core components and requirements needed to file a BOI report: 

1. Identifying beneficial owners: Any individual who owns or controls at least 25% of the entity or holds significant influence must be disclosed as a beneficial owner.  
2. Required information: The filed report must include:
   • Full legal name
   • Date of birth
   • Residential or business address
   • Unique identifying number (e.g., from a passport or driver's license) 
3. Reporting timelines:
   • Entities formed before January 1, 2024, have until January 1, 2025, to submit their initial reports.
   • New entities must file within 30 days of formation. 
4. Updates: Changes to beneficial ownership details must be reported within 30 days.

As accounting firms navigate the world of BOI reporting, common questions and misconceptions can arise. Clients may be unsure whether the rules apply to them or may feel overwhelmed by the complexity of compliance. Addressing these uncertainties head-on can help instill confidence and build trust. Here are some of the most frequently asked questions—and their answers—to help clarify this process.

No, only certain entities are required to comply, mainly smaller companies that are not heavily regulated by other federal laws.

Non-compliance can result in pretty severe penalties, including civil fines of up to $500 per day and potential criminal penalties of up to $10,000. 

By using Ignition’s proposal template for BOI reporting, firms can automate the engagement process, streamline client communication, and secure upfront payments to ensure timely compliance.

Compliance can feel daunting for firms and their clients, especially when tackling new requirements like BOI reporting. That’s why having the right tools is critical. Ignition’s BOI proposal template simplifies the process, making it easier for firms to engage clients, clarify expectations, and ensure timely filings. Let’s explore how these templates can transform your approach to compliance while unlocking new revenue opportunities. Here’s how Ignition can transform how your firm handles BOI reporting:

1. Clear communication: Pre-written descriptions explain BOI requirements in client-friendly language, reducing confusion and resistance.
2. Efficient bulk proposals: Quickly engage multiple clients with tailored proposals, saving time during peak compliance seasons.
3. Automated payment collection: Secure payments upfront, reducing accounts receivable and ensuring your firm gets paid for its efforts.

By leveraging Ignition, you not only simplify compliance for your clients but also turn this regulatory change into a potential new revenue stream to unlock.

Preparing for BOI reporting doesn’t have to be a last-minute scramble. By taking proactive, practical steps, your firm can support clients efficiently while maintaining compliance standards. These steps can help you stay ahead of the curve and ensure your clients meet their obligations with ease. Here's how to get started.

1. Educate your clients: Reach out to clients proactively using Ignition’s proposal templates to inform them of the new BOI requirements.
2. Collect the right data: Establish secure channels to gather sensitive information, such as ownership documents, birth dates, and ID numbers.
3. Define your services and pricing: Use Ignition’s templates to set clear expectations and ensure clients understand the scope and cost of your services.
4. Automate the entire process: Leverage Ignition’s tools to streamline proposal acceptance, payment collection, and compliance tracking.

Compliance challenges are inevitable when dealing with sensitive data and strict deadlines, but they can be managed effectively. From addressing client concerns to ensuring data security, overcoming these hurdles is critical for building client trust and delivering value. Let’s dive into some of the most common challenges and strategies for resolving them.

• Client reluctance to share sensitive information: Explain the legal requirements and the potential penalties for non-compliance to ease concerns.
• Data security: Ignition’s platform provides a secure environment for data collection, ensuring client information remains protected.
• Tight timelines: Utilize Ignition’s bulk proposal features to efficiently onboard clients and meet the deadlines for compliance.

As compliance deadlines approach, accounting firms that proactively assist clients with BOI reporting can stand out from the competition. Ignition’s templates not only help firms communicate effectively but also monetize these new compliance services. This is a strategic opportunity to build stronger client relationships while increasing your firm’s profitability.

The clock is ticking toward the BOI reporting deadline. For accounting firms, this is a unique opportunity to provide value-added services, deepen client relationships, and grow revenue. With Ignition’s BOI proposal template and suite of proposal template options to choose from, you can simplify the entire process, ensuring compliance while driving new business.

Are you ready to streamline your compliance services and enhance your client engagements? Try Ignition today to see see how our platform can transform your practice.