{"id":1913,"date":"2021-07-31T10:00:00","date_gmt":"2021-07-31T10:00:00","guid":{"rendered":"http:\/\/3.229.211.58\/?p=1913"},"modified":"2024-09-03T09:19:42","modified_gmt":"2024-09-03T09:19:42","slug":"top-10-benefits-of-identity-verification","status":"publish","type":"post","link":"https:\/\/compliancely.com\/blog\/top-10-benefits-of-identity-verification\/","title":{"rendered":"Top 10 Benefits of Identity Verification"},"content":{"rendered":"\t\t
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If you have a favourite celebrity that you follow on social media daily, you may come across certain look-alike profiles that pretend to be the said celebrity. Many people happen to believe these fake profiles and get scammed.<\/p>\n

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This is why social media platforms have integrated a verification process, which qualifies one primary account as the \u201cverified\u201d profile, hence, we now have the \u201cverified\u201d badge next to the profile.<\/p>\n

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Although this is an unconventional example, the gist remains the same \u2013 identity theft, which accelerates the need to identify and verify a unique profile.<\/p>\n

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When we apply this validation logic to the business ecosystem, organizations are obliged to streamline and standardize their identity protocols. In the business world, identity validation not only prevents you from associating with imposter entities, but also helps you vet an entity or individual\u2019s tax, business, and financial compliance history.<\/p>\n


This enables you to check if the entity or the individual is as legit as they make themselves to be.\u00a0Apart from validating an identity, verifying a business also brings in certain perquisites, which amplifies and streamlines your business operations on a broader scale. And today, we\u2019re looking at the top 10 advantages of integrating identity verification into your business ecosystem, and the various ways it helps your business stay compliant.<\/p>\n\n

1. The standardized vendor onboarding process<\/h4>\n\n

As businesses grow, so does their dependency on external resources. This forces businesses to hire independent contractors or freelancers for certain projects\/tasks.<\/p>\n

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However, companies or firms do not have freelancers on their payroll, so businesses have to maintain vendor files to process the payments.<\/p>\n

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These payments have to be reported eventually through IRS Form 1099-NEC<\/a>. But to do any of this, the vendors have to be vetted to ensure tax and business compliance. This is where identity verification comes into play.<\/p>\n

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Verifying your vendors allows you to confirm their business and tax details, such as the TIN\/EIN, name of the vendor or business name, and other information. This, in turn, helps you avoid the year-end business rush, accelerating your vendor on-boarding process and Form W-9 solicitation.<\/p>\n\n

2. Improved business reputation<\/h4>\n\n

Businesses that follow standardized operating procedures set up a threshold, which has to be followed by every incoming individual and entity.<\/p>\n

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Integrating identity verification sets you apart from your competitors who may not be as aware of the importance identity holds in the business world.<\/p>\n

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Further, integrating identity verification in your operational processes means you prioritize verified customers and profiles, which further adds value to your reputational assets.<\/p>\n\n

3. Penalty Prevention<\/h4>\n\n

Associating with an entity or an individual engaging in unlawful, illegal, and terror-propagating regimes will cost you not just financial penalties but imprisonment for violations.<\/p>\n

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Something as simple as IRS TIN\/Name discrepancies can cost you as much as $500,000 and higher (even if you\u2019re a small business).<\/p>\n\n

Recommended: Reasonable causes and regulations for incorrect TIN\/Name combinations (1<\/a>)<\/h4>\n\n

Check if you\u2019re associating with an individual or an entity listed in the following authorized databases, and save yourself from being heavily penalized by the respective authorities. Do keep in mind that each violation can cost you a minimum of $250,000 to $1.5 Million and even higher plus imprisonment (depending on the severity of the violation).

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