📝 Overview
Before payroll processing can begin, your business is required to complete a verification process known as Know Your Business (KYB). This article covers what KYB is, why it's required, what information is verified, and what to expect during the review process.
🛠️ What Is KYB & Why Is It Required?
KYB is a regulatory compliance process used to validate and verify key business information before payroll can be processed or funds moved on your behalf. It applies to all businesses and is required by law for regulated payroll and payments platforms.
At a high level, KYB helps ensure that:
Payroll funds are only processed for properly registered, verifiable businesses
Your business information aligns with official government and registry records
Fraud is prevented and regulatory requirements are met
Fund routing is accurate and disputes are minimized
⚠️ Please note: KYB does not evaluate your business operations, online presence, or financial activity. It is strictly a registration and entity verification process.
🔑 What Information Is Verified?
KYB focuses on validating your business's core entity information against authoritative sources. This includes:
Legal business name
Federal Employer Identification Number (FEIN) for U.S. employers
Business Number (BN) for Canadian employers
Registered business address
Entity status and jurisdiction
Authorized signatory information
This information is validated against sources including:
IRS records (U.S.)
CRA records (Canada)
State, provincial, and federal business registries
🧾 How the Verification Process Works
KYB uses a combination of automated verification and targeted manual review. Most employers complete verification automatically based on the information submitted during onboarding.
Manual review is triggered when a business verification report produces negative, mixed, or incomplete results. In these cases, additional review or documentation may be required to resolve the gap.
Connection to Underwriting
KYB runs in parallel with an underwriting review, and both rely on similar onboarding information. They serve different purposes:
KYB: validates your business entity information and registration status
Underwriting: evaluates fraud and credit-related risk
Because these two reviews are interconnected, delays or issues in KYB can affect underwriting timelines.
When Additional Review May Be Required
Additional review may be required when:
Tax authority records do not match the information submitted
Registry data cannot be confirmed
State or provincial database records do not match submitted information
Data quality or availability is limited
🧑💻 Requests for Information (RFIs)
A Request for Information (RFI) is a formal request for documents needed to complete verification. RFIs are issued only when necessary and are designed to address specific information gaps. They may occur during the KYB process, underwriting, or a later review.
Common Documents & Why They May Be Requested
The following documents help reliably connect your business to authoritative sources:
IRS CP-575, Letter 147C, or SS-4: Links your FEIN, legal name, and legal address to IRS records (U.S.)
CRA Business Number Confirmation: Confirms Canadian tax registration
Government-Issued ID (authorized signatory): Used when verification results are incomplete; confirms that the account user is the authorized signatory on record
💡Pro Tip: Submitting clear, complete documents helps ensure your review is completed as quickly as possible. Incomplete or unclear submissions can cause delays.
📊 Review Timelines
Most KYB reviews are completed within 48 hours of receiving complete and accurate information. Reviews that require additional documentation or involve more complex cases may take longer, depending on the complexity and how quickly you respond.
❓ Frequently Asked Questions (FAQs)
Find answers to common questions or additional details that may not be covered in the main instructions.
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Is the KYB process automated or manual?
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The verification process is hybrid; it combines automated risk screening and business verification with targeted manual review when needed.
When does my case go to manual review?
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Manual review is triggered when a business is flagged as elevated risk, or when more information is needed to address incomplete or mixed verification results.
What is underwriting and how does it relate to KYB?
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KYB and underwriting run in parallel during onboarding. KYB validates your business entity and registration information. Underwriting evaluates fraud and credit-related risk. Both use similar data, so delays in one can affect the other.
When does additional review get triggered?
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Additional review may be required when tax authority or registry records don't match the information submitted, or when data quality or availability is limited.
What happens if more information is needed?
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You may receive a Request for Information (RFI) asking you to submit specific documents, such as a government-issued ID, ownership documentation, or tax registration records, to complete the review.
How long does the verification process take?
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Most reviews are completed within 48 hours of receiving complete and accurate information. Submitting clear, complete documents upfront is the best way to avoid delays.
Are businesses screened for restricted industries?
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Yes. All employers are screened for connections to restricted or high-risk industries as part of the verification process. If this applies to your business, you will be notified.