How to Proof Income When Self-Employed
A self-employed person sometimes have to prove that they earn income in what they do. A loan may be one of the reasons that you may have to prove that you have some income. Not a large population who likes being employed. It has so many challenges but keeping up needs heart. Doing what you like most makes one proud of themselves even if it is not earning you a lot of money. Proofing that you earn some income for a self-employed person consists of several ways. Following are some of the things that show that this company actually have some income of your own.
To show that you do pay employees, a pay stub is the document necessary. It may resemble a payslip, but it is really not a payslip. It contains that amount your employees earn with the taxes deducted. The pay stub is a very brilliant way to prove that your income is stable. Individuals learn to make pay stubs on their own. You could make yourself a pay stub if one is required.
Other than pay stubs, profit, and loss statements can also be proof of income. Interesting how your financials go around your business. You need to keep track of all your financials. Know all your expenditure and how they affect your profits. Know how much your expenditure is extended. Individuals struggle with finances management. The most profound way to follow your finances is though the profit and loss statements. Profit and loss statements can be proof of income to any company or bank.
Bank statements can also be used to prove income. If your business has income, then it must have bank statements. To most new businesses, using this as proof of income could be a problem. Bank statement requires history in the bank, that is, years of income. You may have to produce a bank statement to prove that you really have income. Some of the lenders may also need to see bank deposit history. It adds flavor to the fact that the business is performing.
Invoices and contracts also show that the business is running. These documents are worth the proof of income no matter how new your business is. Clients can be in contracts with this company, and this means that you have income flow. Contracts need money to be made; hence in business it means you make contracts because you have income, and you may be borrowing to pay the contracts up.