Marketing is about making other people and businesses look great. It is the art of spreading a message and getting that message across. In order to do that, you need to have everything sorted within your own business first. As such, there are 4 reasons why proof of income is very important in professional marketing, which you should know about.
1. What Is Proof Of Income?
Proof of income really is just that – a document or documents that confirm that you are earning an income. Professional marketers would want to have their clients believe in them, so they have it confirmed by verified sources, which are generally companies registered with the government. There are a few ways to do this, from a guided and/or automated process of creating a pay stub which you can click here to learn more about, all the way to hiring someone to create your proof of income for you. However, it’s important to know what sort of documentation is seen as valid proof of income:
- Pay stubs
- Proof of income letter
- Last year’s tax return
- Wage and tax statement
- Annuity statement
- Court-ordered agreements
- Wage and tax statement for self-employed
- Profit and loss statement
- Bank statements
Which of these documents would be the most suitable in your case will largely depend on the kind of marketing business you run – are you self-employed or are there other employees working for you, among other things? In addition, the specific laws in your state might have some rules that determine what’s needed. Generally speaking though, a pay stub is always a good thing to have and is considered valid in most cases.
2. Measure Growth
Having proof of income is important because it allows you to see how your business has grown and where. A business can show a steady increase in revenue and be on the right track, but without having any proof of income, you would not know just how well that is going. Not every marketing business has the same potential for growth – some businesses are just set up to do one thing, and doing it well is enough for success (and maybe earning a nice side income) while others might be looking to expand their business and take on more employees, for example. Having proof of income allows you to have a clear idea of this potential growth rate so that you can assess the kind of investment opportunities available. This way you will be able to determine when it is the right time for expansion (and when not) based on concrete facts.
3. Track Market Changes
Market changes are something that professional marketers always have to look out for, as consumers are always looking for the newest products or services. Proof of income can help you confirm which services are popular among your client group so that you can focus on exploring those options more, instead of wasting time on learning about markets that are already saturated. After a few years in the business, you’ll be better able to establish a timeline of how things have changed in the marketing world, and perhaps even recognize some patterns that will help you make an educated guess on what the next trend will be. There are so many different types of marketing. From digital marketing to writing and designing, knowing what’s hot can help you identify which strategy or combination might work best for different types of clients and products.
4. Avoid Misunderstandings
As your business grows, you’ll be getting more and more clients – perhaps even big ones that have multiple different products and projects they want to advertise. In all honesty, it isn’t always easy to keep track of all the payments that need to be made. This is especially true when there are multiple people involved in the different projects – it’s very easy for misunderstandings to arise, unfortunately. Of course, it can go both ways. If a client is swamped with work on their end, they might be convinced they’ve made the payment even though they really didn’t. Having a reliable way of documenting the income, such as those mentioned above, is a good way to avoid such misunderstandings.
5. Tax Requirements
The tax requirements for businesses are different everywhere, but one thing remains the same: having proof of income is critical. As a marketing business, you will be able to determine how much money you can claim as your own revenue and which expenses to deduct. Without proper documentation, this could result in getting fined by the IRS or simply not being able to claim your full financial rights. This is definitely one of those cases where not having proof of income will be a major setback and, unfortunately, you won’t always have the luxury of time to get all the necessary documents together. It’s best to start collecting all these important papers as soon as possible. That way, if anything unexpected happens and you need some proof of income quickly, there won’t be any time wasted.
Proof of income is one of those things that might not seem like it’s very important, but as soon as you need to prove your earnings or some other related information, you’ll be glad that everything is properly documented. There are many different types of marketing, and the different requirements will vary greatly depending on your unique situation. However, one thing always remains constant – having clear records is always necessary for successful professional marketing.