Getting an Accountants’ Letter Confirming Income is one of those things that sounds more complicated than it actually is, but it’s an important part of proving your financial stability, whether for a loan, lease, or any financial arrangement. This letter basically serves as a formal document from a qualified accountant, confirming your income over a certain period. It’s especially useful for individuals or organisations that may not have traditional payslips or financial documents, like freelancers, business owners, or even churches. Let’s talk about what’s needed.
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Why You Might Need This Letter
Banks, lenders, or even landlords might ask for an Accountants’ Letter Confirming Income when you don’t have straightforward proof of earnings, like a regular salary slip. This could apply if you’re self-employed, running a small business, or handling finances for an organisation like a church or non-profit. Instead of handing over a bunch of bank statements and hoping for the best, an accountants’ letter sums up your income in a neat, professional document that carries weight.
What You Need for an Accountant to Draft the Letter
- Engage a Qualified Accountant: First and foremost, you need a registered accountant. This is important because banks and other financial institutions won’t accept just any letter – it has to come from a professional who is in good standing with a recognised body like SAICA (South African Institute of Chartered Accountants) or SAIPA (South African Institute of Professional Accountants). You’ll want someone who knows the ropes and has experience dealing with this type of document.
- Financial Records: Before your accountant can write the letter, they’ll need to see your financial records. For personal income, this could mean bank statements, tax returns, or invoices if you’re self-employed. For businesses or organisations, it’s going to be things like audited financial statements or income statements. The accountant uses these records to verify your income over a specific period – usually the past year or more.
- Tax Compliance: It helps a lot if you’re up to date with your taxes. While the accountant’s letter itself isn’t necessarily about your tax status, many institutions (especially banks) prefer to see that you’re in good standing with SARS (South African Revenue Service). Make sure you’ve submitted your tax returns and are fully compliant. If you’ve been working closely with an accountant, they can quickly access this information.
- Specify the Period: The letter typically covers a specific period, like the past 12 months or the last two financial years. Be clear with your accountant about the timeframe you need verified. The bank or lender will want to know exactly what period this income confirmation covers, so don’t leave this open-ended. They’ll usually want at least one full year of income to assess your financial health.
- Personal or Business Details: This one is easy to overlook but very important. Make sure your accountant includes all relevant personal or business details in the letter. For personal letters, this means your full name, ID number, and address. For a business, it means the registered business name, registration number, and any other official details the bank might need.
- Income Breakdown: The letter will need to clearly outline your income for the requested period. If you’re self-employed, this might mean stating your average monthly income. For businesses or non-profits, it could be a summary of profit, turnover, or other income streams. It’s essential that this is laid out clearly, so the bank can quickly assess whether your income matches their criteria.
- Purpose of the Letter: Most banks or institutions require the letter to state why it’s being written. Your accountant should mention whether the letter is for a loan application, rental agreement, or any other specific purpose. This makes it easier for whoever is reading the letter to understand its relevance.
- Contact Information and Signature: The letter must include the accountant’s full details – this includes their name, contact number, email address, and most importantly, their professional registration number. The letter should also be signed and, in most cases, printed on the accountant’s official letterhead. This adds legitimacy and shows that the letter is from a credible source.
Accounting Firms that Provide Letters Confirming Income
Here’s a list of firms in South Africa that offer Accountant’s Confirmation of Earnings letters:
- Fixonate
Website: Fixonate
Services: Confirmation of earnings letter for individuals and companies. Registered with SAICA (South African Institute of Chartered Accountants). - Brendmo Secretarial
Website: Brendmo Secretarial
Services: Professional accountant’s letter confirming income. Pricing: R2,500 for a confirmation letter. - Providential Consulting Inc
Website: Providential Consulting
Services: Accountant confirmation of earnings letter for personal or business use. - Chokes Chartered Accountants
Website: Chokes Chartered Accountants
Services: Income confirmation letters for individuals and companies, including salary confirmation for self-employed individuals, revenue confirmation for companies, and bank submissions.
How to Use the Letter
Once you have the letter, it’s typically submitted along with your loan application, lease agreement, or other financial paperwork. Banks like Nedbank or Standard Bank often require this type of document when you don’t have traditional proof of income, such as salary slips. For landlords, this letter can also serve as proof that you have a steady income, making it easier to secure a rental.
How Much Is Accountants’ Letter Confirming Income in South Africa
The cost of getting an Accountants’ Letter Confirming Income can vary depending on the accountant and their firm, but typically, you’re looking at a range between R500 to R2,000. Smaller firms or independent accountants might charge on the lower end, while larger or more specialised firms could be on the higher side. The price depends on how much work they need to do to verify your income and prepare the letter, so having your financial records in order can help keep costs down.
Final Tip
Remember, the point of this letter is to simplify things. Instead of sifting through a pile of financial documents, the accountant’s letter offers a concise, professional summary that gives the bank or lender exactly what they need. If your finances are in good shape and your records are organised, the process of getting an accountant to confirm your income should be pretty straightforward.
So, when you need to prove your income, whether it’s for a church loan or a personal application, getting an Accountants’ Letter Confirming Income is the quickest way to show that you’re financially reliable. And when it’s done right, it makes the whole process smoother for everyone involved.