Being a contractor is a tough gig. Not only do you have to run your own business, but you’re also balancing multiple clients, each with their own unique personalities, guidelines, and expectations. In other words, even though you wouldn’t have it any other way, life can be a little messy. That’s why we’ve put together this list of tips to help you stay on top of one of the most important parts of your business – cash flow.
Fill In The Gaps
No matter how well established your business is, you’re probably going to run into a situation where your cash flow is a little tight. Whether it results from a lull in work, or that one problem client who’s always late with their payments, a gap like this can cause unnecessary stress.
If you find yourself facing this issue, it’s worth looking into invoice finance. This sanity-saving service provides an advance on what you’re owed from the client, giving you the cash flow you need without the burden of taking out a loan against your business.
Get A Retainer
If you regularly work with certain clients, it could be worth asking them to pay you a retainer. This may slightly reduce the fee you can reasonably ask for your services, but it’s worth it to know that you have the regular income of your retainer fee propping up and protecting your cash flow. Plus, if you go a month or two without completing any projects for that client, you’ll still receive funds. This essentially evens out your income, protecting you from the ups and downs inherent to contract work.
Look After Your Books
There’s nothing more detrimental to your cash flow than not knowing where your funds are going. Much like managing a household budget, every cent that flows into and out of your business needs to be accounted for.
If you’re not confident balancing your own books, it’s time to look into getting an accountant, or at the very least a software package that will keep on top of things for you. It may not seem like it makes that much of a difference, but recording your cash flow is just as important as maintaining it when it comes to managing your business finances.
Consider A Virtual Office
This may seem an odd tip for keeping on top of your cash flow, but having a virtual office can greatly improve the organisation of your business without you putting in much effort. You’ll generally get a receptionist included in the package along with a central address and bookable office spaces and meeting rooms. With minimal outlay, this strategy allows you to present a high-class image and attract top-paying clients.
Cloud Technology Is Your Friend
When cloud computing arrived on the digital scene, many people avoided it due to perceived security risks. However, technology has come a long way since those early days. Storing data in the cloud is now the best way to keep it safe from equipment failures and secure against other breaches. The reputation of every cloud computing company is dependent on the safety of user data, so you can rest assured the work that generates your cash flow will be in good hands. Follow the tips above, and you can take the pressure of managing your cash flow as an independent contractor. With invoice financing in your arsenal of cash management tools, you won’t have to stress about payment due dates again. While some of the other strategies do come at a small cost, the long term pay-off and scalability make them worth the initial investment.