Being a contractor is a tough job. Not only do you have to run your own business, but you also balance multiple clients, each with their own unique personalities, guidelines, and expectations. In other words, even if you wouldn't want it any other way, life can be a bit messy. That's why we've put together this list of tips to keep you up to date on one of the most important parts of your business – cash flow.
Fill in the Gaps
No matter how well established your business is, you will likely find yourself in a situation where your cash flow is a bit tight. Whether it's the result of a break in work, or that one problem customer who is always late to pay, such a gap can cause unnecessary stress.
If you find yourself facing this problem, it's worth checking out Invoice Financing . This common sense saving service provides an advance on what you owe the client, giving you the cash flow you need without the burden of taking out a loan against your business.
Buy a commission
If you work with certain clients on a regular basis, it may be worth asking them to pay you a commission. This can slightly lower the fee you can reasonably charge for your services, but it's worth knowing that you have the fixed income from your advance fee to support and protect your cash flow. And if you go on for a month or two without completing projects for that client, you will still receive money. This essentially levels your income and protects you from the ups and downs inherent in contract work.
Take Care of Your Books
Nothing is more damaging to your cash flow than not knowing where your money is going. Just like managing a household budget, every penny that flows into and out of your business must be accounted for.
If you are not sure of balancing your own books, it is time to find an accountant, or at least some software package to keep track 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 tracking it when it comes to managing your business finances.
Consider a Virtual Office
This may seem like a strange tip for keeping your cash flow up to date, but having a virtual office can significantly improve the organization of your business without putting much effort into it. effort. You generally get a receptionist included in the package, along with a central address and bookable office spaces and meeting rooms. With a minimal investment, this strategy enables you to present a premium image and attract top paying customers.
Cloud Technology Is Your Friend
When cloud computing entered 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 protect it from equipment failures and other breaches. The reputation of any cloud computing company depends on the safety of user data, so you can rest assured that the work that generates your cash flow is 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 no longer have to worry about payment due dates. While some of the other strategies come at a small price, their long run and scalability make them worth the initial investment.