Talent Development Centre

5 Ways Independent Contractors Can Keep on Top of Expenses

Staying organized isn’t everybody’s forte. While some contractors will naturally go through life, somehow managing to keep everything perfectly arranged, others are more laid back and let some little items slide. Either is fine, depending on the situation, but when it comes to accounting, those extremely organized (sometimes annoying) people are going to have less stress.

There are different elements to accounting and all require some planning and processes. Expenses, for example, specifically need regular attention in order to ensure you’re keeping within your budget, but also to ease your life when it comes to closing your books and doing your taxes. Here are 5 tips that independent contractors, in technology or any other discipline, can use when managing their freelance business:

  1. Have a routine. Set a date to catch-up on all of your expenses and make sure you’re on track each week. This will stop you from falling behind.
  2. Know your predictable expenses. Understand what regularly happens and what you want to save. This will help with budgeting.
  3. Keep a separate bank account and/or credit card to easily separate personal and business expenses.
  4. Find a way to track expenses that works for you. Try any of these:
    • The old shoebox trick: Throw all of your receipts into it and you deal with them weekly or monthly
    • A spiral notebook: One step above the shoebox, here you tape the receipt to a page and add notes about what it was
    • Your cell phone: The more high tech version of the shoebox or notebook is to take a picture of every receipt, immediately after receiving it. There are apps you can download that will help you organize all of them too.
    • MS Excel: If you’re a spreadsheet geek, record everything in Excel. You can really get crazy staying organized and categorizing items with this.
    • Accounting software: This requires an investment, but the right accounting software makes a huge difference in staying organized.
  1. Get help. Specifically from an accountant, but also chat with other contractors in your field for ideas on how they’re organizing themselves.

Can you add any tips, based on your experience, that keep you organized in your technology consulting business? Please share them in the comments below!

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