Talent Development Centre

Tag Archives: bookkeeping

All Talent Development Centre posts for Canadian technology contractors relating to bookkeeping.

Bookkeeping 101 for Independent Contractors

Perhaps the biggest challenge of taking the leap from being a full-time IT employee to an independent technology contractor is learning the ins and outs of running your business. While your prime responsibility continues to be delivering on your IT projects, you can’t ignore your accounting and tax obligations.

If you’re considering a change, don’t be intimidated by the administrative work that comes along with the countless benefits of working for yourself. Instead, take a breath and watch this video from Dice to get some helpful bookkeeping tips for those starting out in the contracting world.

5 Tips for IT Contractors Who Hate Accounting (Video)

Accounting is a thorn in many independent contractors’ sides. After all, if you enjoyed bookkeeping, then you would have become an accountant, not a technology professional. Alas, keeping your books in order and accounting organized is an essential responsibility for an IT contractor. Not only does it keep the government happy, but being on top of it will help your business thrive and simplify planning for things like vacation, retirement, and salary.

If you’re still struggling to keep your money organized, have a look at this video from Ward Williams. They provide 5 quick and simple tips that can make an independent contractor’s life much easier.

Contractor Best Practices

Establishing a strong business presence is an important step to ensuring both you and your Independent Contractor business is protected.  It helps to think of your business in terms of two different contexts: the business structure and your behaviour as the business owner.  Below are some tips to help you establish your business presence:

Structural Tips

  1. Business woman bookeepingHire a professional accountant to ensure you’ve properly set up your incorporation
    • Keep detailed records
    • File proper tax returns
  1. Set-up a separate business banking account.
  2. Maintain appropriate expenses
    • Determine in advance what is billable to your client and what will be considered a business expense
    • Keep mileage logs, as well as any home office bills
    • Determine legitimate business expenses, such as your website, marketing costs, etc.
  1. Risk of loss is a key differentiator
    • Is there risk of loss in your contract with your staffing agency?
    • Maintain your own business E&O insurance (talk to Eagle about how to acquire this insurance for $21.00 per month)
  1. Leverage opportunities for more profit through more hours
  2. Discourage your agency, or client, from mandating your hours of operation at a client site
  3. Avoid numbered companies and name your corporation.

Behavioural Tips

  1. Act like a business, not an employee
  2. Avoid the 9 to 5 workday – vary your hours at a client site.
  3. Avoid politics and people issues at a client site
    • Don’t partake in the water-cooler chatter
    • If something, or someone, is in the way of completing your mandate, focus on the issue, not the person
  1. Don’t expect to attend your client’s social gatherings or events such as the annual holiday party. If you do participate, pay to attend  and use the opportunity to network
  2. Take on additional contracts with multiple clients, even if only part-time
  3. Invest in regularly upgrading your skills through training activities paid by your incorporated business.
  4. Bring your own tools to a client site – laptop, office supplies, etc.
  5. Maintain a company internet profile.
    • Website
    • LinkedIn company page
    • Facebook company page
    • Corporate Twitter account
  6. Advertise
    • Maintain your own business cards
    • Maintain a listing in various directories (i.e. Yellow Pages)
    • Consider sponsorship advertising opportunities

Lastly, if you do get audited, let your staffing agency Recruiter know about it. While there are no guarantees, the industry association might be interested in getting involved.

If you have other tips or advice, please share them in the comments below.