Avoiding Financial Losses as a Professional Contractor

Working as a contractor can be highly rewarding especially as you can pick and choose the projects you accept and earn a high wage at the same time. Unfortunately, there are a number of risks associated with this type of work that require the proper planning to avoid. In this article, we will look at four of these to give you some advance warning about what to look out for to avoid severe financial losses in the future.

Always Read the Contract

Prior to accepting a job, you’ll need to be given a contract outlining your rights and obligations. It’s essential that you read carefully over this, making sure to understand each clause. If anything sounds odd or unfair, you should always make an enquiry. If the client wants your service, they’ll do their best to negotiate with you. It’s also possible to avoid financial loss by simply crossing out any unwanted clauses before you sign the contract. More often than not, the client won’t even bother checking to see if you’ve changed anything. If they do however, this is the perfect opportunity to discuss the conditions and gain a better chance of being paid.

Financial Losses Image Source: Financial Losses

Financial Losses
Image Source: Financial Losses

Set Up Proper Admin Techniques

It’s also essential that you take care of the small yet important administrative tasks as they come in. Set out proper guidelines so you don’t miss out on any vital details that may cause you financial losses later on. Some examples of what you can do are to:

• Create a separate file for every project and keep it updated.
• Use a standard invoice template for each job
• Send the template by email, fax and even in person
• Never accept oral contracts under any circumstances

All of these simple rules will help you avoid financial failures in the future as you have everything in order with your contracts, invoices and any other essential project documentation.

Consider Wealth Management

There’s no doubt about the fact that dealing with multiple clients can be a headache especially if someone refuses to pay or stalls the transaction. To avoid this, you can hire a UK umbrella company to look after your money management needs. These helpful organisations will help maximise your savings by taking care of a range of financial matters for you. While you’re busy dealing with any projects you’ve been given, they will handle your:

• Taxation solutions
• Investment plans
• Insurance cover
• Invoicing & payments

All your monetary needs will be taken care of by these organisations. Through their expertise, they can help save you money over the long run in all of the above areas.

Set Out Detailed Instructions

Our final tip will be to clarify all aspects of the project from the beginning. Often, you’ll be handling a project through a client who’s not actually the owner. Thus, you may get feedback and instructions from two separate parties: A real recipe for disaster. Always respond to any instructions you get with a clear path of action that takes into account both cost and time. Never just go ahead with the changes until you’ve determined the full impact when it comes to your finances and scheduling. It’s also important to respond to verbal instructions in the written form asking for acknowledgement. In this way, you’ll have a hard copy on the day the instructions were given so you can protect yourself and your budget later on.

These simple tips will help you avoid some massive financial calamities later on. As you can see, a little planning will go a long way to protecting yourself regardless of the type of contractor that you are.

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