I’ll confess right away that I’m an accountant. What will become clearer as you read the list of five ways to achieve a happier work-life balance is how this balance can be achieved through good financial management and efficient use of technology primarily. These two things lead to clarity and therefore to contracting and freelancing success, which, it goes without saying, represents a happy work-life balance.
At number 1, contracting and freelancing your way to a happier work-life balance will involve expert accounting, so make sure you have a good accountant, preferably one that offers cloud accounting. Technology is the perfect partner of accountants as it automates a lot of the tasks that were previously quite labour intensive and time-consuming; this, in turn, frees up time to allow your accountant to practise the expertise you’re paying him or her for; and also it means that everything’s up to date in real time ready to be shared with authorised personnel.
At number 1a, of equal importance, is to make sure money is set aside for your tax bill every month, normally 20%. Whether a sole trader or a limited company contractor, get it absolutely straight that not all of the money flowing into the business belongs to you. You must appreciate that there are all or a combination of these expenses/overheads that must get paid: rent, maintenance, business rates, tax, national insurance, business insurance, maybe wages to pay, etc. etc.
At number 2, discipline and determination you must have a routine and stick to it, and keep on (making adjustments to your business plan) working away at your goals. Working from a home office can make some contractors and freelancers a bit lackadaisical about work/home time and start/finish times. If you run a home office, then like any other, you should arrive in the morning and be available during business hours, but some businesses work at unsociable hours and some business owners prefer to work outside office hours. As long as the hours you choose work are effective for you then work them but don’t over-work. Remember the work-life balance you set out to achieve.
At number 3, is keep your hardware and software up-to-date and secure. Like it or not, technology has become central to most, if not all businesses, and can really help (when working efficiently) as much as catastrophically hinder (when slow, inefficient, out-of-date, faulty … or hacked …). Budget to keep your software and hardware current.
At number 4, pacing yourself and time management: with the number of self-employed increasing rapidly, it might be tempting to lower your prices, take on too much work, or bend over backward to try to please everyone. You should try to avoid this approach. Do the sums to work out the going fee professionals in your sector charge; try to keep an efficient workflow diary or spreadsheet, and be firm with clients. This is possibly one of the most difficult points to fulfil, but online bookkeeping and accounting software with a CRM component could really help you to manage your time and your clients.
At number 5, aim to keep a surplus of at least £5,000, one-man bands and sole traders can find this quite difficult to achieve. It’s a goal that many small businesses find quite difficult to manage as well, but businesses that do manage to keep a surplus are in a much more secure position. Keep a cash reserve in a savings account and try to keep it there. Ensure you keep overheads low as well.
Contracting/freelancing is a great route for thousands of workers who seek greater job satisfaction. There are robust links between contracting and a better work-life balance, but underpinning the whole concept of working for yourself must be good Contractor Accounting, financial management and efficient use of technology. If those two columns of strength are in place, providing you’re motivated and determined as well, you’ll be pretty certain to achieve the work-life balance you desire.
About the Author
Sumit Agarwal – A specialist accountant and tax adviser for freelancers, contractors and small businesses since 2005, He is an expert in business growth and development strategies. A renowned tax expert for owner managed businesses and contractors, He won the British Business Forum’s Young Entrepreneur Award in September 2012, presented at the House of Commons by MP Vrinder Sharma. He recently Awarded as Best in Accounting 2017 by the British Indian Awards.
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