Some people have a gift for administration. But if you’re like most of us, then managing your timesheets and invoices is a chore that is easily ignored, overlooked or rushed through at the last minute.
If you’re moving from a permanent job, you’ll quickly find that contract administration becomes a much more vital part of your role. After all, if you don’t keep on top of your contractor timesheets, or successfully manage your contractor invoices, then you’ll find that you’re not getting paid on time, or the amount you’re expecting.
At ContractingWISE we know that it helps to have a plan and a strategy to deal with these tasks. Here are some hints and tips about how to manage your contractor income.
The difference between timesheets and invoices
Clients typically require a timesheet which gives details of your work for them so they can check that you are meeting the terms of the contract. This will mean giving information about the hours and days you have worked and what sort of work you have done.
The completed timesheet will need to be authorised by your line manager.
If you have contracted your services through your own limited company, the timesheet can be used to generate an invoice, which is your demand for payment for fulfilling your end of the contract.
If you’re working through an umbrella company, the timesheet will be sent to them. They will take care of invoicing and ensuring that payment has been received.
How to manage your contract to get paid on time
As a contractor, you are managing director of a company which provides clients with a service – your skills. So it’s important to think like a managing director and that means focusing on your bottom line.
Set aside a regular time slot to do your invoicing. Put it in your diary and make it a priority, because if it doesn’t get done you’ll risk working for free.
You should set up a contractor invoice template so that you can easily update your invoices at regular intervals to send to clients. It’s vital that your invoice should include payment terms, particularly any information about interest or additional charges for late payments.
It’s also important to be able to check which invoices have been paid. Try to get clients to use a payment reference which will allow you to reconcile bank statements with your invoices.
Tracking your expenses
Expenses can be more challenging, especially if you are not incurring them on a regular basis. If you’re running your own limited company then these expenses need to be recorded so you can offset them against corporation tax. If you’re working through an umbrella company, you should send them an expenses claim at the same time as your invoice.
ContractingWISE works with several trusted accountancy firms who can help you manage your business affairs – if you’re struggling with invoicing or getting paid then please contact us and we’ll put you in touch.