Managing Your Expenses as an IT Contractor
In the world of IT contracting you could find yourself on the road for a lot of the week. You’ll be going from job to job and racking up the expenses as you go.
If you’re new to this line of work, keeping up with your expenses can sometimes be overwhelming. As a matter of fact, some expenses might even slip past you. When that happens, you’ll end up paying out of pocket for something you could be claiming back. So it’s important to fully prepare yourself for the expenses you’ll be accruing for each contract.
Here at Brookson, we’ve put together some tips that will help you manage your expenses as an IT contractor a bit better.
RELATED ARTICLE: ADDING UP THE NUMBERS: MANAGING YOUR MONEY WHEN YOU’RE SELF-EMPLOYED
Know What to Claim
Before claiming your expenses, consider what you can claim. Doing this research before you incur expenses will help you out immensely. You will avoid trying to claim something that you can’t and losing out on others in the process.
You can claim travel, food and accommodation as expenses as long as you keep valid receipts. Ensure that you keep all your receipts together in a secure location. That way, when it comes time to check and submit them you will be fully prepared. You can also claim equipment purchases, as long as they relate to the work you’re doing and you keep full records of your purchase. What’s more, some accountants like Brookson allow you to upload your receipts directly to their online portal for safe keeping.
Know When to Claim
If you’re working as a limited company, you can claim back your expenses at any time. However, most people file their claims quarterly so that it lines up with the cycle of VAT returns. If you’re working under an umbrella, speak to your accountant about how often you’ll need to claim your expenses.
Although having an accountant will make the process a lot easier, it’s important to schedule a specific time to process all your receipts and forms. If you do this every week or every month, then you’re less likely to forget about them. However, if you leave them alone for too long, you’ll risk never being able to claim back these expenses. Then you’ll be worse off come the end of month or year.
As an IT contractor, making the most of your time is essential. You could find yourself extremely busy for months at a time. This would leave you little time for sorting through your finances. To ease this situation, make use of travel time by processing your receipts while you’re in a taxi, for instance. Or, you could make good use of your time while you’re waiting at your hotel. To make things even easier, some accountancy services provide online dedicated contractor services that allow you to manage your finances on the go, whenever you need to.
Don’t try to do this all on your own. Unless you’re experienced in account management, it’s best to get help when you need it, especially when you’re new to IT contracting.
Get in touch with IT contractor accountants who can help you out. They’ll be able to answer specific questions about your industry and sector, while assisting you with keeping an eye on what expenses you can claim for. That way, you’ll be able to spend more of your free time on doing what you want to do. And you’ll spend less time looking over paperwork in preparation for the end of the financial year.