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The Great-West Life Assurance Company, London Life Insurance Company and The Canada Life Assurance Company have become one company – The Canada Life Assurance Company. Discover the new Canada Life

The Great-West Life Assurance Company, London Life Insurance Company and The Canada Life Assurance Company have become one company – The Canada Life Assurance Company. Discover the new Canada Life

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Freedom 55 Financial is a division of The Canada Life Assurance Company and the information you requested can be found here.

Managing your finances when you’re self-employed

Key takeaways

  • Starting your own business or going freelance is exciting, but it also means it’s your responsibility to handle your own finances.
  • There are things you can do to as you’re starting out to set yourself up for long-term success in your new venture.
  • These could include developing consistent pricing, investing in the right systems or professional services, and making sure you’re on top of any financial or regulatory requirements.

Working as an independent professional, consultant, gig worker or freelancer is an attractive option for some people. It can offer a greater degree of independence, autonomy, flexibility, and work-life balance. 

It also means that you’re responsible for staying on top of your finances. From invoicing to taxes and paying any suppliers, it’s your job to make sure that these things get taken care of.

Here are a few key points to consider to make sure you’re managing the money side of your business as well as possible.

Getting paid

Many independent professionals struggle with charging what they are worth, collecting payment in a timely manner or meeting the obligations of being a small business owner. The stress from this part of work can be intense.

Here are some tips from those who have been there:

Develop consistent pricing and billing terms and conditions. If you provide a discount to a client, be clear about your rates and ensure they understand the discount is an exception and not a norm.

Get a deposit before you begin work on a project or consider invoicing throughout the project if there will be multiple steps or a long timeline.

Bill as soon as a project is completed and ensure you have the correct contact information prior to sending. 

Follow up immediately when payment is past due and consider including information on your initial invoice about late penalties.  

Invest in systems to support you

Make filing taxes easier such as bookkeeping services and accounting software.

Know how to register your business with the government, such as applying for tax numbers.

Don’t avoid or delay compliance with regulations or professional or reporting requirements, such as taxes and business licences.

Seek advice from professionals such as lawyers and accountants early on in your career and take advantage of free guidance from banking, accounting, and legal associations.

Manage your money

Begin saving money from day one, even if it’s just a small amount each week. Having some funds set aside can help create a safety net and help reduce anxiety and overwhelm. 

Know what you can write off and keep all receipts and your travel log in one place.  

Know and budget for what you want or will need, like: 

  • Personal development courses 
  • Technology 
  • Promotional items 
  • Advertising 
  • Office materials and supplies 

Don’t avoid or deny cash flow issues, no matter how much you dislike this part of your work. Force yourself to review your income and expenses monthly, and do regular cash forecasts.

What’s next?

The information provided is accurate to the best of our knowledge as of the date of publication, but rules and interpretations may change. This information is general in nature, and is intended for informational purposes only. For specific situations you should consult the appropriate legal, accounting or tax advisor.