Contractors urged to keep personal and business finances separate

Contractors are being reminded of the need to understand and manage their finances if they are to be successful.The expert from PCG, a membership organisation for contractors, notes that the constantly changing landscape of the contracting industry means a tight rein on money is required. The article talks about the ‘feast and famine’ nature of contracting, highlighting that contractors and freelancers need to have a snapshot of their financial situation at all times so they can “cut their cloth” accordingly.The PCG piece advises freelancers to save for a rainy day and not to dip into their business profits for personal expenses. The author urges, “While it may be tempting to dip into the money for a new TV or for supplies to redecorate the house, it is important to keep your personal and professional finances separate. Setting up different accounts is paramount as this will make sure you aren't tempted by your savings.”Contractors are offered the following practical guidance, “While you are busy it can be difficult to keep track of your finances on the regular basis, but you need to set aside some time every now and then, preferably every week, to understand your finances and spot any problem periods, which you may need to plan ahead for. ”

http://www.50percenttax.co.uk/index/2012/10/11/contractors-urged-to-keep-personal-and-business-finances-sep.html