Being a Contractor..

So I'm quite a bit into my first contracting gig and I'm ready to give an update. 

Mo' Money.. Mo' Problems..

While there is definitely more money in the contracting world it's definitely not all parties and play time.  The first problem you may run into is the wonderful accounting term known as "NET 30" aka "You ain' t getting paid for awhile".  The basic premise is simple enough.  You work a month.. and then you send in an invoice which your employer has 30 days to pay.  So if you think about it from the starting point your first pay cheque won't arrive for two months. 

One thing to consider is that if you are sub contracting out you may be able to get some assistance getting over that first hump but you'll definitely need to discuss this in advance.  Another option is to find a wealthy family member for a short term loan.  Just try not to forget the government is going to want it's share of that first cheque as well so you don't want to spend it all (or make up the difference later). 

Paperwork..

So you've gotten through your first 60 days and have that first big payment in hand.  Now is where the real fun starts.. spending the money!! er wait.. no that comes after paperwork.  You are keeping track of income and expenses for your company right?  You are working as an incorporated entity right?  And you are setup to collect and pay GST since you'll be breaking the $30K barrier? 

But before you start getting worried let me quickly say that with a good accountant and a little help from some accounting software (Simply Accounting here) this is actually not that bad.  But it is something to deal with earlier rather then later.  That way everything is fresh in your mind and you're not trying to remember what the heck you spent $ at such and such on..

So those are the two biggest pains I've had to deal with.. next post will go over the GOOD things (besides the obvious) that I find in being a contractor.