On your journey to becoming an independent contractor, you’ll quickly learn that there’s a lot of planning involved. Initially, this planning will focus on choosing the services you will offer, finding and securing clients, and deciding where you will conduct your business.
While these are all vital steps, they tend to fit into the category of front office responsibilities. Lurking in the background are back office tasks, which are equally critical to the success of your business.
What does back office management mean?
Back office management of your business encompasses all of the administrative and support tasks that must be done to effectively run your business. Without an organized and well-managed back office, your business may suffer. Back office tasks consist of everything from managing records, filing paperwork, and keeping track of expenses to billing your clients and filing taxes.
While a large company likely has a team of employees who handle these tasks, independent contractors must rely on themselves to fulfill these roles. This means that in addition to running your business, you will have to invoice and collect payment from your clients, prepare contracts, manage and pay taxes, organize benefits and insurance, and ensure your business remains complainant with all federal, state, and local laws.
What is the best way to manage my back office?
As an independent professional, your income depends on conducting billable work. Spending your time on back-office management takes away from the time you can dedicate to that work. So, what are your options? There are several, and your choice will depend on your business needs, personal preferences, and work style. Here are a few options to consider:
1. Hire Help
You can hire administrative and support personnel. For example, you might hire an administrative assistant who can handle invoicing, recordkeeping, paying bills, and maintaining tax records. Depending on your needs, this could be a traditional W-2 employee, a freelance virtual assistant, or a temporary worker. While this may seem like an easy solution, remember that hiring help means additional oversight, training, and management on your part. And finding the right person to take on these tasks can be a challenge.
2. Do It Yourself
You can always opt to manage back-office tasks on your own using online tools to track expenses, generate invoices, and bill clients. However, if you are not familiar with these programs, you’ll need to dedicate time to learning how to use them correctly. Once you are familiar with them, you will need to dedicate time to data entry and maintenance as well.
3. Call in the Pros
Another option is to work with a company like MBO who understands the needs of independents and can provide the services you need without breaking the bank. As an MBO Advantage member, you’ll receive assistance with taxes, payroll, vendor qualification, building a web presence, and more. Maximize your earning potential by focusing your attention on work for your clients rather than routine business maintenance.
Other back office considerations
No matter which option you choose, you’ll still need to factor in insurance. If you need guidance, an insurance broker can help you find health and business insurances—luckily, there are many health insurance options out there for independents. Check with your homeowner or auto insurance carrier, as they may be able to offer you a discount for an additional policy type. Planning for retirement is another future insurance you should consider, so be sure to take a look at those options as well. Working with a firm like MBO, you can opt into health insurance plans and 401k plans for a reasonable cost.
If you are like many independent contractors, you started your own business to do the work you love, not to become an expert in accounting, human resources, or contractor compliance law. Ignoring back-office management tasks will not make them go away. Finding the best way to manage these responsibilities is one of the smartest moves you can make as a business owner.
Want to learn more about how MBO can help ease the burden of your back-office tasks? Take a look at the details of what Advantage has to offer, contact us today.
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