Money Advice

Avoid Falling in to Debt When Self Employed

February 23, 2016 by Archie Archer in Money Advice, Saving Tips, Tips

avoid falling in to debt

Any self-employed person has to look at the bottom line and that means knowing whether there is more money coming in than there is going out. Avoiding falling into debt when working for yourself can mean the difference between being able to continue and having to go back to working for an employer. Whereas larger companies might have funds in reserve to weather the storms of a financial downturn or sticky patch, most self-employed people will find it much harder.


The precarious nature of not having a guaranteed income or salary is one of the reasons that self-employment isn’t for everyone. However, if you are willing to take the risks and roll with the hard times the rewards can really be worth it. Cash flow problems or unexpected bills can be very real problems for self-employed people and that is why it is essential for you to stay on top of your finances and know exactly what is going on at any given time.

Hands on approach

If you have a hands on approach to all areas of your finances you can avoid unexpected shocks in most cases and even have contingency plans to deal with them if they do occur. Proper invoicing and collecting funds owed is a key part of working for yourself, as is knowing your commitments and responsibilities to taxation authorities.

By adopting a proactive approach to business finances you can get an accurate picture of how things stand, and the good news is that you don’t necessarily have to do all the work yourself.

Creative solutions

Of the many creative solutions available to self employed people using specialist accountants for contractors is probably the single most effective. These companies know all about the potential pitfalls that working for yourself can hold and offer simple solutions to everything from invoicing, dealing with HMRC and even helping in the arrangement of loans or other types of funding. Sole traders and contractors of all kinds can find the help they need to manage their finances effectively and take away some of the pressure involved in the day to day business of working for yourself.


Although part of the reason for many people choosing to become self-employed is to cut down a reliance on third parties and do as much as possible for themselves. This can be a great cost-cutting approach, but at some point you are always going to need to call on the help of other processionals in different fields to your own.

When it comes to making sure that you do all you can to avoid falling into debt, it makes sense to use the services of accountancy professionals who know all about the world of the self employed worker and can give you the services you need when you need them.