Contractor onboarding checklist for a resilient cash flow

Switching to contracting requires more than a rate sheet—it demands systems for invoices, benefits, taxes, and contingencies. This article provides a checklist to ensure your onboarding covers pay terms, legal protections, cash reserves, and automation so you avoid scrambling when the first payment is late.

Clarify pay terms before you start

List the project scope, deliverables, timeline, and payment milestones. Confirm:

• Hourly rate or project fee.
• Payment schedule (net 15/30, upfront deposit, milestones).
• Preferred payment method (wire, ACH, platform).
• Late payment penalties or triggers for interest.

Capture this in a contract template stored in your command center. Having the terms documented avoids confusion later and gives you a standard to reference when invoices are unpaid.

Automate billing and follow-ups

Set up invoice templates with clear line items. Use software (Wave, QuickBooks) to:

• Send polished invoices with due dates.
• Automate reminders (3 days before, on the day, after).
• Keep a log of sent invoices, payment status, and any follow-up actions.

Link the invoice log to your weekly automation review to ensure no client slips through the cracks. Pair reminders with a micro gratitude ritual to keep the tone positive when nudging clients.

Manage taxes and benefits

Contractors are responsible for self-employment tax, health insurance, and retirement contributions. Onboarding should include:

• Setting up a tax savings bucket (25–30% of income).
• Choosing health coverage (marketplace, spouse plan, or high-deductible plan paired with an HSA).
• Selecting a retirement vehicle (SEP IRA, Solo 401(k)) and scheduling contributions.

Record the plans in your command center with deadlines. Add a quarterly reminder to revisit the contributions and adjust the rate.

Plan for irregular income

Contract payments may fluctuate. Build:

• A buffer equal to 2–3 months of essentials stored in your banking matrix.
• A smoothing fund that collects excess from high months to cover leaner ones.
• A cash flow model to estimate how long your savings last if a client delays payment.

Use the irregular income tracking article’s techniques to log deposits and maintain the runway.

Keep legal protections tidy

Before signing, ensure you have:

• Intellectual property clauses, NDAs, or confidentiality agreements understood.
• Clear termination terms (how to end early, notice).
• Insurance (professional liability, general liability) if needed.

Document certificates of insurance or contract copies in your command center for easy reference.

Check-in with your habits

Review your onboarding checklist weekly for the first month after starting:

• Did the first invoice go out on time?
• Are automations triggering?
• Is the buffer still intact?
• Is your mindset aligned (use the money mantras)?

Log the answers in your journal and share progress with an accountability partner.

Closing reflection

Contractor onboarding sets the tone for your entire run. Cover pay, automation, taxes, cash flow, and legal basics so you stay resilient. Keep the checklist visible, update it each time, and let the systems you build free your energy for the work you love.