Introduction to contractor management in a post-covid era
Businesses often rely upon contractors and freelancers for specialized skills. However, working with contractors is not as simple as it seems. Managing freelancers, independent contractors, and consultants can be tedious and complex, lowering your productivity.
Not just that, businesses face a unique set of challenges like poor contractor onboarding, tedious freelance management, lots of paperwork, manual tasks, erroneous invoices and tedious tax compliance processes.
That’s where automated contractor management comes into the picture. A contractor management platform empowers businesses with the agility and flexibility while managing their contractor workforce.
A robust freelance management system can manage all of the contractor management workflows, operational, financial, and legal aspects of working with freelancers while enhancing operational efficiency and minimizing risk and boosting productivity. It streamlines and simplifies every process — from onboarding and management to ensuring tax compliance.
That’s not all. A freelancer management system also offers a host of benefits in your day-to-day operations. Let’s look at some of them.
Easy and fast, automated onboarding
Traditional onboarding processes take hours or even days to complete. Manually managing paperwork, filling out forms, collecting W-9s and getting signed documents takes a lot of time and effort.
When things get too busy, important onboarding processes could slip through the cracks unnoticed as contractors usually have few touch points within your company. A contractor management system reduces lengthy onboarding processes that take days to finish to merely a few minutes, thanks to automation.
You can send out onboarding documents such as NDAs, contracts, and SOWs to your contractor over a freelancer management platform and have them digitally sign it and send it back to you on-the-go. All your contractor documents can be securely stored on these cloud-based platforms and can be accessed readily at a moment’s notice.
With your onboarding processes slashed from days to just minutes, you can get your contractors up to speed on projects without having to worry about too much paperwork or missed security & compliance steps.
End-to-end documentation management
Traditional contractor document management involves having all the paperwork physically saved in your file cabinet in a corner of the room. While there’s nothing wrong with managing your documents manually, we all can agree that it is not the best way to store a huge volume of data.
For instance, if someone else in your company requests a contractor document, you may need to manually dig through file after file looking for a single document. This can be painstaking and time-consuming.
A contractor management system makes it easy for you to store, manage and organize data easily. Other members of your team can easily view or retrieve contractor documents from one place without too many back and forth emails, requesting access.
With a contractor management system in place, you can get your work done from just about anywhere, without worrying about your documents getting misplaced or being buried under a pile of paperwork.
Moreover, your operations and HR teams can stay more productive as they do no longer need to chase contractors for signed copies. Contractor management platforms like Freelance Central come integrated with DocuSign so that contractors can digitally sign documents and return them over to you easily.
Issuing invoices to your contractors can often result in missed payments – not to mention, they are prone to human errors. If you have many contractors working for your business, you might need to process large volumes of invoices which can take lots of time and effort.
By managing invoices digitally over a freelancer management system, you can save more time and avoid missed payments. Many freelancer management systems allow you to generate detailed invoices, create customized templates with your company logo and even add payment terms.
Once generated, you can issue the invoice to your contractor pronto. Your contractors will receive prompt alerts if your invoice is sent or received. Moreover, by managing your invoices online, you will be able to better keep track of your expenses and historic payments without having to sift through paperwork.
e-Invoicing also results in much faster turnarounds. By cutting down the man-hours needed for processing, approving, and tracking invoices and errors, your core teams can skip repetitive tasks and spend more time focusing on growing your business.
Quick and easy payments
When you don’t have well-maintained internal processes, there is a chance that you could miss out on paying your freelancer on time. A contractor management system can solve this problem by streamlining workflows from invoicing, approval, scheduling, to payment and updates. Teams view payment status, past payments and hourly rates, allowing for better transparency and business cost optimization.
During onboarding, the contractor management platform collects tax forms and sets up the freelancer’s preferred payout methods. It then acts as a payment service provider and sends out payment. This process simplifies the payment process to a great degree, as your team no longer needs to worry about currency conversions or to choose the right payment mode. They need to click a button to make the payment.
You can also use a contractor management system to carry out secure payments over Stripe and PayPal. By allowing you to schedule payments, your finance teams can plan ahead and track spending accordingly.
Stay tax compliant for your contractor workforce
Employee misclassification lawsuits cost companies millions of dollars every year. Moreover, it also puts your businesses’ reputation on the line and attracts unwanted costs and penalties from the IRS.
Even seasoned accounting professionals sometimes break their heads over complex tax filing processes as taxation laws continue to evolve. A contractor management system allows you to mitigate tax non-compliance risks by standardizing and streamlining your 1099-NEC filing.
Instead of manually filing 1099-NEC with the state and federal agencies, you can e-file your tax returns easily over a freelancer management platform and maintain a continuously compliant contractor workforce.
You can also issue W9s and have your contractors furnish them and return them over to you easily. With a robust platform like Freelance Central, you can e-file 1099-NEC for all your contractors in one go and bulk import contractor details from apps like QuickBooks to make the filing process much faster.
Improve operational scalability and flexibility
Hiring the best freelancer talent alone is not going to help you scale your business. 55% of businesses that focused on streamlining roles, workflow operations and processes helped them scale at a faster rate than ever before.
In some cases, scaling your business means striking a balance between budgets and growth.
An end-to-end freelancer management system can help you greatly here. From automatically calculating your hourly rates to cutting down on operational costs and avoiding employee misclassification issues, an efficient contractor management system like Freelance Central ensures that you have enough room to scale and grow.
The pandemic has changed how businesses function for better or for worse. By implementing a freelancer management system, you can turn these disruptions into serious opportunities to take your business to new heights. Managing freelancers and independent contractors using automated processes, strategic planning, and robust tools are important in ensuring that nothing falls through the cracks.
If more than 10% of your workforce consists of freelancers, deploying a freelancer management system will help you keep track of your projects, centralize their information, ensure compliance, approve payments, and much more.
Long story short, small and medium businesses will turn to flexible talent more than ever before. In such a situation, companies who make the cut will be the ones who learn the ropes of managing their external teams efficiently with an automated, cloud-based platform.
What are your thoughts on contractor management?
Let us know in the comments section below.