The freelancing career brings along several benefits, which include flexible work hours, location flexibility, compensation and earning control, and the freedom of being your boss.
Considering these perks, freelancing has become a popular career choice amongst individuals. Almost one-third of people across the globe are now pursuing it as their primary career path. Research conducted by ADP and Pew Research Centre found that
- 70% of freelancers chose to join freelancing as their career path by choice and,
- 56% admit that their primary income source is their freelancing career.
Organizations have actively started hiring freelancers since a significant pool of talented workers are switching to freelancing as a full-time career. As of March 2019, Google worked with over 120,000 freelancers/contractors. This is higher than the total number of employees on Google’s payroll.
However, when paying freelancers abroad, it is important to set up internal processes to manage talent effectively. A major part of freelancer management is payments. Working with multiple freelancers across the globe, keeping track of each invoice, mode of payment, and currency gets very challenging. Since payments are the key to holding an excellent professional relationship with freelancers, they must always be on time and accurate.
Working with a freelancer payroll solution can tackle most of the challenges effectively. However, an employer needs to carefully understand the challenges they may face while paying international freelancers.
Challenges Faced While Processing Freelancer Payments
Managing and processing freelancer payments internally is not only heavy on time and effort, but it also brings along a set of challenges, including
Managing Multiple Freelancers
It is true that once onboarded, freelancers do not need as much attention as your full-time employees do. However, there are some aspects that you must keep an eye on. These include timely delivery of the project, the number of hours the freelancer worked, and the number of leaves they took while working with you. These are some important factors that determine the final amount you must pay to them for their services, and keeping track of all these for multiple freelancers can be challenging.
Delay in Payments
In a survey conducted by Bonsai, 29% of the freelancers were paid a day late, and 75% of the late invoices were paid after fourteen days. Payments can be delayed due to several uncontrollable reasons. Moreover, keeping track of multiple invoices, each with a different payment mode and each of a different amount, does increase room for error. However, having clear visibility of the status and amount can help you avoid delays and maintain accuracy.
Multiple Currency Payments
According to the research conducted by Inavero Report, 48% of businesses hire freelancers globally. Hiring globally enables employers to tap into the world’s greatest talents, but it also brings along multiple currency payments. Making payments in numerous currencies can get challenging and also very expensive.
Multiple Modes of Payment
Different freelancers prefer different modes of payment. The most common modes of payment include wire transfers, bank transfers, digital payments, check deposits, or card reimbursement. Some of these payments incur a transaction fee, which can get very expensive, especially while processing international payments.
Multiple Payout Dates
Each freelancer opts for a different payment frequency. It may be weekly, bi-weekly, or monthly. It may also be divided into percentages that will be released as each project stage is closed. This means that the employer must keep track of when each payment must be made, and they need to do the same for multiple freelancers. Keeping track of these dates manually can get challenging, and more often than not, it might result in delays.
The challenges mentioned above can be dealt with effectively and efficiently by working with a Freelancer Payroll Solution. However, employers must first understand what a freelancer payroll solution does.
What does a Freelancer Payroll Solution do?
A Freelancer Payroll Solution helps you in paying overseas freelancers and also domestic freelancers. The platform ensures that the correct amounts are dispersed on customized dates for each freelancer in your team. It also ensures that you effectively comply with local labor laws and tax deductions.
There are three critical functions of a Freelancer Payroll Service:
End-to-End Freelancer Management
These payroll solutions take charge as soon as you want to onboard a new freelancer. They ensure that your contract includes all necessary information like project start and completion dates, compensation, mode of payment, frequency of payment, and currency. Having all the key details about the freelancer on one platform ensures that the employer is constantly updated on each freelancer in their team.
Timely payment disbursement
The platform ensures that the freelancers’ payments are disbursed compliantly at a pre-determined payroll cycle, payment mode, and amount. They also ensure necessary deductions based on the local income tax regulations are taken care of.
Leave Management and Time Tracking
A freelancer payroll solution helps you understand the number of hours/days each freelancer is putting in. It also tracks their time-off/leaves, just like you would do for a full-time employee.
A payroll solution automates the entire process of calculating and dispersing your freelancers’ payments. Partnering with a freelancer payroll solution is one of the easiest ways of working with freelancers while the complex processes are being taken care of at the back-end.
Why you need a Freelancer Payroll Service
A Freelancer Payroll Solution can resolve most of the challenges you face while paying freelancers abroad. The service will automate the entire process, and you can focus more on hiring the right candidates.
A Freelancer Payroll Service ensures that you stay clear of all compliance and taxation risks which can be very expensive in case of an administrative error.
Here’s how a Freelancer Payroll Service can benefit your business:
One-Stop Platform from Onboarding to Offboarding
A freelancer payroll service will automate the entire process of onboarding, generating employment contracts, payments, and offboarding. You can customize the payroll frequency, employment terms, and compensation according to your requirements.
Clear Visibility in Payments
You can easily access all the information on your freelancers on one single dashboard. You can choose different payment cycles for each freelancer, be it monthly, weekly, bi-weekly, or hourly. Having visibility of the payment status, cycle and amount will ensure that the process is streamlined and error-free.
Use one currency for all Payments
With a payroll solution, you can freely hire freelancers across the globe without having to pay them in different currencies. A freelancer payroll solution will simply charge you a single amount for all your freelancer payments in one single currency. It will then ensure that all the freelancers get their respective payments in their local currencies.
Stay compliant with Local Labor Laws
Different countries have different labor laws and tax deductions. A freelancer payroll solution ensures you stay compliant with all these laws and makes the necessary deductions on your behalf.
How to choose a Freelancer Payroll Service?
Once you’ve decided that a Freelancer Payroll Service is the way to go to expand your business, you must consider the following before choosing a service:
- Evaluate your business requirements and budget
- Check if the platform gives you an option of adding benefits such as insurance
- Carefully evaluate the industry experience of each service
- Check for feedback and reviews within your industry
- Ensure that all local laws and compliances will be taken care of
Different freelancer payment solutions will offer you various features, weigh out the pros and cons of each platform and choose a partner that fits your needs.
Process Freelancer Payments with Multiplier
Processing freelancer payments can be complex, especially when working with international freelancers.
Partnering with Multiplier will give you end-to-end support from onboarding to offboarding.
With our intuitive & easy-to-use dashboard, you can pay your freelancers and independent contractors securely, on time, and in just one click, and have 100% visibility of the payment status.
You can pay Multiplier in a single currency, and we will pay your freelancers in their respective local currencies.
Our platform offers streamlined invoice management while you have flexibility, ease in raising invoices, and enhanced visibility of payment statuses.
Our SaaS platform removes the hassle of managing the invoices, remembering the payout dates, and initiating the individual payments to the freelancers/contractors.
You can now talk to our experts to learn more.