Freelancers often need to fight for their income. They struggle with long turnarounds — 30 to 60 days — negligent clients, and expensive payment processes, all of which can sour positive relationships with organizations.
By streamlining the arduous payment process, you will inevitably retain the freelancers you work with. Here are five tips for paying contractors that will lead to easy, secure payments for your 1099 workforce:
1. Collect Accurate Information
After you hire a freelancer, you need to collect all the relevant information in order to pay them quickly. Ideally you should have them fill out a W-9 form or provide the same information. Here are the need-to-know details for each independent contractor:
- Legal Name
- Business Entity
- Bank Account Information
Not only are these identifying details essential to completing payments, they make it easy to comply with tax requirements. Payable streamlines onboarding — for you and your independent contractors — by collecting all this information as part of the onboarding flow. Payable also verifies bank account information, saving you the hassle. Instead of stumbling through manual processes, automate your onboarding system.
2. Make Fast, Secure Payments
Traditional invoicing and payment processes leave the 1099 workforce with financial insecurity and frustrations with their clients. Freelancers never know when payments are going to arrive and have to follow-up with clients to ensure regular payments. With Payable, companies pay freelancers without the grunt work, skipping a challenging process for both parties.
As soon as freelancers submit their hours or projects through Payable, the automated system sends an invoice to clients with the option of a mobile payment. Clients verify payments with a click, and contractors receive money straight into their checking accounts with ACH transfers in 2-5 days. By making payment simple and straightforward, Payable supports the financial viability of the growing freelance workforce.
3. Embrace Payment Transparency
With inconsistency in payment practices, it’s difficult for even the most successful freelancers to ensure that they receive a regular salary. Payable helps keep 1099 workers afloat with clear information about when payments will appear in their bank accounts. Automated emails notify freelancers when payments are on their way. This way, freelancer’s can leverage awareness about their own security, planning ahead based on their financial outlook.
4. Responsive Customer Service
Large on-demand companies can struggle with an influx of questions about contractor payments, overloading their service teams, particularly at the end of each quarter. Training your staff to give consistent and knowledgeable responses to contractors ensures that your freelancers receive the answers they deserve. Empower your customer service team with tools that build internal transparency about payment processes, and develop a clear protocol for dealing with contractor payment issues.
5. Built-In Tax and Compliance
For every contractor that you pay over $600, you owe them a 1099 form. Gathering the year’s invoices and tracking each outward payment makes a quagmire for your accounting team. Instead, enlist Payable to help with these tasks. It tracks every invoice and payment, automating your tax and compliance process. As you expand your freelance workforce, it’s even more valuable for you to put an efficient 1099 payment system in place.
Paying contractors in a marketplace with ease, consistency, and optimal service ensures that you build strong relationships with outside contributors. Start now, and you’ll see a positive benefit in your ongoing collaborations with independent contractors.