It is now more important than ever to have an efficient payment method in place for your freelance talents. More than one in three people are now freelancing, and that number is expected to rise to more than half of the working population by 2020. As a result, the need to improve the invoicing and payment processes for freelancers is an important priority for any business.
Streamlining your payment process is important for several reasons.
We’ll discuss why you need a good payment process in the first place. When working with freelancers, you know that things often don’t go as planned when it comes to receiving invoices, attaching them to tasks, and accurately recording progress and payment amounts due from clients. From the freelancer’s perspective, there is the responsibility to raise timesheets for each project, attach them to a particular task, and accurately record their progress and payment amounts due to clients. It takes time to communicate back and forth between you and your manager. Then think about the effort involved for your manager to complete the task. They will need to compare rates, verify the time worked, and ensure that the right tasks have been completed to their satisfaction. If they notice any inconsistencies, they’ll need to get back in contact with the freelancer and request that they fix the issue. It’s a time-consuming and awkward conversation. After making the changes, they will need to either approve or reject the worksheet. But it doesn’t end there — once approved by the finance department, they’ll have to mail the invoice, make the associated data entries into your accounting software, perform audits, and so forth.
A freelancer payment portal is a platform where freelance workers can pay their clients
A good way of streamlining the payments process is to set up an online freelancer payment portal. Inputs. If you’re working with a small number of external workers, bank-to-bank transfers might be fine. But as your freelance database grows larger, they become less feasible. Not only does it take up more time and effort than just paying them directly, it may also become quite complicated when you consider the possibility that some of your freelancers may be based in other parts of the world. It eliminates many of the hassle-intensive aspects of traditional payments, making the freelancing payment process much smoother over time.
How do freelancer payment portals work?
The basic concept of most freelance platforms is that they function as intermediaries between you and your freelancers. You send the amount requested by your freelancer via the portal, you get a link or an email, you pay for it using your credit or debit card, and you don’t need to enter your freelancer’s bank details each time. Once the portal receives the payment, it transfers the funds to the bank account associated with your freelancer’ email ID or other details provided by you. If your freelancer works from another country, the portal converts the payment into their local currency.
There are several key factors that you may want to consider when choosing a freelance portal.
Some payment portals require both you and your freelancer to have an account with them in order to be able to transfer and receive funds. Others may allow you to pay via a link, without having to create an account.
Being present in different parts of the world. Some freelance portals aren’t available in every country, so you might want to double-check if you’re working with freelancers from different countries. If the portal doesn’t have a presence in a particular freelancer’s country, you might not be able to pay him in his local currency.
- Fees for processing transactions. Depending on which portal system you use, you may pay a certain percentage of the total transfer amount as transaction fees. A 2-3% transaction fee may not sound like much, but it can add up if you are sending hundreds of pounds every month. Inputs Sometimes, your freelancer is paid a percentage of the amount received by the client.
- Some payment gateways have limits on the amount you can transfer at once, or impose a monthly cap on transactions, but most don’t. If you’re going to pay your freelancers easily, then you might want to avoid working with them frequently and on high-value jobs.
- Time to process. It differs from country to country and from portal to portal. With some options, you can transfer money to virtually any part of the world within minutes, while others may take up to seven to ten days to process the payment request. If you take too long to process payments, you might not be able to pay your freelancers on time.
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