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5 Accounting Tips To Know When Hiring Freelancers

04 January 2021 | 1 comments | Posted by Isha Madera in Temping

How to handle accounting when using remote and freelance workers

Hiring freelancers can benefit your business in many ways. First, freelancers come from a diverse pool of top-notch talents. They are equipped with experience and expertise for your short-term projects.

Second, they have flexible work schedules that allow them to work efficiently. While they do not usually work the standard 9–5 shift, they are sure to get the work done within deadlines.

Third, remote workers can deliver outcomes with minimal supervision. All they need are clear instructions and reasonable expectations to move forward with the job.

Fourth, they provide practical alternatives to hiring full-time employees. You don't need to worry about paying taxes, employee insurance, or medical benefits as freelancers only complete stints and they're off to complete another project.

Having freelancers onboard comes with challenges as well. Different time zones, language barriers, and miscommunication can hinder them from completing their jobs. What's more, you might not be able to see them upfront. You may even wonder if they do their jobs right when they don't update at all.

Accounting tips ideal for working with freelancers

The good news is, there are several tips, and tools managers can use for onboarding remote workers. These make accounting for projects, time, and payment seamless for both employer and freelance worker.

1. Get freelance accounting software

An important aspect that businesses need to determine after deciding to hire a freelancer is how much the office budget is allotted to pay for their services. Setting aside a specific amount allows the company to evaluate the cost-effectiveness of outsourcing and to make adjustments as necessary.

Aside from setting up a budget, the company also needs to account for the taxes they need to pay for freelancing services. A designated software for freelancers can help companies keep track of their expenses and related tax dues. This can even help companies issue invoices and receipts and perform other functions that can benefit the company and its remote workforce.

2. Properly scope out project and details

Freelancers work on a per-project basis. They are employed to perform specific tasks such as social media marketing, content writing, IT installation, and a whole lot more. Businesses can make the most out of this contractual relationship by ensuring that project details and expectations are well-defined and understood.

You need to explain the nature and scope of their work, how many hours you expect them to clock in, and the actual date when they need to turn in their project.

It would help if you also informed them who they need to answer to, the meetings they need to attend, and how often they need to provide updates. Doing so gives the freelancer a clear picture of their work and direct them to the proper channel in case they have concerns.

3. Have a time tracker

Freelancers work at their own pace and time, so you might be wondering how you can account for the hours worked by someone who is far across the globe. Time tracker tools can give you details about the tasks they do and how long they take to accomplish them.

It also gives you performance metrics that can track their productivity and the amount you need to pay them for their work.

4. Decide on payment schemes

Since freelancers work differently from regular office employees, they also need a different payment scheme to ensure that they get paid exact amounts and receive the payment on time.

This can come as a challenge, as businesses would need to consider several payment processing options to make sure money transfers reach their destinations halfway across the world.

It would help if you also considered the charges that may come with sending money overseas and find a suitable payment processor that can give amenable rates that will benefit both employer and freelancer.

5. Agree on a set of communication tools

Accounting for freelancers is not only confined to tracking their time and measuring their productivity, as this also includes establishing a professional working relationship with them.

You can account for freelancers by using various communication tools to offer them support or provide feedback.

Teleconferencing, video calls, chats, and phone calls are a means for the company to connect with remote workers. It is best to use these tools to ensure constant communication.

Conclusion

Hiring freelancers can be advantageous to your business in terms of cost, efficiency, and performance. Their temporary addition to your regular workforce infuses new talent and helps you achieve goals in so short a time.

Although outsourcing can pose challenges such as varying time zones and delayed responses, businesses can utilize accounting tools to monitor remote workers, track their progress, and communicate feedback.

What's more, using accounting tools for freelancers also duplicate as internal auditing tools. These make sending invoices and issuing payments a seamless experience for both the company and the freelance worker.

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Recommended reading

If you enjoyed this post and have time to spare why not check out these related posts and dive deeper down the rabbit hole that is remote work.

Tags: Accounting, Freelancer , Guest Post

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