8 Signs You Need a Freelancer Management System
Learn how switching to a Freelancer Management System will save you time and money — you’ll minimize errors and reduce task hours.
How do you know if you need to upgrade to a cloud-based Freelance Management System (FMS) – what are the signs that it’s time for your company to make the switch from manually processing or juggling multiple systems to an FMS? With freelancing on the rise, organizations must systematize and streamline the complex onboarding, collaboration, and payment systems.
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Upgrading to a Freelance Management System (FMS)
If you are experiencing any of the 8 scenarios below, your business will benefit from upgrading to an FMS.
1. Your finance/accounting team is spending hours each month paying freelancers.
With manual processes, each time you add a freelancer to your team, you are also adding workload for your finance/accounting team. Each freelancer represents additional time for your accounts payable process – checking and validating invoices, securing payment approval, updating your accounting system, issuing payments, etc. By switching from manual methods or homegrown solutions to an FMS to manage and pay your freelancers, you’ll see an immediate and noticeable increase in efficiency and tangible time savings. Moreover, every team that interacts with freelancers — from creative, marketing and editorial to legal, operations, and HR — will save significant time. Jenny Gao of Fly by Jing made the switch and now saves herself dozens of hours each month.
2. You are onboarding and managing multiple freelancers every month.
As your liquid workforce expands, not only does time required to manage the associated financial processes (invoice management, payments, and financial reporting) grow, but risks can also increase. With manual processes, the risk of errors and compliance issues increases as you add to your freelance and contractor team. By the time your company has engaged 10 freelancers per month, manual processes are unwieldy with high risks of error.
Download Liquid’s Independent Contractor Agreement Checklist as a handy reference guide.
3. You are juggling multiple systems/tools to manage freelancers.
On average, Liquid clients juggled 7 different systems to manage their freelancers before switching to Liquid. Using multiple systems takes more time for your team every month and increases the probability of errors or information that gets lost or is out of sync. An FMS will help you onboard, manage, and pay your freelancers efficiently with automated workflows – plus enforce compliance rules to ensure compliance with federal, state, and local regulations.
4. You are building a pool of qualified freelancers – with the right competencies for your company.
Building out an on-demand workforce allows your company to be more nimble and agile in response to opportunities. To grow and manage this liquid talent pool, you need a system that will help you easily and quickly start new projects – while making sure you have all the necessary contracts and documentation. For example, with Liquid, you can quickly review your talent database and identify the right freelancer for each project. You can create new SOWs in minutes and start new projects as soon as that same day.
5. Your finance/accounting team is overwhelmed with manually processing 1099s each January.
Does your finance / accounting team dread dealing with manually generating 1099 forms? For every freelancer or contractor that you paid $600 or more during the tax year, you will need to file a 1099-MISC. Creating 1099s can quickly become a time-consuming burden for your team in January, taking time away from other essential tasks. An FMS like Liquid will help you automate this process, enabling you to easily and quickly download 1099 data and W9 data.
6. You’re not sure if you’ve overpaid your vendors, or you think your vendors have double invoiced you.
When managing invoices and payments manually and via spreadsheets, it’s easy for errors to occur and hard to have accurate financial reporting. An FMS offers cloud storage and an automated filing system so you can access SOWs, contracts, and other documents at a moment’s notice. Automated reporting makes keeping track of invoices quick and straightforward – you can track the status of every invoice on your dashboard. Plus, Liquid automatically flags invoices that don’t match an active SOW.
7. You’re still collecting W9 forms in person.
Your freelancers and contractors work remotely, which means that electronically completing and capturing forms is essential. Plus, automated electronic data collection ensures that the W9 forms you need are securely stored and readily accessible when required to generate W9s and meet IRS requirements. Liquid’s onboarding process automates the completion of W9 forms for you. The process also encourages vendors to use an EIN (versus a social security number), which strengthens the argument that your vendor is a separate business for compliance with AB5 B2B requirements.
8. You struggle to forecast your vendor and freelancer spend each month.
A good FMS brings a company-wide view to your freelancer and vendor engagements, so you can see how much you are spending on different types of freelancers and in which departments. Without full visibility on contractor activity, it is impossible to project your expenses and cash flow accurately. With Liquid, you can quickly see both your total and contracted spend.
Upgrade to an FMS to Save Money and Time
Finli’s Founder and CEO, Lori Shao, switched to using Liquid so that she could easily manage contracts, projects, and payments – reducing her administrative burden while tapping into the liquid workforce to grow the business. Finli now saves money and hours every month, and Shao says that she can’t imagine a better experience for managing her freelance workforce.
A good FMS will streamline the inefficiencies inherent in manual processes, increase the accuracy of financials, reduce the risk of compromising confidential information, reduce compliance risk for freelancer requirements from US, state, and local laws and regulations, and accelerate engagements with contractors.
If you are working with 1099 independent contractors and/or vendors, you need a Freelance Management System? Try Liquid today.
Note, we are not providing legal, tax or payroll advice. Please consult your legal, tax and payroll professionals. These are simply to serve as guidelines based on our own experiences.
Category: Freelancer Management Finance and Accounting
Updated: March 24, 2020
Quick note: This is not to be taken as tax advice or legal advice or payroll advice. Since tax rules and laws change over time and can vary by location and industry, consult a CPA / tax advisor and/or attorney for specific guidance.