The World Bank estimates that 46.4% of the global workforce are freelancers. As more companies turn to flexible staffing solutions to meet their operational needs, it’s important for Finance departments to keep track of and pay workers that don’t fit into the standard employee classification.
Engaging freelancers is great for business, allowing teams to find skilled labor faster, hire in more places, and deliver results to clients and customers at scale. However, Finance departments are left with the daunting responsibility to pay freelancers, report on spend, and maintain compliance in an ever-changing global gig economy.
As the freelance economy grows, so does the complexity of financial controls and reporting needs. Freelancers have traditionally been a part of the financial reporting world. However, they’re now being recognized as a growing force in the payroll and tax accounting arenas as well.
An increasing number of freelancers are not just working outside the traditional office setting, but also operating within a complex web of business relationships that require communicating their financial information clearly and efficiently — to both internal and external stakeholders.
In fact, the freelance workforce has exploded in recent years: according to a study by Edelman Intelligence, a division of Edelman marketing research firm, the number of people who work independently of an organization grew by 20 percent year-over-year from 2013 to 2014. That’s an additional 14 million people working outside of traditional employment relationships.
This guide gives Finance teams critical and foundational knowledge to adapt to an ever-growing contingent workforce model. The following sections will make reference to Worksuite’s Freelancer Management System (FMS) to seamlessly manage and pay your external talent.
Invoice Management allows freelancers or teammates to create invoices for payment. Having a consistent invoice management process is important because there are financial codes that are required to perform financial reporting, to track spend, and analyze costs across departments and cost centers.
With Worksuite, both managers and contractors may generate an invoice directly from a task, which enables tighter accounting and eliminates administrative burden.
You can use a project management tool to track costs — making sure that all linked tasks are coordinated to provide outcomes on schedule and under budget. To achieve this, while starting a new project in Worksuite, include the project start and finish dates as well as your overall budget. Costs for any related tasks will be automatically added to your overall budget. Tasks will also only be created throughout the designated project timeline!
What’s more, you may view a quick “gut check” to see how each project is tracking toward its allocated budget, by simply hovering over that column in Worksuite or looking at the top of the project dashboard.
Invoice Management starts not with the invoice but with the Work agreed to be performed. Long before an invoice is raised, a manager decides what work needs to be completed and coordinates with the contract on the deliverables, payment, and timeline.
Freelancer visibility into the work that needs completing is critical, since they can more easily track pending work and communicate with you on deliverables. Using Worksuite’s Tasks and Projects module allows for the simple creation of a structured work management tool for projects to easily come together across various freelancers — all contributing to the project.
Most importantly, tracking financial codes is required for teams to measure spend.
In accordance with best Accounting practices, invoices in Worksuite are first approved and then scheduled for a pay run. Most organizations opt to divide these tasks across different team members.
With Timesheets, you can see when your employees worked and how much time they spent on each task. This information helps you make better decisions about hiring new staff, adjusting work schedules, or budgeting for next quarter/year. It also lets you bill clients accurately for services rendered.
There are many ways you can track time, whether it’s:
It’s also important to remind contractors to submit their timesheets so that you maintain your financial process flow without disruptions.
After a timesheet is submitted for review, a manager approves it, and they may automatically generate an accurate invoice based on those hours logged.
As a manager, you will probably set up different rules for how your organization handles timesheets. For example:
Worksuite is the leading platform for managing freelancer payments in 120 currencies and 190 countries. The Worksuite team has built one of the most efficient digital payment systems in the world. That said, delivering payments globally is no easy task. Worksuite has invested heavily into ensuring global payment processing is as smooth as possible – for both your team and your talent. We’ve done the heavy lifting so you don’t have to.
Freelancer payouts require a simple yet robust process for getting payments out the door and into the bank accounts of your top talent. If you experience delays on payments, and a freelancer doesn’t get their money on time, your brand reputation and confidence in the eyes of your talent are at risk.
The biggest problem is how to effectively land funds without doing all the necessary paperwork or back-and-forth to collect bank details. Not to mention, there are security and compliance risks to paying global contractors. Worksuite takes care of it all — removing the administrative burden and compliance risk from your team’s plate. All you do is approve invoices and schedule when the payments go out, and we take care of the rest. Then, your freelancers gain visibility into the status of their invoices at each point in the lifecycle.
Successful payment delivery begins with accurate bank account data collection. Our robust bank details collection workflow leverages real-time validation on a country specific level.
What’s more, Worksuite’s payment support team remains available to address inquiries from your talent partners to ensure we collect payable details before any payments are sent. Once completed, Worksuite stores this sensitive data using bank-level encryption and ISO 27001 certified data management. Simply put, we take information security very seriously.
Your Finance team may choose which currencies your freelancers invoice in or contract in, and the currency you fund in.
Freelancers can choose the currency they’d like to receive their payments in — with over 120 global currencies supported by Worksuite Global Pay.
Worksuite handles the FX trades and conversions to ensure your freelancers are efficiently paid the right amount at the right time. This process leverages real-time bidding across 20+ liquidity partners & FX providers, to get you the best rate possible.
For your talent, this means the ability to receive a payout in nearly any bank account and any currency they want, and your Finance or Accounting team has nothing extra to do to allow this to happen. For example, there is no accounting for FX gain/loss as you’d fund in a single currency of your choice.
For each set of payments we process to your freelancers, we receive your funding in a dedicated Payment Processing Funding Account (PPFA).
Upon KYC review and approval, we will establish your PPFA with a unique and static set of wire details.
Worksuite offers various options to fund this account to suit your Finance or Accounts Payable preferences.
After each pay run, Worksuite emails your Finance team a pay run funding notification. When contracting with your freelancers in multiple currencies, this takes the form of a comprehensive ‘trade reconciliation report’ detailing our conversions from the receiving currencies to your funding currency — balancing out to your ‘pay run funding statement’.
Worksuite automatically debits your account for the funding total for each pay run.
Benefits of Pull Funding:
Do you have lots of red tape and time required to get a wire scheduled or payments approved? Worksuite has you covered.
With PRFA, Worksuite funds your pay run upfront and invoices your for funding amount and processing fees together, on terms of your choosing:
Benefits of PRFA:
Unique and static wire details allow you to manually transfer funding:
As part of Worksuite Global Pay, our payment support specialists field all inquiries from your talent as well as banks. There are many types of support that freelancers may request — we take these off your administrative plate.
Worksuite is here to help you manage the complexities of paying taxes in multiple countries and jurisdictions.
We built our own payment processing platform to handle all of these issues, so you can focus on doing what you do best: creating great work.
Collecting Tax Information and Documents (for example, W9 / W8 / W8-BEN) in the platform through an automated onboarding workflow is simple and quick. As part of Worksuite’s Global Pay service, we offer to file 1099s on your company’s behalf. We also offer comprehensive Australian Superannuation services.
To date, Worksuite Global Pay has filed tens of thousands of 1099s on behalf of our customers. Plus, we’ve processed over $500 million in contractor payments to date (as of May 2023).
Managing taxes globally is no easy feat, which is why we also offer Worksuite Global Engage to protect you from local compliance regulations that you may not be familiar with.
When you’re getting paid for a project, there are some fees and taxes that may be applied to your invoice. These can vary based on the industry you work in and sometimes even the type of work you do, so it’s important to know what they are and how they affect your payments (and your bottom line).
We have a range of services to mitigate risk, from Global Engage to partnering with AOR or EOR service providers in a seamless, all-in-one process.
There is no “one size fits all” approach to international compliance. Therefore, Worksuite offers 4 custom tailored tiers to ensure you’re engaging global talent the right way:
Finance teams can gain deep insight into Workforce Analytics (WFA) to report on any data point within the Worksuite platform. For example:
With Worksuite, you can configure your projects, tasks, and invoices to include finance codes (GL, project, budget, etc.) to link expenses back to your own Revenue & AR reports.
Track freelancer spend more effectively by seeing top-level charts and graphs for your executives. Not only can you identify projects that are over-budget, but you can also drill down into spend by manager, department, or other financial reporting metrics.
See your month-over-month freelancer spend data to see how your spend is performing in relation to your revenue. Make sure you’re getting the most out of every dollar by using Worksuite’s Workforce Analytics.
Accrual is the most accurate way of tracking spend, but it can be difficult to manage. It requires detailed reporting and analysis to ensure that budget allocations are allocated in a consistent manner.
Accrual tracking is used by companies of all sizes. It’s ideal for organizations with multiple departments, multiple budgets and complex resource allocation structures. Accrual helps organizations keep track of how much they have spent and what their budget obligations are over time.
Accrual tracking allows you to see exactly where your money is going by comparing your actual expenses with your budgeted amounts. This way, you can see if you’re overspending on certain items or if there are areas where you can cut back on spending without hurting overall productivity.
Accrual tracking also allows for greater visibility into project costs, which makes it easier for managers to manage their budgets more effectively.
In addition to helping track spending, accrual also helps reduce costs by eliminating wasteful spending on projects that don’t meet their goals or deadlines. The system also provides a way for managers to compare different department budgets so they can make informed decisions about how to allocate resources across departments or projects based on the needs of each organization.
Forecasting spend is important to maintain proper cash flow. Stay in the know by leveraging simple data such as Task End Date and Task Fee to see how much you’re forecasted to spend over the next 3 months.
The Spend Forecast is a great tool for looking ahead on your projects, but it can also help you stay on top of your budget by monitoring current spending. The view will automatically update with any changes made during the month, so you can easily see if your tasks are coming in under budget or over budget.
Below are some of the most common ways Worksuite users leverage this:
In order to get the most out of Worksuite, we’ve made it easy to integrate with your existing finance systems. In addition to the old-fashioned way of integrating your finance data, we are now offering you more control over how your data is synced automatically. Whether you’re looking to create an automated trail of financial records or just want to import important data like invoice details and payment amounts, we have you covered.
Configure payment activity to trigger specific actions. Set custom alerts, auto-update accounting records, and much more.
Connect and import valuable processing data like invoice details, payment amounts, status information, and contractor details.
Explore synchronization possibilities between Worksuite and virtually any finance tool. Create an automated trail of valuable data for record keeping and budget tracking.
Worksuite integrates with most major finance tools like QuickBooks, Xero, and more so that you can easily import valuable processing data like invoice details, payment amounts and status information into Worksuite. Plus, we’ll connect our systems together so that when one system updates, the other will follow suit automatically.
Worksuite offers your organization’s Finance team a centralized hub for managing your contingent workforce.
Questions? Reach out to us anytime at support@worksuite.com. We’d be happy to discuss how Worksuite can transform your contingent workforce management.