Reaping the Financial Benefits of the Gig Economy

Pavel Shynkarenko
Posted by Pavel Shynkarenko on Jul 30, 2019 10:55:20 AM
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Businesses understand the benefit of using a pool of talented and flexible freelancers in their workforce and they are jumping on the “gig economy” train.

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Although the trend is enlarging, business structures still need to adapt to managing freelancers which include the never-ending task of paperwork. As mundane as paperwork can be, it is vital to get it right and completed in a timely manner - particularly the financial-related kind. Companies need to have the cash ready to pay their freelancers once they have received an invoice and freelancers need to get paid in a timely manner so they can manage their cash flow. Managing freelancers administration and payments can get more cumbersome once overseas freelancers start getting added into projects.

For both freelancers and companies, payments are never as simple as they should be and it is no surprise that they generate issues resulting in delays or even worse - create negative working relations between both parties. While freelancers complain about not being paid or being paid late, companies must also deal with chasing invoices that may be incomplete or filled with errors. To make matters even more complicated, they are unsure of who has done what; when they did it, and how much they will need to get paid when the work is finished.

Many companies are managing their modern freelance workforce with traditional tools that are not fit for the job. Excel spreadsheets, internal project management software, phone calls, and expensive wire transfers do not meet workflow needs. It is not surprising that a major problem with the gig economy includes overdue payments.

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Work smarter, save money

Companies need to implement a smarter process to the planning, hiring, organising and remunerating their freelance workforce. This where a Freelance Management System (FMS) comes in. An FMS is a cloud-based solution that enables companies to manage the workflow with freelancers from one platform.

Having an FMS integrated into a company’s IT infrastructure creates a central and organised approach for managing, reporting, being compliant and paying an external workforce. In addition, companies will have all invoices and expense reports automated - ready to send to the accountant when the time comes to declare taxes.

Flime.com is a new, innovative, automated, freelance management service that enables firms to organise and manage their freelance suppliers seamlessly, as though they were in-house employees, saving valuable time and money.

Simplifying payments

Flime simplifies the payment process by putting businesses back in the driver’s seat. Rather than use expensive wire transfers or separate, third-party payment platforms, Flime ensures hassle-free paydays to freelancers across the globe.

Businesses can benefit from adding the funds they’ve decided to allocate for projects directly on to the platform ensuring that the cash is ready to transfer when the time for paying an invoice comes. Once the freelancer has completed the work and it has been checked and approved, a correct and complete invoice is automatically generated and sent to the company. The payment can be made by the company with just one click of the mouse and money is sent from the reserve on the platform. Freelancers receive their money instantly and in real-time.

Flime’s seamless payments span 193 countries and are four times less expensive. Using Application Programming Interface (API) technology, paying at scale is also quick and painless, saving finance teams considerable time and effort. In addition, late or incorrect invoices; payment delays and employee or freelance frustrations are reduced due to the precision and correctness of the automated service.

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Tax savings

It’s a little-known fact but by using a freelance management service based outside of the UK, companies can benefit from tax savings.

As Flime is headquartered in Amsterdam and is effectively paying freelancers on behalf of UK businesses, the payments do not fall within the scope of UK VAT. Businesses only need to pay the amount invoiced for the freelance services delivered, without the tax. This 20% saving on VAT makes a big difference to the payroll bill and ultimately, the bottom line.

Flime ensures that freelancers’ invoices are 100% tax compliant and that all freelancer data stored adheres to the new GDPR regulations. Businesses and contractors alike can benefit by operating an instant, effective, hassle-free, cross-border payroll.

The gig economy is here to stay. Paying freelancers across the globe can be expensive and time-consuming but by using a freelance management service, like Flime, companies can save money, time and increase effectiveness and productivity. To find out how your business could benefit visit www.flime.com.

 

Topics: Business, Finance, Taxation, Paperwork