Remote and distributed workforces are the new normal, and many companies worldwide now engage independent contractors rather than hire full-time employees. While there are numerous benefits to engaging independent contractors, the billing and invoicing process has been lengthy and complicated—up until recently.
Traditionally, managers exchange countless back-and-forth emails and phone calls to request and process invoices. Paying independent contractors is even more difficult when they reside in another state or country. HR, finance, and legal teams must exhaustively research local labor laws to ensure they compliantly pay their independent contractors. They also must overcome the challenges of currency exchange and new time zones when issuing payments to independent contractors abroad.
Now, to boost efficiency and ensure compliance, businesses turn to partners with the right mix of personal expertise and payroll technology. Companies that work with these partners get access to automated payroll systems that save time and increase accuracy—along with fast and reliable assistance from experts who understand their needs across markets.
There are numerous benefits to automating your independent contractor payroll. Read on to discover the top three.
Benefit One: Time Savings
Many independent contractor payroll platforms have an online time and attendance system connected to their software. This feature collects and stores important payroll data in one easy-to-use digital platform. With one central place to look for essential documents when questions arise about billing, HR teams eliminate hours of sorting through old emails or contacting independent contractors requesting necessary paperwork.
Companies also use automated technology to expedite the process of time-keeping and paying independent contractors. For example, when a business partners with Velocity Global, their workers submit time and attendance details in an online portal. Then, managers simply log in to MyVista, Velocity Global’s technology platform, to review and approve the workers’ invoices with just a couple of clicks. After approval, Velocity Global pays the independent contractors on their company’s behalf.
Turning to an automated payroll system doesn’t only save time for HR teams—it increases their ability to attract and retain the right workers. Independent contractors that are paid on time and without error are more satisfied than those who deal with unreliable payments. HR teams that deliver correct pay through an automated platform increase their appeal to independent contractors choosing between multiple assignment offers.
Benefit Two: Ensuring Regulatory Compliance
Worker classification and payroll laws vary state-by-state and country-to-country, creating a nightmare for HR and legal teams looking to maintain compliance and avoid fines.
When teams don’t have the time or expertise to understand market-specific regulations, they risk misclassifying workers as independent contractors rather than employees. Misclassification brings reputational damage, legal fees, audits, and fines up to $350,000. At the same time, teams must ensure they adhere to a number of other local labor laws, from rules regarding overtime pay to regulations on when independent contractors receive pay.
Companies that work with an independent contractor payroll partner significantly reduce their compliance-related risk—especially when that partner also specializes in worker classification. This type of partnership also saves companies money by reducing costly fines that come from the misclassification of workers, failing to adhere to labor laws, issuing late payments, and more.
By working with Velocity Global, companies get access to a tech-enabled platform that helps them:
- Avoid costly fines by accurately classifying workers as independent contractors or employees
- Gain peace of mind that their operations are compliant with local labor and payroll laws
- Shift complicated payroll responsibilities away from internal HR and payroll departments
Benefit Three: Cost Savings
Time is money, and companies that work with an automated payroll processing partner reduce costs by increasing the efficiency of their own internal teams.
When HR, legal, and finance teams don’t have to take on the burden of compliantly paying independent contractors across markets, they can devote full attention to their day-to-day tasks. Keeping your teams focused on their core responsibilities sets them up for success, so your company reaps the full benefits of their skills and expertise.
At the same time, companies that automate payroll spend less time—and money—searching for new workers. Companies in the United States lose one trillion dollars on employee turnover each year. While this figure does not account for independent contractors, the bottom line is that turnover is exceptionally costly for companies. Considering the time spent required to recruit independent contractors, and the lost productivity that occurs when companies lack the skills they need to deliver on business goals, it’s clear that HR teams must do everything in their power to retain independent contractors. Delivering accurate and on-time pay does just that by giving independent contractors the peace of mind and consistency they expect.
Manage Independent Contractor Payroll With Ease
Automating payroll transforms the way organizations manage and pay their contractors. Velocity Global’s independent contractor payroll platform, MyVista, reduces the time spent on data collection and reduces the risk of making costly misclassification and compliance mistakes. Companies that partner with Velocity Global scale and grow their business with ease, rather than diverting their internal resources to navigate complicated HR and payroll laws.
Ready to explore what Velocity Global’s independent contractor payroll platform can do for your company? Reach out today to find out our tools benefit your business.