The working world was headed in a remote direction long before 2020 hit. After its initial conception and proliferation, the internet soon exploded with a boom and mass integration into all aspects of life, including businesses. What then unfolded before the business world, within the last 20 years or so, became obvious: the idea of needing to “come into the office” would eventually become an outdated suggestion.
With the modern revelation that is the internet, distance is no inhibitor of affective communicators, who know how to make great use of the technology available to them. Because of this, businesses have elected to go more and more remote-centric in their working model, and less reliant on a single location of work usually through independent contractors and remote employees.
With this has come some decentralization, and the realization that not all work needs to be full-time. While this may hurt certain aspects of unity and the benefits of being a W-2 employee of a company, it has opened the door for the benefits and freedom of being an independent contractor.
How exactly, then, do you go about distributing independent contractor payments, especially to remote employees.
1. Make use of the technology that got you here
Technology has likely played a big role in the success of your business, if you’ve been able to expand to the point of hiring remote independent contractors to work with. You must realize that this same infrastructure is what will allow you to facilitate seamless transfers to your group of contractors.
There are plenty of online platforms that will allow you to both initiate, as well as process payments to your independent contractors. As someone relatively familiar with the internet and conducting your business on it, finding your way around these simple services should be a breeze.
2. Pick the right platform for your numbers
In most cases, using an online money transfer service to create and send a payment is fairly straightforward. You’ll first need to do some research as to which payment processing platform is right for you, though. This will depend on several things, of course, with the most important being the number of transactions you’ll be making, and the size of said transactions.
Some, if not most, online payment processors come with account limits prior to doing some verification. So, if you’re not careful, you could easily trigger an account suspension. Take audits of your payment needs and gather a rough estimate of how much you’ll need to pay per month in total transactions with your current workload.
3. Consider the tax implications
When choosing an option for handling your online payments, be sure to read the fine print regarding this business’ tax reporting numbers. While many payment processors use similar thresholds in regards to when they start reporting your transaction totals to your country’s tax authority, they may differ slightly.
Failing to take note of this could result in a miscalculation on your part, the processor, or even your annual taxes. As if taxes aren’t already complex enough in most instances, there’s no need to add more nuisances or complications to the matter.
4. Mind the fees
Almost all transaction businesses will have fees in some cases, as they have to make a profit as well. However, some fees are different from others, and not all will have the same amount of fees or the same percentage fee on certain activities.
Deciding which is right for you will depend upon if the said service is available in your country. It will also depend upon the amount of the transactions you’ll be handling, your financial institution’s fees and third-party policies, and, of course, your budget.
And of course, communicate!
Having picked the right form of transaction processing for your business or service, be sure to inform your contractors of this. Keeping your independent contractors and those you work with up-to-date on when they will be paid, their rate, and the method by which they’ll receive the transfer are all very important to remain trusted and have good overall relations within your company’s circle.
Updating your independent contractors when there’s a problem with payment, a delay, or even some missing information you need from them first is key and should be a solid base level communication expectation from your business. Don’t ever make them question you or themselves with having to ask about payments or anything else monetary. As the business owner or someone in a position to handle the financials of the operation, this is part of your job, and it will go a long way in creating a valuable reputation amongst your contractors. This is the only way to be successful when paying your independent contractors or remote employees.