Many small businesses rely on highly skilled freelance and flexible workers to help them grow and run efficiently. It is imperative that in order to retain and attract the best talent, businesses do not repeatedly make freelance payments late.
According to the Federation of Small Businesses, late payments are killing 50,000 businesses a year.
For a small business looking to scale up and grow, it is vital that they avoid late payments and do not join the list of businesses that are dying because of them.
Here are five ways that businesses can keep on top of their payments:
Many small businesses that rely on contractors receive a vast array of timesheets, ranging from highly detailed Excel spreadsheets to handwritten letters and even faxes. The process of sorting all this information out is confusing and a waste of time.
Small businesses should ensure that all freelance or flexible staff submit their timesheets in a coordinated and standardised fashion to reduce time spent organising them.
Ditch paper timesheets
Paper timesheets may have worked in the past, but the truth is that they are more prone to human error, use up paper and take up physical space. Timesheet errors are made by both workers submitting them and employers processing them. Regardless of who makes them, it wastes valuable administration time for staff that many smaller businesses simply cannot afford to lose.
Replace outdated technology
Do not get comfortable with technology. Both software and hardware are constantly being innovated, and you should take advantage of this in order to execute faster freelance payments. In some instances, companies might consider completely replacing existing technology with new applications. This is particularly appropriate if older, legacy apps are still in use.
Legacy apps are often on-premise and installed to servers or computers on your company site. The cost overheads associated with this approach in terms of hardware, software, IT resource and energy consumption are substantial. Wherever possible, consider replacing on-premise applications with cloud alternatives. Not only are these cheaper, but they will allow you to process data faster.
Chase multiple timesheets with one click
Chasing timesheets is frustrating and can take up lots of time with numerous phone calls or emails. It is vital that all hands are on deck in a small business, and any time an employee is chasing timesheets takes them away from other important tasks.
Companies should consider introducing a system that integrates SMS and email bulk sending, which lets them chase lots of timesheets with one click of “send”. This automation will provide faster payments and reduce time previously spent chasing timesheets.
Get a bird’s eye view
When you’re at the coalface of a growing business, it’s sometimes difficult to see the bigger picture. Many companies do not always have the tools to view their overall performance. Losing this bigger picture can result in delayed administrative processes, including payments. Consider using back-office software that features analytics dashboards. These dashboards will co-ordinate all your important management information, so you can see your business’s key numbers in real-time, including gross margins and gross margin percentages.
Nick Woodward is CEO of ETZ Payments