Working with independent contractors can offer great amounts of flexibility, but it can get admin-heavy if you don’t digitize the onboarding and year-end tax processes.
At Payment Rails, we believe the admin work of managing independent contractors should be almost fully automated and digitized, and this article will walk through how we helped other businesses accomplish just that.
First, let’s take a look at what a typical manual process looks like.
Onboarding contractor workers can be summarized in the following steps for most businesses:
The year end process for generating Form 1099-MISC and Form 1042-S typically goes something like this:
Now, let’s take a look at how Payment Rails digitizes this.
Onboarding contractors would now look something like this:
At the end of the year, the Form 1099-MISC and the Form 1042-S process would look like this through Payment Rails:
The point is, by keeping your Payments and Tax information on the same platform, many of the manual copy-pasting or exporting-importing at tax time is automated. Payment Rails has both the payments data and the tax information, so the system can easily generate all your Form 1099s and Form 1042s.
Since we’re integrated with a mail and email provider, we also automate all the mailing and email of the forms.
You might see by now that we’re pretty passionate about this stuff. We’ve put together the Ultimate Guide to Global Mass Payments e-book which dives deeper into industry best practices when paying suppliers and contractors around the world.
Just type in your details below, and we’ll send you a copy of the e-book for free!
Tags: Contractor Tax