Independent contractors are used by most businesses around the world to complete project-based or casual labor. While part-time and full-time employees are typically in the same country, on payroll and paid through a payroll provider, contractor payments are often more challenging, especially if they are overseas.
In this article, we’ll break down some common challenges and offer best-practices for paying contractors. For the context of this article, we’re assuming you’ve already found contractors to work with, and are trying to find a more cost effective and efficient to manage and pay them, and that you're not looking for a platform that helps you find contractors.
Paying Domestic Contractors
Paying domestic contractors in most countries is straightforward. You could pay them a variety of ways:
If you’re working with more than 5 contractors at once, this can start to become challenging, and take up a significant amount of admin time. The challenges that present themselves become:
Payment Rails solves these types of challenges, giving you an online platform to manage all of these details. From collecting W9s, addresses and banking details, to sending payouts, tracking them, and synchronizing them back to your accounting system.
Paying International Contractors
Paying international contractors presents different challenges compared to paying domestic contractors. Here are some of the common challenges:
At Payment Rails, we’ve developed some best-practices to managing international contractor payouts:
At the end of the day, contractors are an important part of many businesses. Paying foreign contractors and domestic contractors on time, and managing those payments is a very important component to building trust in your relationship with the contractor.
Payment Rails provides a flexible solution for your business, whether you pay 5 contractors a month, or 500.
If you have questions or like to learn more, we’d love to chat with you. Please send an email to firstname.lastname@example.org to chat with us.