According to a study conducted by SAP, 42% of the workforce spend is attributed to contingent workforce – service providers, independent contractors, experts, consultants and freelancers.
The unpredictable business climate has impacted the hiring decisions of most businesses. Now, fewer businesses can afford to hire full-time. To stay flexible and drive efficiency, companies of all sizes hire independent contractors, highly skilled consultants, experts and freelancers.
Maintaining a Vendor Database
Often, businesses use the services of independent contractors and freelancers only once. However, they still need to create their profiles in the vendor database and reconcile the invoices received from them.
The Quality of Vendor Invoices
Ensuring that all service providers are aware of all regulatory requirements and are knowledgeable of VAT, GST, etc. is a tedious exercise. Each invoice needs to be verified and proofread, often manually, to avoid penalties, tax compliance, etc.
Reconciliation of Vendor Invoices
Having many service providers turns the reconciliation of vendor invoices and payouts into a real nightmare. On top of that, each invoice is likely to be issued using a different template which is an obstacle to streamlined invoice parsing.
Creating Multiple Payouts
Creating hundreds of payouts manually is prone to human errors and likely to result in payouts to incorrect accounts, transposal errors, messed up currencies and lots of other problems.
Creating Payouts in Multiple Currencies
Those businesses hiring remote teams face a common challenge – their service providers and freelancers demand to be paid in either local currency or some preferred foreign currency like USD, GBP, EUR, etc.
How Does Transformify Self-billing Module Work?
Upload a csv batch payment file
Approve batch payments
All payouts are automatically created. You can approve them in bulk or one by one, reconcile the number of lines, the total amount and more.
All Self-billing invoices are issued automatically
Upon approval, a self-billing invoice is issued automatically by Transformify self-billing module. There is no need for your service providers to be familiar with the tax legislation, all mandatory fields, etc. An email notification is sent out to each service provider or freelancer and they can download the invoices from their Transformify profile.
No Need to Store or Amend Payment Details
Each service provider has a fully GDPR compliant profile with Transformify and can provide and amend payment and invoice details.
A Choice of Payment Methods
Your contingent workforce, service providers, independent contractors and freelancers can choose from a variety of payment methods. These include:
- Direct bank transfer in any currency across the globe (HSBC, Revolut)
- E-wallet ( Payoneer, and a variety of e-wallets via Rapyd)
- Prepaid card linked to e-wallet ( Payoneer)
- Mobile wallet (SamsungPay, ApplePay, etc. via Rapyd)
Needless to say, Transformify is always open to integrating with new payment providers to satisfy the needs of its business clients and their contingent workforce.
All service providers self-bill Transformify. Our business clients receive invoices from Transformify only. Even more, the invoices can be directly uploaded into the clients’ ERP or accounting software.
Maintain Just One Vendor in Your Vendor Database
As our business clients receive invoices and transfer payments to Transformify only, there is just one vendor record in the vendor database. The reconciliation of invoices and payments is a breeze as well.
Manage the End-to-End Process with Transformify ATS and FMS
From a single dashboard, Transformify’s clients can access ATS (Applicant Tracking System), FMS ( Freelancer Management System) and Self- billing. This means that business clients can easily use Transformify ATS to source new service providers, independent contractors and freelancers. Once the right service providers have been sourced, the business clients can benefit from Transformify FMS to manage them, assign them to projects, index the pool of service providers to easily allocate tasks and projects to them and much more.
What is Self-billing and How to Choose the Right Self-billing Software?
Self-billing allows business clients to issue invoices on behalf of their suppliers. There are a variety of requirements that are to be met, including but not limited to:
- There needs to be a formal self-billing arrangement in place and both the supplier and the customer need to agree with it
- The client needs to enter into a self-billing agreement with each supplier/service provider
- The invoice details of the supplier shall be complete and in compliance with the applicable legislation
- The agreements with suppliers need to be reviewed regularly
- The self-billing invoices need to be issued correctly and include the right VAT, GST, etc, information if applicable.
The self-billing agreement is a formal legally binding document that gives the right to the client to issue self-billing invoices on behalf of the supplier.
The supplier shall agree that no invoices will be issued for the goods and services provided to the client (as the client will be issuing self-billing invoices on their behalf)
Also, the supplier shall agree that they will inform immediately the client if the supplier gets deregistered for VAT, there is a change in the VAT number, in case of mergers and acquisitions, bankruptcy, liquidation, etc.
A new self-billing agreement needs to be signed by the parties in case of transfer of going concern to a third party and the new business owner needs to carry on with the self-billing arrangement that was previously in place.
Reviewing Self-billing Agreements
In most countries, the validity of a self-billing agreement is 12 months. Hence, self-billing agreements need to be reviewed every 12 months. Normally, there is no need to review a self-billing agreement if the initial arrangement clearly states that the client will issue self-billing invoices on behalf of the supplier for a period shorter than 12 months.
All clients that have signed self-billing agreements in place need to keep records of the arrangement with their suppliers. Depending on the country of incorporation, these as a minimum include:
- A copy of the self-billing agreement
- Copies of all issued self-billing invoices
- Copies of correspondence or other proof that the self-billing arrangement has been reviewed at least once every 12 months
- The names, addresses, registered addresses, VAT , GST, etc numbers ( if applicable) of the suppliers.
If the client is registered for VAT in the EU or the UK, on top of all the details that must go on every full VAT invoice, the client needs to be in compliance with some other requirements applicable to issuing self-billing invoices. These include:
- The statement ‘’ The VAT shown is your output tax.’’
- ‘’Self-billing Invoice’’ instead of ‘’Invoice’’ needs to be clearly printed on the face of the document
As all of the above is not easy to arrange for, most businesses interested in a self-billing arrangement are looking for to automating the self-billing arrangement, the issuing of self-billing invoices, keeping the records of suppliers and so on.
How to Choose a Self-billing Software?
There are not so many available options out there. Most accounting software providers and ERP systems offer a self-billing module but it normally automates the issuing of self-billing invoices only.
The following checklist will be helpful to those companies going through the self-billing software vendor selection process.
Self-billing Vendor Selection Checklist
Depending on the industry the business operates in and the number of suppliers, the following points are to be considered:
- Does the business plan to set up self-billing arrangements with both service providers and independent contractors/ freelancers?
- Are the service providers and independent contractors/ freelancers based in the same country?
- How many service providers and independent contractors/ freelancers are to be onboarded?
- How many countries/territories are to be covered?
- Is the business planning to also automate the payouts to service providers and independent contractors/freelancers?
- If so, how many currencies and payment methods are to be supported?
- Is there a need to turn the self-billing arrangement into an end-to-end solution?
- Is it possible to integrate the self-billing software of choice with the existing ERP, accounting, etc. systems?
- How is the reconciliation of self-billing invoices and payouts to suppliers addressed by the self-billing software of choice?
- Are customizations possible at all? If so, what is the cost?
- How is the post-integration maintenance arranged for?
- What is the pricing model of the various self-billing software solutions and which one fits best into your budget?
There is no single self-billing software that meets the need of all industries. The right self-billing software shall be able to handle big volumes of self-billing invoices, provide all necessary functionalities to stay in compliance with the applicable legislation, integrate with the ERP or accounting software you have in place, and ideally, automate the payouts to suppliers in any currency.
Are you interested in learning more about self-billing software? Message firstname.lastname@example.org