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Johannes Kral
Companies of all sizes and industries are increasingly working with freelancers or other self-employed workers. This results in new requirements for an efficient organization of these external employees - from onboarding and the actual project work itself to payment.A Freelance Management System (FMS) is a cloud-based solution that helps organizations manage their external resources. These systems typically include onboarding, contracting, project management, billing, and payment solutions. In English, a Freelance Management System is often referred to as a Freelancer Management Platform, a Freelance Management Solution or a Freelance Management Software.
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Companies that permanently or regularly collaborate with more than ten freelance employees typically need a technical solution to manage them. The establishment of an FMS ensures transparency about which external employees work for the company, which projects they are involved in, and which budget is allocated to the cooperation.Within a company, different departments can use an FMS for different reasons:
IT, Marketing & PR - For onboarding freelancers, to monitor projects and to check availabilities.
Finance - For centrally storing invoices and making payments in one place.
HR - To create standardized contracts and save them within one software solution.
Law - To keep an eye on the employment status of freelancers and to avoid compliance risks.
An FMS serves as a central platform for organizing all activities in collaboration with freelancers. Depending on the specific needs of a company or an individual department, an FMS should support the following functions:
Integration of freelancers into the company
Preparation and signing of contracts (electronic signature)
Storage of contracts and other documents
Creation of talent pools
Assignment of projects
Monitoring the status of projects
Invoice management
Making payments
Storage of tax forms
Creation of reports about expenses for external resources etc.
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Saving time and increasing productivity: By switching from an often manual method of managing freelancers or by sharing a self-developed digital solution, companies can achieve a tangible increase in efficiency when working with external partners.
Standardization and assurance of compliance: Without an FMS, freelancers are usually integrated into corporate processes via a multitude of channels - from emails and telephone calls to Excel spreadsheets. Due to a lack of standardization, there is no guarantee that the onboarding of freelancers will be compliant or that a legally correct contract will be signed. This lack of standardized processes exposes companies to legal risks. An FMS makes it possible to integrate freelancers in a scalable, standardized and compliant way.
Improving the relationship with external employees: Just like full-time employees, freelancers expect to be treated well. For companies interested in attracting and retaining the best and most skilled freelancers, a seamless onboarding and the fast payment of freelancers are essential to building a long-lasting, positive relationship.
Ensuring transparency and control: An FMS gives companies a complete overview of all the freelancers in the company's network. A searchable database of freelancers with important information such as contact details, rates or work histories enables companies to work smoother. This includes the ability to work faster, save money, ensure compliance and close skill gaps in the business.
Every company has different requirements for managing freelancers. Do you do background checks? Does the freelancer have to sign a contract or a nondisclosure agreement? Does the freelancer need a professional liability insurance?
Each company stores different information about different types of freelancers. To effectively implement an FMS, you should define the types of freelancers you want to work with on the respective platform e.g. Lano. Best would be to categorize the freelancers according to their area of expertise (marketing, design, etc.) and, if necessary, their location.
Before the introduction of an FMS, the payment of freelancers may have been sporadic and was handled by your accounting department. With an FMS you have the opportunity to standardize how and when you pay your freelancers. Always at the end of the month? Three days after the approval of the invoice?
An FMS is your management system for all your freelancers or external partners and will be integrated into your existing systems. For this step, one might think of e-signature tools such as DocuSign, which make contract signing easier or of access to your project management and communication tools such as Asana and Slack. You should determine which existing systems you want to connect to your FMS and continue to use.
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