I’ve had the pleasure of connecting with many finance teams to better understand how they can do their job more effectively. I am always surprised by how much manual effort finance teams take on in the freelancer management process. Getting freelancers paid is the last but most crucial piece of their engagement, so why does it have to be so complicated and full of one-offs and edge cases?
Believe me when I say it’s important to make the finance team’s lives easier…they’re managing your budgets. Let’s start to invite them to the table earlier and sooner in the process. Today is the day we focus on making Finance’s life easier!
The Role of Finance Teams in FMS
Finance teams are vital players in a freelancer management system. They often bear the brunt of manual processes, including data export, import, mapping, and cleanup. Additionally, they verify invoice details, a critical but time-consuming task. Simplifying their workload can increase efficiency…not to mention they often oversee your budgets…
Finance teams face several challenges in the freelancer management workflow. These include:
Invoice Allocation: Freelancers sometimes submit invoices without project details, causing finance teams to spend time chasing managers and freelancers to properly allocate that invoice.
Onboarding Complexity: Managing freelancers' bank details and other information in different systems complicates the onboarding process.
Spend Reconciliation: Finance teams struggle with reconciling spend when numbers do not align.
Project/Client P&L Analysis: Accessing project-specific profit and loss data, often within the FMS, is critical yet challenging for clients managing multiple projects.
The Voice of the Finance Team
Finance teams play a crucial role in maximizing an organization’s profits. So why are they spending their time chasing down managers to allocate freelancer invoices with the right project? Isn’t there a way for freelancers, managers, and finance to all co-exist in harmony? There is!
The financial management is not a one-size-fits-all. There are different approaches depending on your organization. For example:
Creative Agencies leverage freelancers to staff client projects, meaning Finance is reconciling budgets to ensure high-profit margins…or at least informing you if that’s not the case.
Editorial / media outlets invest in freelancers for content creation with the end goal of increasing ad revenue or subscribers; the more diverse and higher volume of quality content, the more opportunity for revenue.
Staffing firms deploy a workforce of freelancers that are matched with clients, generating income from having higher bill rates. It’s a tedious job to map client revenue with the freelancer expense…especially at scale.
They wouldn’t be able to do any of this without their trusted accounting software. However, accounting and freelancer management tools don’t often integrate with each other, especially in a way that reduces work for all teams.
The Power of a Freelancer Management Tool (…and the mistakes you can avoid)
A freelancer management tool, such as Worksome, Worksuite, or Bubty, can streamline the process of tracking freelancer payments and managing the payout process. This reduces a huge amount of work for finance teams, since they no longer need to figure out how to land funds for a high volume of freelancers/vendors.
But teams constantly get one piece wrong. They don’t configure the FMS to align with the accounting software’s financial structure.
When setting up an FMS, organizations often focus on setting up their projects, tasks, and invoices to manager-centric or freelancer-centric approach, aiming to scale with fast adoption across their teams. However, your first step should actually be coordinating with the Finance teams to ensure that financial codes (Cost Center, Department, Expense Types, etc.) are tracked from the beginning. The last thing you want is delays and friction when paying your freelancers…that’s not good for your brand. Aligning Projects, Tasks, and Assignments with project budgets can significantly ease the management and tracking of freelancer spend.
My Pro Tip: Before you set your Projects/Tasks/Assignments module in your FMS, ask the finance team what finance codes and structures will make it easiest for them: think Department, Cost Center, Expense Types, etc. That way, you’ll set yourself up for success when integrating the FMS and Finance tool.
The Benefits of Integration
From a financial management perspective, integrating finance tools with FMS enables efficient project budget management.
Not to mention faster payments.
Plus a more complete view of spend.
In adiition, stronger forecasting.
And onboarding / offboarding simplicity.
And better margin management.
And no more chasing a manager to find out what exactly a freelancer did where the cost should be allocated.
When different teams, particularly finance, have access to connected finance tools and FMS, it streamlines and enhances business operations. It’s not just a nice-to-have anymore; it’s a must-have.
Finance, we see you and we’re here to help.
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