Easing Payment Friction: How Payouts APIs Improve the Freelance Creative Experience
As of 2024, there are over 76 million freelancers in the United States alone—an estimated 62 percent of all companies in the country hire talent as independent contractors. There are many reasons to tap into the massive pool of creative freelancers. It's a great way to bring on graphic designers, writers, content producers, web developers, and more whenever you need them without the logistics of hiring a new full-time employee.
Hiring freelancers gives your company more flexibility in obtaining talent for the project you need to complete. However, paying non-employees isn't always easy. Many challenges exist for businesses like yours, and failing to reduce payment friction can cause you to lose great workers while experiencing a hit to your reputation in the industry.
Fortunately, simple solutions can strengthen your relationship with freelance creatives. A payout API can overcome the many hurdles that stand in the way of fast, efficient, and frustration-free payments. Let's explore ways using an API like Dots can transform how your business works with freelancers.
Challenges in Freelance Payment Processes
Paying standard full- or part-time employees is easy. You collect necessary information, withhold taxes, and send funds directly to your employees' bank accounts via direct deposit. However, freelancers are not employees, so payment processes work much differently.
While internal operations vary from company to company, sending payments is generally more involved. You must handle tax reporting duties because you're not withholding taxes or providing benefits. On top of all that, there's the matter of finding the best way to accept invoices and send payments promptly. If you're hiring global independent contractors, even more challenges exist.
Ultimately, hiring freelancers can benefit your business in many ways. But, you must iron out the kinks in your payment processes to ensure a mutually beneficial arrangement for you and the people you hire. Otherwise, you may breach your contract, ruin your reputation and lose out on amazing talent.
Common Payment Hurdles
The biggest hurdle for companies like yours when paying freelancers is offering payment flexibility. Independent contractors' accounting and banking needs are much different from your full-time employees. For example, some may have separate business accounts, only accept payments on verifiable platforms, or use currencies different from yours.
Best practices involve allowing freelancers to get paid on their terms using the method of their choosing. However, most companies aren't equipped to offer multiple payment methods, and limiting how you send payouts can ruin the freelance creative experience.
Only offering written checks or wire transfers through a single payment gateway often causes severe delays, forcing freelancers to move their money through multiple platforms until it's truly accessible. There are countless ways to pay people; failing to take advantage of them can turn talent away.
How Payouts APIs Streamline Workflows
Payouts APIs are revolutionizing the freelance world, making it easier for businesses to send payments quickly and efficiently. Integrating an API like Dots into your current system provides greater payment flexibility while automating many tasks you must complete to create a better relationship with your freelancers.
Instead of navigating those challenges with conventional payment processes, you can optimize your approach to sending payouts to freelancers and independent contractors. Send payments instantly, automate transactions, streamline reporting duties, and more.
Instant and Secure Payments
The ability to send instant payments can make your business an ultra-attractive client for freelancers. Many deal with delays regularly, so offering multiple instant payment methods is a great way to attract the best creative workers. With Dots, you can send payments in minutes via common digital platforms and mobile apps. For example, you can send money through PayPal, use Venmo, initiate real-time payments (RTP) for same-day transfers to a bank account, and more.
APIs also enhance security, eliminating the common concern of fraud and theft among freelancers. Dots uses bank-level security protocols, including end-to-end encryption, personally identifiable information tokenization, and more. Provide peace of mind without sacrificing payment flexibility.
Automation for Freelance Workflow
Do you work with several freelancers? Doing so can greatly expand your creative workforce, but it can create a more complex payment process. A payout API simplifies things with automation. Integrate and sync your API with your accounting software and send payouts en masse like clockwork.
APIs enable you to set concrete payment dates, giving your freelancers more predictability and reliability. Automation does the heavy lifting, sending payouts to as many freelancers as necessary, even the global ones.
Integration With Many Platforms
Contrary to popular belief, developing better and more efficient payment processors doesn't have to be difficult. APIs like Dots offer smooth and seamless integration with many platforms. Integrate your payouts API with your existing software and accounting systems. Then, use automation to streamline how you send payments.
There's no need for complicated, expensive, and time-consuming back-end development. Add as many payment rails as you need in minutes, and utilize automated features to send payments without additional manual labor.
Transparency and Communication
Payment disputes are common among freelancer-client relationships that lack transparency. When you don't keep your independent contractors in the loop and allow payment delays, your creative workers will worry.
An API can provide complete transparency into your payment processes, alleviating concerns and minimizing the risk of disputes. Track transactions in real-time and communicate status updates to every freelancer. The opaqueness of your payment processes can make all the difference, improving reliability and strengthening your business's relationship with freelancers.
Benefits for Creative Professionals
Creative professionals have much to gain from your business using a payouts API. First, they can enjoy improved cash flow. By giving your gig workers and freelancers the freedom to choose how to receive payments, you're giving them easier access to their funds with zero delays. That means no more waiting several days or weeks to get their hands on the money they deserve.
Whether it's bank account transfers, mobile app payments, or digital wallet services, the freedom of choice significantly enhances the cash flow for gig workers and freelancers.
Another way your payout API benefits freelancers is through better reliability and transparency. Independent contractors often have no choice but to hound clients for payments, never knowing when they'll get compensation for the work they completed. An API solves that problem. Automation features, transaction tracking, and better communication keep freelancers in the know, making payments predictable.
Overall, these benefits significantly enhance satisfaction when working with your company. A payout API like Dots can help build trust in your payments system and business.
Simplify Your Freelancer Payouts With the Dots API
Don't let outdated payment processes cost you talented freelancers. Creative freelance workers can help your business in countless ways. But because they're not employees, you must work harder to improve satisfaction and streamline payouts.
Dots is a payout platform built for companies like yours. Our API eliminates many challenges businesses face when hiring non-employee workers. Dots can improve how you onboard your new freelance talent, collect relevant information for tax reporting and communication purposes, provide greater payment flexibility, enhance transaction safety, and more. Send payouts instantly with countless payment method options, track transactions, generate reports, and use automation to streamline your processes.
We offer countless features that make those notorious payment issues a thing of the past, no matter your industry or the number of freelancers you hire.
Reach out today to schedule your Dots demo and see firsthand how a great payout API can improve the freelance experience.