An Overview
Many businesses outsource tasks to freelancers and contractors. This can help organizations get more work done and save money for specialized tasks that don’t require full-time employees. However, just because they don’t work at your company doesn’t mean they shouldn’t be paid in a timely manner.
Some organizations will try to pay contractors in a way that is beneficial for their cash flow and accounts payable, but this often hurts contractors. You have to consider the way contractors view being paid late or being paid inconsistently. If you want to keep quality contractors and get the best possible work out of them, it’s essential to pay your contractors on time. In this article, we’ll talk about why paying your contractors on time is so important and how you achieve this.
If you want to make contractor and freelancer payouts easy, Dots is your solution. Dots can automate contractor payments and easily provide you and your contractors with numerous payout options. Schedule a demo today to see how the Dots API can help you with payouts. In the meantime, read on to learn more about the importance of paying your contractors promptly.
Increase Quality
Contractors who get paid on time are going to produce better quality work. If you expect your contractors to meet deadlines and do consistently good work, they’re going to expect the same from you. In most cases, contractors work for multiple clients. If you’re the client who doesn’t prioritize them, they’re not going to prioritize you either. If you want them to give you their best effort, you need to make sure they’re getting paid for their efforts when they expect to be paid.
Chances are your work is only a part of a contractor’s day or even a small part of their week. If they know you’ll provide them with their pay on time, they may choose to dedicate their best working hours to your company over other clients. Remember, you’re working with human beings. Although they’re not your direct employees, they operate in the same way your employees do. If you want them to dedicate hours of their day to producing quality services for you, it’s important to make it worth their while.
More Consistent Work
If you want your contractors to be consistent, then their pay should be consistent too. If you’re not paying them on time, then they won’t feel much pressure or obligation to complete their work on time. Contractors with strong work ethics may continue to deliver consistent work despite a disparate pay schedule, but burnout will inevitably set in and the consistency will likely decline over time. Plus, you don’t want to take advantage of hardworking contractors. These are the types of freelancers you want to have on your side.
If you plan on maintaining a relationship with a contractor over a long period of time, you can’t afford to risk their consistency declining during the contract period. It won’t be beneficial for you in the long run and it certainly won’t be beneficial for them. Although you may hire a contractor because of their values, they’re not a part of your company. They aren’t necessarily motivated by your goals and mission statement like many of your employees might be. They’re going to be primarily motivated by the reliable compensation provided. You can’t expect consistency if you don’t provide the same in return.
Happier Workers
As expected, contractor happiness and satisfaction is going to only improve when you pay them on time and consistently. It’s best for everyone you work with to be content because it only increases quality of work and makes working together an effective and efficient process. An unhappy contractor is going to be more resistant to suggestions and tight deadlines. If a contractor is happy, they may be more than willing to take on some last-minute work or make an extra effort for you when you need it. Unhappy contractors, on the other hand, will have little to no motivation to do more than the bare minimum. And they shouldn’t be expected to if they’re not getting paid on time. Imagine if you weren’t paying your employees on time. They would likely be upset and get frustrated. They may even get frustrated enough to quit. Contractors are going to be the same way. If you have a great contractor who does quality work, they can easily find work elsewhere. They likely won’t hesitate to go work with a client that will pay them on time.
Believe it or not, unhappy contractors can also affect the morale of your regular employees. Chances are, the work your contractor does is part of a process that involves your regular employees. If a contractor is unhappy,that will likely affect your team in some way as well. Additionally, if a contractor’s work is an important part of their processes and it is delayed, that team can experience bottlenecks. This can all be avoided by keeping contractors happy and paying them on time.
Save Time
As mentioned, some companies like to schedule contractor payments in a way that benefits cash flow. This can lead to contractors not getting paid on time or getting paid inconsistently. But, if you pay contractors on time instead, it makes everything simpler for both parties. Late payments can lead to contractors reaching out to various people in your business which can cause those team members to take on extra tasks, slowing down their work. Automating your contractor payments with an API like Dots can make sure that everyone’s time and work is respected.
Contractors may also withhold work until they’re paid, leading to wasted time. When contractors are paid on time, their work will be completed on time and no extra measures have to be taken. It just makes things easier for everyone to ensure your contractors are paid. Additionally, giving your contractors a reason to complain can negatively affect your company’s image as a whole.
Build Better Relationships
Finally, paying your contractors on time helps you build better relationships with them and other contractors in the industry. If you have a good relationship with a contractor, they’re likely to spread the word and let others know. This helps make it easier to find contractors and work with the best of the best. Conversely, if a contractor has a bad experience with your company, other contractors are going to find out. As connected as everyone is today, the contractor and freelancer community for your industry is likely smaller than you think. People talk to each other and leave reviews for companies. If another contractor speaks to someone who had a bad experience with you or if you end up getting bad reviews on a website, you can lessen your chances of working with quality contractors in the future.
For any business, good relationships are important. While trying to parse out contractor payments on your own schedule may seem like a good way to manage your cash flow, it can quickly backfire. The advantages of paying your contractors on time will always heavily outweigh any disadvantages. If you want to work with the best people, you have to be an enjoyable and dependable organization to work for. Ultimately, paying people on time is one of the easiest things you can do to create a better relationship with your contractors.
Paying your contractors on time can be exceedingly easy when you use a payout API. You can automate payments, use the preferred payment processor of your contractors and easily collect the necessary tax information. Dots makes this all possible.
Simplify Your Contractor Payouts With Dots’ API
If you want to simplify contractor payouts and always get your contractors their money on time, choose Dots as your payout solution. You can easily send payments to be accepted on multiple platforms like PayPal, Venmo, Bank Transfer, Gift Cards, and anything else your contractors might use.
Instead of developing multiple payout workflows, you can easily automate and manage your payouts from one intuitive platform. You’ll never miss another contractor payment and your contractors will love getting their payment on time, every time. Dots can even handle international payouts for you. Our API also takes care of security and compliance while collecting all the necessary tax information that you’ll need come tax season.
In addition to the payout features Dots offers, our API can also make it easier for you to receive payments through multiple payment processors. In short, you can simplify all of your payment processes while also saving time and developer resources.
Ready to learn more about the Dots API? Schedule a demo today to see how we can help your business.