If your team consist of contractors etc... then they'll likely have their own invoice and payment process. I use Freshbooks. One of my clients pays me via wire transfer, another does checks, and finally I have one project via moonlightwork.com (awesome service) where they actually handle payments (weekly!) which is pretty cool. If these are actual W2 full-time employees, I would suggest something like gusto.com to gi…
Might be a silly question. But do you leave the burden ( may be not really ) of the whole invoice management process on the contractor - how good/bad is it?
What “whole process” do you mean? They’ll send you an invoice they’ve generated. If their setup is good it probably takes What you do with it afterwards in terms of recording expenses, organising payment etc is your responsibility.
For the US-based folks on this thread, I think the don't-pay-me-with-checks is mostly a non-starter. 4 of the last 5 banks I dealt with now let you do mobile deposit, where you can endorse the check and deposit it into your bank account by taking pictures of the check with your smartphone. ¯\_(ツ)_/¯
The extent the US will go to, to avoid just moving on and adopting electronic transfers like ever other developed nation is astounding.
Check, envelope, and stamp is the simplest thing that might work.
checks don’t cross international borders cheaply. If I remember correctly from the last time I tried Barclays in the UK charged about £50 to deposit a USD check from a US bank.
Their website (much like the ones I checked here in Thailand and back home in Australia) mention up to 7 weeks clearing time.
I'm not obsessed with checks. Writing checks is technically simpler and has fewer dependencies and distractions. This question exemplifies the cost of other approaches: the OP is spending time researching alternatives to a simple and proven solution. For what? Mostly appearing sophisticated at the cost of increased financial attack surface, secret management, and uncertainty regarding future availability of the busin…
The OP is talking about remote workers. In my home country (Australia) foreign currency cheques apparently take up to 8 weeks to clear. The bank my Thai business uses say it can take “up to several weeks”. Sending a check isn’t solving anything it’s creating a fucked situation for the person you’re paying because paper cheque’s are an antiquated method of payment. In countries outside the US domestic bank transfers a…
The OP did not mention foreign workers in the question. Just remote. Not trying to contradict your experience. Just clarifying the context of my answer.
Employees don't invoice you, you pay them a salary. Contractors invoice you. If your team is contractors (or you're paying them as contractors for tax/liability/whatever reason), they invoice you and, if you're in the US, you should also ask for a tax form (usually a W8 or W9) based on where their tax residency is. There's many apps/services to handle your payroll out there. Gusto comes to mind but I've never used it…
Thanks! How do most companies hire? Employees or contractors? As far as I researched - most companies hire from outside the US as contractors. And they file invoices, and you pay the amount for it. Do you know of companies that hire people from outside the US as employees and keep them on the same payroll?
Hiring non U.S.employees on your U.S. payroll is a bad idea. The employee will have a dual tax nightmare having to reconcile the tax and social security against their home country regime.
checks don’t cross international borders cheaply. If I remember correctly from the last time I tried Barclays in the UK charged about £50 to deposit a USD check from a US bank.
Their website (much like the ones I checked here in Thailand and back home in Australia) mention up to 7 weeks clearing time.
The foreign bank generally had to do a fairly manual process to get a U.S. cheque cleared. This can take weeks. 7 weeks is a bit excessive, probably they are giving worst case scenario.
We have just over twenty remote workers internally and we use a mix. Full disclosure we are a service provider in this space, so I am just taking about what we do internally and freely admit I am biased because of the nature of our business.
1) For short term we engage some folks as independent contractors. They sign a freelance contract, they invoice us each month for their gross earnings and we pay them via international wire transfer. Tax and social security is their responsibility under the contract. We have some contractors who have been on this arrangement more than twelve months and we will try to move them onto employee status this year because of the risk of misclassification. For many tax and labor authorities the contract doesn't matter if they view it as an employment relationship.
2) If we have our own entity incorporated in the country where the worker is (UK, Australia) they sign an employment contract and we pay them through the payroll with full tax and social security contributions & deductions.
3) Where we haven't got our own entity or don't want to run our own payroll yet (USA, Spain, etc)
we use a GEO/Employer of record service. The employee signs an employment contract with the GEO, the GEO invoices us each month for salary + employer costs + their fees, we pay them and they pay the employee.
If you are small or just starting, begin with the first option. It's by far the easiest to administer. Eventually as you get bigger and more stable then you will come to a point contracting alone doesn't work anymore. Then the blended approach has worked very well for us.