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Updated: Sep 29, 2022

Learn the 6 essential steps for onboarding any freelancer, and how smart, automated onboarding saves you time and money while also protecting your company.

Ready to onboard freelancers, independent contractors, and consultants in mere minutes instead of hours or days? Learn the 6 essential steps for onboarding any freelancer, and how smart, automated onboarding saves you time and money while also protecting your company.

Checklist for onboarding freelancers and contractors

Whenever your company engages a new freelancer, you should include these six steps in your onboarding process.

1. Contact details

Make sure you have a record of the new vendor’s contact details. Typically this includes company name (if applicable), freelancer’s name, email address, phone number, mailing address, as well as other information like the freelancer’s website. We also recommend keeping a record of the freelancer’s skills (for potential future projects) and any supplied work examples or references.

In Liquid, you can easily invite new vendors/freelancers to join and set up their profiles with all their contact details.

2. Independent Contractor Agreement

You should always have a fully-executed Independent Contractor Agreement. This agreement is also referred to as a Freelance Contract Agreement, Master Services Agreement (MSA), or Service Level Agreement (SLA). This agreement is a contract between the freelancer/contractor and the employer that defines the relationship’s legal terms.

Liquid users can either utilize our Independent Contractor Agreement template or their own custom agreements. Once you have a contract in place with a freelancer, these terms will cover future work for the agreement’s duration, saving you time when starting future projects – legal terms only need to be negotiated one-time. 

Download the free eBook: Best Practices for Vendor and Freelancer Admin and Compliance to turbo-charge your vendor relationships while staying in tax and legal compliance.

3. Non-Disclosure Agreement (NDA)

We always recommend executing an NDA with your freelancers, contractors, consultants, and vendors. NDAs help to protect the security and confidentiality of any information shared and the project work. To simplify executing NDAs, companies typically use a template that they customize with a summary of the relevant information or project work that is to be protected. However, completing an NDA is an optional step, and you may decide that the nature of the work doesn’t warrant signing an NDA.

With Liquid, companies can quickly execute Non-Disclosure Agreements using either our template or their own custom NDA template.

4. W-9 Form

You must have a W-9 form for every freelancer and independent contractor/consultant that you engage. The W-9 form is used to ensure that companies have the correct information for tax filing with the IRS. While companies do not need to pay payroll taxes for freelancers, they must file 1099-NEC forms to report income for each freelancer who the company has paid $600 (as of 2019) or more in a given year. Failing to collect the W-9 and issue the 1099-NEC will result in the IRS assessing penalties on your company.

When using Liquid, W-9 forms are requested as part of the onboarding process and securely stored online. This makes generating 1099s easy for your accounting department.

Note that if you are working with international freelancers, you’ll need to collect an IRS W-8 form instead. Liquid also supports requesting W-8 forms from your foreign vendors and international freelancers.

Paying freelancers and vendors?

Our customers report that using Liquid allows them to put off hiring an Operations Manager and/or Bookkeeper.

5. Work Order (WO) or Statement of Work (SOW)

The Work Order defines each engagement’s details, specifying the project deliverables, how and where provided, and how completion is measured. Each WO / SOW should indicate which Independent Contractor Agreement / MSA / SLA governs it for the legal terms.

Liquid users can set up Work Orders in minutes, including all the task details, project dates, and rate information.

6. Payment Details

Collecting the necessary financial information from a freelancer upfront simplifies and streamlines work for your accounting department and helps to avoid payment issues when a project is complete. Liquid makes it easy to securely pay both US and international freelancers via ACH, credit cards, and bank wire transfers, with payments received within 2-3 days. Plus you can choose whether to pay right away or schedule the payment for a future date.

5 key benefits of smart, automated onboarding

If you are managing freelancer and contractor onboarding manually, the process quickly becomes cumbersome and time-consuming as you increase the number of freelancers and projects. By using a Freelance Management System (FMS) like Liquid, you can streamline your onboarding process and have projects up and running in minutes. You can quickly and simply set up an onboarding workflow for your company, leveraging our standard ‘quick start’ workflow and then customizing as needed for your company’s needs.

vendor payment management system

Save time and money

Standardizing and automating your onboarding process can save you significant time on a repetitive, administrative task. Jing Gao of Fly by Jing started saving dozens of hours each month after switching to Liquid’s automated workflow.

And smart onboarding not only saves the hiring manager time. It also dramatically simplifies and streamlines work for your accounting department when paying invoices, completing monthly reconciliations, or filing taxes. Liquid makes reviewing and approving invoices even easier with our invoice approval workflow and rules, including invoice to work order matching logic that flags potential issues with invoices. This logic helps you avoid double payment and overpayment.

Stay compliant

With an automated workflow, you can ensure that all the critical steps and documents are completed for every contractor, helping your company address the behavioral, financial, and relationship control factors that determine whether you are hiring a W-2 employee or a 1099 independent contractor.

Lori Shao, CEO of Finli, relies on Liquid to quickly assemble contracts, W-9s, and other critical documentation to onboard new workers.

Reduce errors

There’s more room for error with any manual, ad hoc process, including missing information or documents. If your company works with 10 or more freelancers, a manual process has high risks of error, and it’s time to consider an automated workflow.

Joe Vezzani, CEO of LunarCRUSH, says that using Liquid’s standardized onboarding workflow with the company’s global liquid workforce keeps everything organized and free from human error. He says that “Liquid helps me, onboard new contractors, with everything from payment to legal paperwork with just a couple clicks. It allows us to bring people on fast and to keep track of all our contractors and vendors in one place.”

Simplify project management

Using an online, automated onboarding process ensures that all the project documents are at your fingertips, easily accessed whenever needed. Liquid’s Work Order template breaks projects down into sub-tasks, simplifying communication with the freelancer and making it easier to track project status. Plus, you can easily replicate the project details for similar projects, making it even faster to start the next project.

Improve freelancer relationships

Automating your onboarding process not only helps your company but also saves your freelancers time – making it easy to start projects quickly. Plus, all the documents can be readily accessed by the contractors, and they can update their profile or other details at any time online. And with payment details already collected and verified, you are less likely to have issues with missing or late payments to your freelancers.

All these elements make your company easier to work with and improve your relationships with your freelancers, increasing the likelihood that the freelancer will want to take on future projects with your company.

Start onboarding freelancers and contractors in minutes

Just as you have a standardized, automated onboarding workflow for your employees, you should have one for your freelancers and contractors. However, your freelancer onboarding workflow requirements are very different from those in HR management and payroll systems. Those systems are not designed for handling contractor documents, multiple payment structures, or freelance engagements.

Liquid’s intuitive and simple onboarding workflow is easy to use whether you follow the standard workflow or completely customize it for your needs. Our smart, automated onboarding workflow is just one of the many features that make Liquid the fastest and easiest way to contract and pay your remote workforce.

Ready to switch to smart, automated freelancer onboarding? Try Liquid today.



5 min read

Five Benefits of Smart, Automated Onboarding for Freelancers

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