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Updated: Sep 5, 2022

The benefits of using freelance management systems like Liquid.

Using freelancers is a great way to acquire skills for a specific project — a very cost-effective way to resource highly specialized talent. However, as your company increases the number of freelancers it engages, so does your need for a robust, integrated, and flexible system for managing them.

In the past decade, there’s been a boom in freelancers, contractors, non-permanent workers, and all other contingent workers who make up the liquid workforce (otherwise known as the gig economy). Managing your liquid workforce is a complex task, and many businesses use inefficient practices that waste both time and money.

A freelance management system (FMS) can make this complex process simple and efficient.

What is a Freelance Management System (FMS)?

The process of sourcing, onboarding, managing, and paying freelancers is vastly different than the traditional HR processes for employees. Having proper processes in place is crucial for compliance with the regulations associated with freelancers. An FMS is a cloud-based software solution that enables companies to efficiently manage their freelance and contingent workforce.

Freelance management systems like Liquid are a one-stop shop for onboarding, communications, project and task assignments, SOWs, invoicing, payments, and much more.

Why do I need a Freelance Management System (FMS)?

Analysts estimate that nearly 60% of contract spending goes unaccounted for in financial planning, forecasting, and budgeting within the average company. Fortunately, freelance management systems (FMS) like Liquid empower finance, HR, legal, and business executives with the tools and insights needed to:

  1. Onboard & organize contractors into groups based on services offered, skills, location, experience level, etc.

  2. Enforce compliance rules to ensure compliance with federal, state, and local regulations

  3. Track and report on all facets (costs, coverage, compliance) of your 1099 workforce

  4. Forecast your contract expenditures for accurate financial planning and budgeting

Let’s go into these advantages in more detail.

Simple and Efficient Onboarding

An FMS centralizes the onboarding process to ensure that all freelancers and vendors go through the required security and compliance steps. You’ll no longer have to sit down with each freelancer to sign non-disclosure agreements, W-9 forms, independent contractor agreements, etc. Liquid allows you to set up standardized onboarding processes — making the onboarding process repeatable and consistent. In Liquid, you can create multiple onboarding processes — different ones for different types of freelancers or vendors. For example, different departments within your company may have their own onboarding processes for their preferred freelancers.

Moreover, freelancers often have few touchpoints with your company, making it easy for them to slip through your onboarding process if you don’t have controls in place — creating potential security or intellectual property risks. Liquid has templates for independent contractor agreements and non-disclosure agreements (NDA) ready to use.

Independent Contractor Compliance

Reports have shown that 10-20% of independent contractors are misclassified. Liquid enhances your ability to stay compliant with independent contractor regulations. From encouraging contractors to use an EIN (Employer Identification Number / Federal Tax ID), versus an individual’s personal and private social security number) to effortlessly agree to project SOWs with your freelancers, Liquid has many features that make it more evident that you are using a 1099 worker (versus someone you should be hiring as a W2 employee).

SOW Creation

You are likely hiring many different freelancers and vendors to complete a variety of tasks against many different timelines. Clear SOWs (Statements of Work or Scopes of Work) clarify the terms of each engagement. With Liquid, you’ll create SOWs in minutes instead of hours.

Project Management

A big part of the freelance management process is keeping projects on track. Your freelance management system should have project management features for making assignments, establishing milestones and deadlines, and monitoring progress towards completion. Liquid gives you a clear overview of what’s been accomplished — allowing you to focus your attention where it’s needed. Your project dashboard shows all active and completed projects, providing a high-level view of all freelance engagements.

Paying Freelancers and Vendors?

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

Electronic File Management

Freelance management systems like Liquid create an electronic file cabinet for each freelancer/vendor and every project. The cloud storage and automated filing system stores documents so they are accessible at a moment’s notice.

Simplified Payments

Manually paying many new or one-off invoices can be burdensome for your finance team. Freelance management systems offer freelancers a seamless platform for submitting invoices, simplifying your payment approval process. This allows companies to send funds quickly. Liquid takes this a step further and automatically creates invoices for freelancers/vendors and sends reminders to freelancers to invoice their clients according to SOW terms.

Advanced Budgeting and Forecasting

Most companies split freelancer and service vendor management across multiple procurement, HR, finance, legal, and other departments — making it nearly impossible to track your company’s spending accurately. A freelance management system like Liquid gives you a company-wide view. In Liquid, this company-level view empowers you to track precisely how much you are spending and on what. More importantly, you can quickly see both your total spend and contracted spend.

Better Decision Making and Increase Contract Efficiency —Liquid Saves You Money

A freelance management system can give you valuable insight into how your freelancers are performing and about your company processes. These insights enable your company to manage contractors more efficiently and save money. Liquid automatically flags invoices that don’t match an active SOW. With this information in hand, you are better equipped to quickly make decisions — decisions like ending contract engagements with freelancers who log too many hours or who consistently deliver projects late. Ultimately, these insights can lead to improved decision-making on how to resource projects.

Gain Visibility into Contracts and Freelancers

A freelance management system gives you visibility over all the freelancers and service vendors within your company’s network. Liquid gives you a searchable database of all your freelancers, along with critical information such as their onboarding documentation, compliance documentation, project history, rates, and much more. Being able to call upon an approved cohort of onboarded freelancers allows you to kick off projects within minutes.

Automations and Integrations

A freelance management system will save you time by automating processes and workflows. Liquid integrates into Quickbooks, simplifying your accounting workflow. Expect more integrations from Liquid soon!


A freelance management system turns your tedious freelancer processes into automated processes and workflows. Liquid turns the process of freelance management into a scalable method for activating the liquid workforce!

Who uses the Freelance Management System (FMS)?

A fully-loaded FMS is not just a tool for managers — it’s for many departments and everyone on your team.

  1. Management can build a database of approved freelancers and vendors, simplify workflows, and track growth and spend. 

  2. Operations can manage SOWs and projects while tracking timelines, milestones, and deliverables. 

  3. Accounting can get W9s upfront, simplify payments, and send out 1099s

  4. CFOs and other finance executives can view expenditures and plan for freelancer / vendor contract spending in forecasting and budgeting.

  5. HR can quickly create new onboarding processes and get contracts and other paperwork quickly signed and filed. 

  6. Legal can monitor contracts and NDAs and easily enforce company-wide templates. 

  7. And your everyday manager who is in the trenches with freelancers can quickly get projects started, knowing all the appropriate approvals and contracts are already in place.

Freelance management systems aren’t just for startups, small businesses, mom-and-pop shops, or remote teams. Large, traditional enterprises are also seeing the benefits. With an FMS like Liquid, you can get started with smarter freelance management in minutes.


Note, we are not providing legal, tax, or payroll advice. Please consult your legal, tax, and payroll professionals. These are simply to serve as guidelines based on our own experiences.



5 min read

What is a Freelance Management System (FMS)? And Why Do You Need an FMS?

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