The best part about remote working is the flexibility and the excitement of working with diverse global teams and technologies. But there is also the boring stuff like invoicing, payments, and financial accounting that is important to get the right payment for your work. We know, as a developer, all you want to do is code and would love to have such payment-related tasks automated. While it may take some initial effort to set up the right payment framework, once you have correctly set it up, you can keep going on with little worries about getting paid every month. Let us show you how.
Getting paid for your remote work usually consists of two processes, invoicing and payment. The first step is to create an invoice that lists the type of work and hours spent working. The employer will then calculate the billable hours from your invoice and make the payment accordingly. With every payment, it should be made sure that all legal compliances are met according to your local laws and that the taxes are properly filed. Here is a simple guide on setting up the necessary tools and set up required to smoothen the payment process every month.
Every independent contractor will be tasked with tracking their work hours as that is how they are usually paid for their services. You should send in a monthly invoice report detailing the type of work done, the work hours/days or months spent on the job as stipulated under your work contract payment terms.
Several tools can help you easily keep track of your work and send accurate invoice reports. One tool that works well is Invoicely. Here is a list of some popular invoice tools you can check out to automate invoice reporting.
Whatever tool you choose to use, make sure you add all possible details into your invoice reports. Your invoices must be clear and concise, giving accurate information. Oftentimes, late payments are the result of missing data or incorrect details provided in invoices.
Also, check whether the employer is using any billing platform to manage their payments. If so, you will have to make an account with the same and learn to use those platforms. Some popular billing platforms include Deel, Remote.com. Bill.com, SAP Concur, Invoiced, Nvoicepay, Tipalti, and more.
You can also get acquainted with payroll systems like Bitwage, Paylocity, Paychex Flex, and similar platforms that offer employee payroll management and are used by many companies to consolidate salary payments. Make sure you keep clean accounts and do review your invoice systems at least every quarter to make sure you are paid properly.
While bank transfers are the most commonly used payment method, they may not be feasible at all times if you work in an overseas remote location. The easiest way is still setting up a bank account or at least a pseudo bank account in your employer’s home country to get the payments wired directly into your account.
Several alternatives allow money transfers both overseas and local such as:
These platforms provide payment services linked to your bank account and receive money transfers with ease. Talk to your employer and choose the method that best fits your needs, considering the transfer charges, exchange rates, added benefits, currency supports, ease of use, speed of transfer, and more. Choose a payment method approved in both countries and is the most convenient for both you and your employer.
A major part of payment compliance with remote working is dealing with taxes and relevant tax documentation. Make sure you stay risk-free with the right tax documentation that applies to the local laws of the company you work for.
For instance, if you are working for a US company, you will have to fill some forms to make your contract fully compliant. Forms like W-8BEN or W-8BEN-E must be appropriately issued, filled up, and submitted to inform the US government that a contractor outside of the US is doing the work. The W8BEN form is used when you are an individual contractor, and the W8BEN-E is used when you are representing your own business.
Try to set up all the necessities such as your invoicing software, payroll account set up, and payment methods well before you commence your work. This gives you clarity on the work terms and contract drafts and helps you proceed with the work and the subsequent payments in a smooth manner. Look into tools and platforms that can automate much of the tasks involved with getting paid.
Platforms like Upwork provide an all in all service that combines invoicing and payments in one place. Eliminate any tax risks and penalties by adequately investigating the legal compliances required and defining the terms properly in your work contract. While proper caution and research may seem like a hassle initially, it is necessary to ensure proper payments without friction in the long term.
So, what are your views on this? How do you manage your payments while working remotely? Let us know in the comments below. For more such exciting insights and easy access to the hottest job opportunities in the software development industry, stay tuned.