Contractor management: Benefit from invoicing automation with Remote

Contractor payments rose 23% from 2020 to 2022, and the ratio of contractors per employee is now nearly 1 to 5. 

If you’re one of the many businesses that work with contractors or are a contractor yourself, you’ve probably experienced the pains of approving and processing invoices remotely. Today, Remote has made it a little easier.

While invoicing is a key part of being a contractor (and necessary to avoid misclassification pains), managing invoices isn’t easy. Doing so usually means tracking charges and payments in spreadsheets or using other software — spending precious time every month on administrative tasks just to get paid. 

For an HR or finance administrator, time spent managing invoices from multiple contractors at the same time can quickly add up, not to mention the time needed to make the actual payments.

Fortunately, Remote is here to help. With our new invoicing and automation capabilities in Remote Contractor Management, we take care of the paperwork so you can reclaim the time you previously spent on invoicing and approvals.

What is a contractor invoice?

A contractor invoice is an official billing document that an independent contractor issues to a client or company. It itemizes all the tasks completed or services provided and their corresponding fees, serving as both an official record of the completed work and a request for payment. 

A contractor invoice is important for several reasons. First, it maintains clarity and transparency between the contractor and the client, ensuring that both parties understand what the payment covers. It also helps with keeping accurate financial records, which is crucial for taxes and business management. Lastly, it ensures that billing is accurate and on time, preventing payment delays and misunderstandings.

What should a contractor invoice include?

A contractor invoice needs to have specific details to keep everything clear and legal. Here’s a checklist of what contractors should include in their invoices:

• Invoice number: Every invoice should have a unique number for easy tracking.

• Date: The date the invoice is issued.

• Contractor information: The contractor’s contact details to help the client identify who the invoice is from. Details include the following:

  • Full name

  • Business name (if applicable)

  • Address

  • Phone number

  • Email

  • Tax or business registration number, if needed

• Client information: Contact details of the person or business paying for the contractor’s services to ensure the invoice reaches the right person. Details include the following:

  • Name of the individual or business receiving the services

  • Contact person

  • Address

  • Email and phone number

  • Client ID or account number

• Description of services: A detailed breakdown of the work performed or services provided.

• Quantity and rate: The amount of work done and the charge per unit.

• Total amount due: The overall sum the client owes, tallied from the quantity and rate.

• Payment terms: The invoice should clearly state when the payment is due and the accepted payment methods to make the transaction as smooth as possible.

Common challenges with contractor invoices (and how Remote addresses them)

Contractor invoices present several common challenges. Here’s a list of some of these challenges, along with potential solutions:

Delayed payments

Delayed payments are a common hurdle in the process of invoicing with contractors. Delays can occur due to numerous reasons, such as a lack of reminders, slow manual payment processing, or the simple negligence of the payer. These delays can affect businesses’ cash flows, causing potential financial stress.

Remote offers automated reminders and a secure online payment gateway to address this issue. It ensures independent contractors are paid accurately and on time by reminding clients about upcoming payments and providing an easy and quick method to process those payments.

Disputes over charges

Misunderstandings or disagreements over the cost of services or materials caused by unclear invoices, lack of a detailed breakdown, or differences in expectation versus delivery can lead to disputes, complicating the invoicing process.

To tackle this, Remote ensures that all invoices are transparent and include a detailed breakdown of charges. This leaves no room for misunderstandings, minimizing disputes and ensuring a smooth transaction process.

Lost or misplaced invoices

Losing an invoice isn’t uncommon when using a traditional, paper-based invoicing system. Invoices can get buried under piles of paperwork, misplaced, or even lost during transit if being delivered by mail. 

If a client loses an invoice, they might forget to pay it, leading to awkward follow-ups and potential strains in the business relationship. On the other hand, if a contractor misplaces an invoice, it becomes challenging to keep track of payments due and received.

In the age of digitization, the solution to this problem is switching to an electronic invoicing system like Remote. With Remote, all invoices are created, sent, and stored digitally so that all data is securely stored in one place. Its intuitive platform is easily searchable, allowing you to retrieve invoices instantly. Whether you need to look up an invoice from a few weeks or several years ago, all it takes is a few clicks.

Errors in invoicing

From minor mistakes, like incorrect dates, to major ones, like wrong amounts or incorrect client information, invoice errors are a common but potentially serious issue. These issues are often due to manual data entry, oversight, or a lack of understanding of the invoicing process, and they can lead to payment delays, disputes, and damage to business relationships. 

Manually creating professional invoices leaves plenty of room for human error. What’s more, it can be a time-consuming and inefficient process. Checking and double-checking every detail on an invoice to ensure its accuracy is not only tedious but also takes up valuable time.

Remote eliminates the need for manual data entry by automating the invoicing process. Our solution offers features like pre-set contractor invoice templates and auto-calculation, which removes the chances of error. It also performs automatic checks to detect discrepancies in invoices before they are sent out.

Lack of legal and tax knowledge

Invoices are not just requests for payment; they are also legal documents that need to comply with various regulations and requirements. However, contractors — and even some businesses — may not have a comprehensive understanding of legal and tax implications related to invoicing. This lack of knowledge can lead to errors, disputes, or even legal complications.

When it comes to tax, Remote can automatically calculate and apply the appropriate tax rates based on the specifics of the transaction. It can also generate tax reports, making it easier to file tax returns and maintain accurate records.

Remote’s Contractor Management platform has built-in features to handle legal and tax aspects related to invoicing. It provides guidelines about the information contractors should include in their invoices to ensure legal compliance. Our software is regularly updated to keep up with changes in regulations, ensuring invoices are always compliant.

What is invoicing automation?

There are better things to do with your time than creating or handling contractor invoices. And that’s why we’ve been working to solve key challenges contractors and employers face on payments and approvals.

In-app invoicing

One of the most common jobs for contractors is to issue an invoice using spreadsheets or word processing software before downloading it as a PDF and uploading it into Remote.

Contractors can now create invoices inside Remote before submitting them directly for approval.

By sharing just a few pieces of information, like a description of the services provided, the payment amount, and the bank account for payment, an invoice is automatically generated and made available to preview. From there, contractors can save and submit invoices with one click.

Automated invoicing

When contractors work with an employer on an ongoing basis or on a fixed-term contract, they still need to submit regular invoices. While the invoice content might not change, remembering when to invoice is still a hassle. That hassle can sometimes lead to missed payment deadlines, inconveniencing everyone involved.

Contractors can now create automatic recurring invoices inside Remote.

Within seconds, contractors can set up recurring invoices. These are automatically issued to the employer on a customizable frequency. So whether you invoice clients once a week or once a month, you’ll always be on top of your invoicing schedule.

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 Automated employer approvals

As an HR professional, finance administrator, or even CEO, approving invoices can become a tedious task, no matter how many contractors you manage. At best, it can take a few minutes; at worst, it can take hours and lead to late payments, damaging relationships with your contractors.

Employers can now automatically approve recurring contractor invoices.

We have made it easy for employers to approve recurring invoices automatically. Perfect when working with long-term contractors, it now takes just one click to approve invoices remotely on an ongoing basis.

Payment requests are automatically generated, so you know exactly how much you’ll be paying out. As usual, submit a single payment, and we’ll distribute the right amounts to every approved invoice.

Frequently asked questions

We’re happy to answer all your questions related to contractor management and invoicing.

How do I write a contractor’s invoice?

Start by including your details, like your name and contact information, followed by your client’s details. Next, add a unique invoice number and the date. List each service provided along with its rate, and then calculate the total amount due. Finally, mention the due date for payment and your preferred payment method. Remote’s Contractor Management services make this process faster and more efficient.

Do I need an invoice from a contractor?

Yes, you need an invoice from a contractor. It serves as an official record of the services provided and the agreed-upon cost, which is crucial for tracking expenses, financial reporting, and tax filing purposes.

What are the requirements for an invoice?

The basic requirements for an invoice include the supplier’s and customer’s information (names, addresses, and contact details), a unique invoice number for tracking, the date of issue, a description of the goods or services provided, the total amount due, and tax details, if applicable. Always ensure to check local regulations, as invoice requirements can vary by location.

Can contractors still submit invoices created outside of Remote?

Yes. Contractors can still use invoices they’ve created in other software and upload them into Remote for approval and payment. However, they won’t be able to create recurring invoices or make those invoices available for automatic approval.

Can recurring invoices be edited?

Yes. Contractors can edit recurring invoices before the next invoice is issued. If a contractor needs to amend their invoice details, they must delete the issued invoice and start again.

Are payments automatic too?

No. Approved invoices are added to an upcoming payment request, which will need to be paid by ACH, SEPA, or SWIFT wire transfers. We’re looking at ways to automate these where possible and legal to do so.

Get started managing contractors with Remote

From helping companies onboard and pay contractors around the world to reducing manual effort and staying compliant with international law, Remote Contractor Management makes it easy to pay and manage your global team.

Get started for free today to see how Remote can help you manage and pay contractors at home and abroad. Remote makes creating and managing payments and invoices easy with a single click. We offer a variety of payment methods in more than 100 currencies.

Experience a simpler solution for handling contractor invoices. Start your free trial with Remote today.

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