As a small or medium-sized business (SMB), working with freelancers can offer much-needed flexibility and specialized expertise. From filling skill gaps to managing one-off projects, freelancers have become an essential resource for many companies trying to stay competitive. In fact, 36% of the global workforce is freelancing, which provides SMBs with the agility and speed to adapt to changing market demands.
But while hiring freelancers may seem straightforward, the process of paying them—especially across borders—often comes with hidden costs and inefficiencies that can surprise even the most seasoned business owners. From platform fees to complex international transactions, managing freelance payments can be both time-consuming and costly. So, how can SMBs navigate these challenges and optimize their freelance hiring process?
In this article, we’ll explore some of the most common pain points businesses face when paying freelancers and how to address them effectively.
Understanding the True Cost of Hiring Freelancers
Hiring freelancers may seem like an economical choice, especially compared to onboarding full-time employees. However, many SMBs soon discover that the total cost of freelance work goes beyond the agreed-upon rate.
One of the largest hidden expenses comes in the form of platform fees. Freelance marketplaces such as Fiverr and Upwork charge client fees up to 20% of the total project cost. For businesses operating with tight budgets, these additional fees can significantly reduce the cost-effectiveness of hiring freelance talent. What started as an affordable project may end up costing more than anticipated after these platform charges are included.
Additionally, businesses hiring freelancers across borders face even more challenges. International bank transfers can incur hefty fees and delays, while currency conversion rates can fluctuate unpredictably, further increasing costs. For SMBs managing multiple projects and freelancers, these hidden expenses can quickly add up, eating into the budget and reducing the value of the project.
Opting for Direct Contracts with Freelancers
How It Works: Instead of going through platforms like Upwork or Fiverr, where fees are high, SMBs can establish direct contracts on social media with freelancers.
Benefits: This removes the platform fees, which can save up to 20% per project. Additionally, SMBs can negotiate more flexible payment terms and avoid the rigidity of platform-based agreements.
Implementation: Freelance contracts and payment terms should be clearly documented, and both parties should agree on deliverables, timelines, and payment schedules to ensure transparency.
Finding the Right Balance: Speed vs. Security in Payments
Another challenge many SMBs face is balancing the need for fast, efficient payments with the importance of ensuring that work meets expectations before funds are released. On one hand, freelancers expect to be paid promptly once they complete a project, especially when they’ve met deadlines. On the other hand, businesses need to safeguard themselves from incomplete or unsatisfactory work.
This balancing act becomes more complicated when freelancers are located in different countries. For instance, sending payments across borders can introduce delays; traditional bank transfers often take multiple days to process, and each transfer is subject to differing regulations based on the countries involved. Exchange rate fluctuations can add further frustration—53% of freelancers working internationally report facing challenges with currency changes affecting their income, which can cause payment disputes and stress on both ends.
Using Digital Dollar Solutions to Power Global Payments
How It Works: Blockchain-based payment options like USDC can offer fast, cost-effective international payments with transparent records. In fact, a recent survey shows that 69% of freelancers who receive international payments view blockchain solutions as essential for timeliness and transparency.
Benefits: Blockchain solutions like USDC (a stablecoin pegged to the US dollar) not only cut processing time but also remove currency fluctuation risks. Over half of freelancers (54%) aware of cryptocurrency say they’d use USDC if it meant faster, dependable payments, showing that stablecoins are gaining trust for their speed and lower fees relative to traditional banking.
Invoicing Complexities in International Payments
For SMBs hiring freelancers from different countries, invoicing can present significant challenges, especially when it comes to cross-border payments. Many businesses encounter issues such as unclear invoicing formats, compliance with diverse international tax regulations, and discrepancies in currency conversions. These complications can lead to payment delays, disputes, and unexpected costs. Additionally, the lack of standardized invoicing practices across different jurisdictions can create confusion, making it difficult for SMBs to maintain accurate financial records.
The Solution: Utilize a Comprehensive Invoicing System
What It Does: Implementing an invoicing system that supports multi-currency transactions and complies with international invoicing standards can dramatically simplify the payment process. Such systems ensure that invoices are clear, consistent, and compliant with regional tax requirements (like VAT and GST). By leveraging technology that integrates blockchain solutions, businesses can streamline the invoicing process and enable faster payment settlements.
Client Benefit: With Sorbet, SMBs can issue invoices tailored for international transactions, minimizing errors and making the process clearer and simpler. Clients benefit from reduced compliance risks and unexpected currency fluctuation costs. This approach not only streamlines accounting and tax reporting but also strengthens relationships with freelancers by ensuring prompt, accurate payments. With Sorbet, SMBs can focus on growing their business and be confident in their efficient, streamlined payment processes.
Navigating Freelance Payments Made Easy
As more SMBs turn to freelancers to help meet their goals, the challenges of managing payments are becoming increasingly evident. The key to overcoming these hurdles lies in choosing the right tools that streamline the payment process, reduce costs, and offer security for both businesses and freelancers.
By exploring flexible, client-friendly payment solutions that offer transparency and low fees, SMBs can unlock the full potential of their freelance partnerships. Whether you're just beginning to work with freelancers or are looking to optimize your current processes, the right payment platform can make all the difference.
Sorbet is one such solution that addresses these pain points, giving SMBs the flexibility, security, and affordability they need to thrive in today’s fast-paced, digital economy.
A Game-Changer for SMBs: Introducing Sorbet
The traditional approach to hiring freelancers can lead to diminished returns due to high client fees and unfavorable payment terms. Furthermore, the challenge of balancing speedy payments with the security of work completed can create additional hurdles, especially when dealing with international transactions.
Sorbet emerges as a powerful solution for SMBs looking to transform their freelance payment processes. This innovative platform offers a global invoicing system that simplifies cross-border payments, allowing clients to pay freelancers in their preferred currency—whether traditional fiat or stablecoins like USDC. This flexibility helps SMBs avoid the high fees and inefficiencies commonly associated with traditional payment platforms.
What truly sets Sorbet apart is its remarkably low 2% client fee, which is significantly less than the fees charged by major freelance platforms. By minimizing these costs, you can allocate more resources directly toward project execution and innovation, maximizing the value of your investments.
In a world where agility and efficiency are key to success, don’t let outdated payment systems hinder your growth. Embrace the future with Sorbet and empower your SMB to thrive in a competitive landscape. With Sorbet, you're not just streamlining payments; you're unlocking new possibilities for your business.
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