If you have a business, you know you can’t do it all on your own. Even if you’re a one-man operation, you’re still going to have to reach out to third-party contractors for a wide variety of services that can include:
- Tax planning
- Legal advice
- IT support
With so many people to pay, it’s important to know exactly how you’re going to make sure they get the money they’ve earned. Lose less sleep wondering about your finances by following these tips that make paying third-party contractors easier and safer.
Choose a Way to Pay That You’re Both Comfortable With
You have to choose a method of payment that you’re comfortable with, but you also have to choose a method that the recipient is comfortable with. You may love the idea of sending a check, but your legal advisor may prefer a more timely method of payment.
You might decide PayPal works best for a domestic contractor, or you may discover that your Nicaraguan website designer prefers a money transfer service, like Remitly, because, “you can safely send money directly to your recipient’s bank account.” What matters is that you both decide the method that works best for you.
Pay with Credit
There are some great reasons for a business to use credit cards:
- They are convenient
- They can help your business build a credit history
- They can earn you some serious rewards
However, one of the most convincing reasons to base your payment on credit instead of debit is because using credit will provide you with many more protections. If someone gets a hold of your credit information and fraudulently racks up your debt, you have more options for getting the funds back. Credit card companies are also more likely to protect you against fraud and under- or undelivered projects.
The fact that not everyone can be trusted is a disappointing lesson to learn. You don’t want to learn it the hard way by discovering that the writer you paid upfront took off with your cash without providing you with content for your website.
Avoid this possibility by staggering your payments. Provide the contractor with a little money upfront to get started, which includes providing the necessary money to procure the resources that are needed to start the project. Then, only release the last payment after services have been rendered.
Never Pay Cash
Cash is great for a lot of things. It’s accepted by everyone, everywhere and it can keep your financial information safe, but it won’t leave you with a paper trail. Although there are plenty of pros and cons to paper trails, when it comes to business transactions, the pros outweigh the cons. Always provide payment in a way that can easily be traced to make sure your business is protected.
Finances aren’t the most exciting thing to think about, and talking about payment with third-party contractors isn’t the most exciting thing to do, but it’s important. With the tips on this list, you can protect yourself while ensuring your contractors get paid every penny they’ve earned.