In the Gig Economy, workers are often paid late for their services. And it creates several problems for them, including cash flow problems and difficulty paying bills on time.
This article will explore ways to solve late payments in the Gig Economy.
We will explore:
- why workers in The Gig Economy are so frequently paid late
- the effects it has on both parties involved and
- what can be done to solve these problems
Why Are Workers In The Gig Economy Paid Late?
Gig workers receive later payment for several issues, including:
- Inefficient invoicing and billing works
- Little transparency on how much is owed and why
- Difficulty in collaborating with business owners
- Slow payment Processing
Inefficient Invoicing and Billing Works
In the first place, many business owners do not understand their financial needs.
For example, a worker can have an hourly rate that is too low to cover their expenses. Still, they earn less than minimum wage when they bill in per minute increments.
Similarly, business owners may not understand the importance of paying workers on time and having a payment plan.
Perhaps someone has to wait for a paycheck before they can afford an expense such as rent or car insurance, but this is lost on the client who only sees a bill.
In addition, there is no good way for clients to track how much they owe on an ongoing basis.
Since workers are paid per gig, it can be challenging to determine if the client has overpaid or underpaid.
Little Transparency Of How Much Is Owed and Why
In business, it is common to have a contract with terms.
Workers in the Gig Economy are seldom contracted. They, therefore, do not always have these written terms that guarantee payment for work performed or time worked.
However, workers in the Gig Economy do have their expectations for how they will be paid, which may differ from what business owners are accustomed to.
For example, if a worker has to buy supplies for the job, they expect to be reimbursed.
Since this is not always done, workers are unsure what they should expect from their clients.
Difficulty In Collaborating With Business Owners
Since contractors are independent business owners themselves at times, there can be a great deal of distrust between them.
Business owners are wary that contractors are trying to get ideas for their own business or steal clients. In contrast, contractors are wary of being scammed.
Business owners do not always want to share information with their competition, and contractors feel they cannot trust business owners. These feelings can result in late payments since there is little communication between the parties involved.
Slow Payment Processing
Most gig workers are often paid via processors like PayPal.
This is problematic for several reasons, such as workers’ inability to access their money until the business owner releases payment. Sometimes, the software process is too slow.
In addition, business owners often complain that automated payment processing can be too slow and even result in late fees. This can be frustrating to both parties involved in the payment process.
What Can Be Done To Solve Late Payments?
In addition to the issues mentioned above, let’s look at a solution to each.
Create an efficient invoicing and billing system
One way to solve the problem of late payment in the gig economy is to create an efficient invoicing and billing system. This can be done by:
– Ensuring that invoices are easy to understand and include all of the necessary information, such as the service provided, the date it was delivered, and the rate per hour
-Making it clear when payments are due and what will happen if they are not paid on time
-Implementing a system for tracking hours worked and payments received so that both parties have a clear understanding of how much money is owed and when it is owed
-Using a payment processor that is fast and easy to use for both parties involved
Create a flexible payment plan
There is no good way for clients to learn how much they owe and when it is due in the current system. In addition, there is no easy way for workers to get paid on time.
Improving how work is paid for in the Gig Economy requires a flexible payment plan. This can be done by:
-Setting up a payment plan that is easy for clients and contractors to use and understand.
-Offering flexibility in the way clients pay so they can make their payments more manageable, such as monthly invoices instead of weekly ones.
-Using fast, automated payment processing
Build Trust and Collaboration Between Employers and Contractors
Creating a sense of trust between employers and contractors will help with the problem of late payment in the Gig Economy. To do this, it is essential to:
-Increase transparency by sharing all client information with workers
-Share client information with independent business owners so that they can increase their success without taking clients from others
-Encourage communication between both parties, so they feel like there is a partnership and work together to produce results.
-Set up clear guidelines for pricing and how clients will be billed
Upgrade to a Better Payment Processor
Using a payment processor that is both fast and efficient for all parties involved is another way to alleviate the late payment problem.
This can be done by:
-Ensuring that clients’ money does not sit with the processor until it’s released, as this can increase the chance of fees being charged due to processing issues
-Ensuring that workers can access their money ASAP, without having to wait a long time for the business owner to release it
-Using a payment processor that can be accessed easily and quickly by both employers and contractors
How Can Berkeley Help Businesses And Contractors With Late Payments?
We believe that everyone should be paid on time and fairly at Berkeley. This is why we partner with hundreds of thousands of independent business owners to make their payment experience as easy and efficient as possible.
Our technology allows contractors to manage payments from one easy dashboard to see what they are owed and when it is due and get paid quickly and easily.
We want all of our clients to get paid on time and for their payments to be handled fairly and with transparency, which is why we offer a range of payment processing services that can help. Our flexible invoicing software enables businesses to create professional-looking invoices in just minutes so they can start billing their clients immediately.
We also offer a variety of payment solutions so businesses can find a plan that matches their needs and allows them to get paid conveniently, no matter the size of their business.
Please contact us today for more information on how we can help your clients and workers with our innovative B2B software for invoice management, invoicing, work tracking, and payroll.