Every small business owner eventually reaches a point where additional help is needed in order to keep things moving in the right direction. Onboarding staff, while an obvious solution, can be time consuming and expensive. Also, there is the explosion of the gig economy which may limit the number of available applicants seeking a job in your industry. Where does that leave you when filling a unique skill set has become critical? Maybe you need a POS system for contractors.
The influx of contract labor, once though the sole realm of the corporate world, has emerged as a viable labor source for small business owners as well. As the gig economy continues to gain momentum, it is becoming highly important that a small business owner takes a look at the benefits that can be achieved thanks to the onboarding of a specialized contractor. However, doing so brings along some process and regulatory concerns that may force you to take a look at how you currently manage your business.
Modern Labor Demands Require Innovative Tech in the Background
Introducing contract labor into your business requires some changes in how you currently manage staff. While you are probably well versed in processing payroll tasks for your employees, paying contractors may introduce new wrinkles that will require you to make some adjustments.
Before you can do this, though, there are a few questions that you will need to have answered so you can properly align yourself to make payments to your contractors and know what data you need for tax and internal financial purposes.
- Pay rates. Will the contractors you need be paid hourly, by the client, on a commission basis, or a mixture of any or all of these?
- Insurance. Will you be required to cover the activities of any contractors under your existing business or property insurance policies?
- Scheduling. How will schedules be determined?
- Tax concerns. Are you paying your contractors as W-2 employees, on a corp-to-corp basis, or as 1099 independent contractors?
Addressing this shortlist of contractor-related topics will give you better insights around what your record-keeping and payroll actions will look like, and whether or not your POS software may need to be improved to handle the expanded data points.
Independent Contractors Require Innovative Data Management to Ensure Accuracy
The use of independent contractors will arguably present you with the greatest degree of difficulty. As the way in which they are paid, as well as rates and types of compensation, can vary wildly, it is here that having capable technology at your fingertips will do the most good. Introducing a POS software solution that can manage the moving pieces that come with utilizing the services of a contractor within your business will save you a great amount of future effort.
The data you gather must be tied into your services across the board. The appropriate taxation information must be accurate and presented correctly, especially when you must send out W2’s or 1099 forms at the end of the year. Monitoring contractor expenditures on top of the pay rates, tax information, and scheduling data require that your POS system possesses the power to provide you with concise, easy to customize reporting almost instantly.
Monitoring These Key Data Points Eases the Way to Successful Contractor Engagements
When implementing POS functionalities to help drive your contractor initiatives forward, you must do so with a developed awareness around what data is really important. Although the contractors you seek will be dependent on the business sector you operate in, there are a handful of data points that are universal across all business types. Learning these allows you to make solid technology choices that reduce your risk of running afoul of the contractors you hire and the government.
- Individual line revenues. These numbers will give a clear picture of what revenues you contractors are actually producing. Not only may this directly affect payroll outlays, but it can be a crucial statistic when determining if the contractor is worth having onboard.
- Tip amounts. Primarily reserved for service-based contractors, tip amounts can be broken down further into tip rates, giving you another metric to show overall value to our brand. At a basic level, tracking tips is required for tax purposes, so the ability to perform this accurately is crucially important.
- Sales statistics. Typically a retail-based statistic, this has a purpose outside of retail in terms of upcharge items and knowing how many customers are being drawn into your business by any particular contractor. For those with contractors working on commission, this is a critical data point for payroll and tax purposes.
- Tracking schedules and hours worked. This is probably the most obvious of the data points presented here, but a surprising number of businesses still rely on contractors inputting hours instead of moving to an automated time tracking solution.
Enabling yourself to be proactive by ensuring that your business processes are able to handle and maintain required data for the hiring of contractors is the ideal scenario you must target. This greatly reduces the risks associated with underperforming contractors, tax implications, and maintaining a healthy financial status. The nuance involved in all of this does require an advanced level of business and technical expertise that you do not yet possess.
Letting an Expert Develop Your POS System for Contractor Management
Leveraging the skills of contractors will provide you with valuable assets that can be utilized to grow your business. The data variables that are required to successfully develop and maintain contractor relationships require you to add some muscle to your current POS solution. You must be able to create data points for a variety of contractor types, submit accurate payments in a timely manner, and provide your contractors with transparency to it all, preferably through an app.
Inviting a POS expert to help you make the right choices to effectively manage your contractor relationships is an important next step. They will help you get the solution you need for managing external resources. Features, such as allowing contractors to view their own confidential reports, will help drive your business forward and present a positive reputation to prospective contractors in your field.
Retaining an expert in emerging POS technologies and business trends is vital to achieving long-term success. The innovative POS solutions you will need to stay a step ahead of your competition are what talech is here to help you achieve. With a wide range of customizable features, such as flexible financial data reporting and asset scheduling, we strive to drive your business goals towards success. Reach out to us today to sign up for a demo and to learn more about how we can be your valued POS partner.
Want to learn more about emerging POS technologies?
Get your free Demo