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10 Tips For Freelancers To Organize Their Finances

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finance tips for freelancersOne of the great things about being a freelancer is the ability to manage your time the way that fits your lifestyle outside the daily 9-5 routine.

One of the not-so-great things is the lack of financial security — what happens when one project winds down and you haven’t booked your next project.

Here are some tips to organize your finances to help you weather periods of uncertainty.

1. Do Your Taxes

“If you’re earning more than $600 per year as a freelancer, you have to report all of your income to the IRS,” explains Sabah Karimi, author of Financial Fitness for Freelancers: How to Survive and Thrive on an Irregular Income. “Avoid paying an underpayment penalty by making quarterly tax payments on time.”

Most tax preparation software programs can estimate your quarterly payments based on previous yearly income. You can also download estimated tax paperwork directly from the IRS.

The reason why you want to do your taxes is twofold. First, it is the law. Going to jail has other costs than avoiding your share of taxes. Second, reporting your income will be applied to your social security benefits when you’re old.

2. Fund a “Rainy Day” Reserve

Things might be going great in getting work, but don’t assume the good times will always continue to roll. Like with any business, there are down cycles. To prepare for them, always invest a portion of your earnings to cover expenses when you’re between assignments. Remember the Aesop fable about the “Ant and the Grasshopper”: Save for the days of necessity.

3. Don’t Overload Your Credit Cards

It’s tempting to rely on your credit card for cash when you need it. We’ve all heard stories about entrepreneurs who’ve maxed out their credit cards right before they made it big. Problem is, there are plenty more stories of people who maxed out their credit cards, didn’t hit it big, and now don’t have any way to “unmax” those cards. General rule of thumb: If your checking accountcan’t cover the monthly expenses you’re charging to your credit card, you need to cut back on your expenses.

4. Keep Small, Regular Expenses in Check

Every coffee shop with free Wi-Fi is chock full of freelancers. Most feel a little guilty about freeloading — especially if it’s an independently owned shop! — and figure they should buy something. All that coffee and pastry sure is tempting, and adds up. As MoneyWatch writer Farnoosh Torabi points out, “I figure each visit to the ‘bux costs me north of $7 or $8… A couple days of this per week and the expense can certainly add up.”

Consider that you can get a reasonably fast DSL at home for about $50 a month, probably less than what you’d pay making a daily visit to the coffee shop. If you can’t work from home for some reason, most public libraries may not have a barista, but do offer free Wi-Fi.

5. Set a Budget and Stick to It

“Because your income is irregular, you will need to determine an approximate monthly income to use for your budget,” notes Dona Collins, freelance writer and IT specialist. ”Total up your previous year’s income and divide that amount by twelve, then use that figure as a measure of what you can and cannot afford.”

You may find it helpful, and motivating, to figure out the costs of your daily overhead. Add up all your average living expenses and divide by 30 days for the month. That’s your daily nut.

6. Get Organized

You are your business, so you need to organize yourself like a business. “The most important part of your organization dictum is making sure you keep track of your receipts… [T]his will help you if your get audited, but it will also help you keep track of things you can write off of your taxes,” advises Genevieve Coates, blogger at She Writes.

Organization affects everything. Create a workable system that gives you easy access to client files, invoices, bills, and other important information. Get organized and save yourself time… and time is money.

7. Embrace a Frugal Lifestyle

When the jobs are rolling in and revenues are high, it’s tempting to enjoy the fruits of your labor. It would be nice to think this will always be the case. Problem is, it typically isn’t. One way to ride out the slow periods and still pay your bills, says Yuwanda Black, blogger at Inkwell Editorial, is to “[...] learn how to live frugally; embrace it as a lifestyle (not just something your do when you first start out or when things are slow). If you do this, you’ll be able to set aside enough to always cover your bills as a freelancer.”

8. Maintain Separate Personal and Business Bank Accounts

For tax reasons, you’ll need to keep separate accounts. Deposit client checks into your business account and then pay yourself into your personal account. This is important because mixing money can get you into trouble.

Lisa Drake, CPA, advises:

“[E]stablish a separate bank account for your business. Dedicating a credit card to only business transactions is a great idea as well. There’s nothing worse than having to separate out transactions at the end of the year to figure out whether you’ve made money or not. It’s cleaner this way (trust me).”

9. Save for Retirement

Unless you want to work forever (and even if you do), set up a retirement account and make regular contributions. Kirk Shinkle, Money writer for U.S. News & World Report, says:

“There are [...] plenty of options for go-it-alone types who are looking to keep their savings on track, including a variety of individual retirement accounts, 401(k) plans, and even a version of that corporate stalwart — the pension. With a little research, there’s no reason the freelance life can’t conclude with a well-earned retirement.”

Women freelancers are especially advised to save for retirement. That is because women statistically live longer than men, are paid less, and have greater expenses raising children. In fact, women are twice as likely to live in poverty during retirement than men, reports Amy Tennery at TIME. Small amounts saved and invested today add up.

10. Don’t Be Proud, Get a Job

If freelance work is getting sparse, consider taking on a regular job and freelance on the side until more work comes your way. If that seems counterproductive to what you set out to do as a freelancer, consider that it’s also counterproductive to have a negative balance in your checkbook and risk losing your housing. You can always quit the day job once the big freelance projects come in. There is no shame in working.

Share your own finance tips for freelancers in the comments section below.

How Can Freelancers Improve Client Loyalty?

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freelance customer loyaltyOne of the biggest challenges for any freelancer is attracting and retaining clients.  Most freelancers seem to be hamstrung by the fear that their clients will always be looking for a cheaper alternative to them.

However, by focusing on continuing to produce quality work, whatever their field, they would quickly find that clients are a lot more loyal and less price obsessed that they might have thought.

That said, there are a number of best practice pointers that a freelancer can use that will assist them in building up client loyalty. We looked at some of the best ideas, and at why they work.

Learn More About Your Customers’ Needs

You might be providing a particular product or service to a client, but do they have other requirements that you could perhaps help with? A client might not know that you are able to carry out such a service any more than you know they require it. Take it upon yourself to start the conversation.

Ask what they need, tell them more about what you do, and leave it to them to decide whether there is any correlation and potential for further work.

Make Their Life Easier

Everything you do as a freelancer, regardless of your field, should revolve around this point. What can you do to make your clients life as easy as possible? This might have something to do with the way you invoice for your services, or the ways in which you ask them to communicate feedback or place a request for work to be done.

Do What You Say You Will

There’s a silly line of thinking in the business world; you ought to under promise but over deliver. We understand this in some respects, but eventually you’re going to start losing business because you only set modest expectations.

Instead, be honest and clear around what you can achieve, and then set out to achieve it. Set the highest possible standards and deliver them consistently.

Be Personal In Your Contact

If you send out emails to your clients or interact with them on social media, ensure that you personalize what you’re saying in each one. A standard template email or response stands out like a sore thumb, and is a certain way to put people off working with you.

Something with the personal touch brings you closer to a client, and makes them feel better about whatever the reason was for contacting you.

Be Amazing On Your Bad Days

We all have days when things go wrong, and we end up doing a piece of work that isn’t as good as we’d like it to be, or we have an angry client on the phone asking us what went wrong.

Don’t waste energy trying to stop events such as these happening, as they always will.

However, ensure that you are set up to deliver excellent responses and resolutions to all of these eventualities. We’re always great on our good days, but it is how you deal with the bad ones that often makes the difference, especially in the eyes of your clients.

Building Client Loyalty

If you are able to master these points, you will start to find that you quickly become a regular ‘go to’ freelancer for all of your clients’ needs, and soon start to benefit from client referrals that will increase your revenue potential.

Share your own experiences about client loyalty in the comments section below.

Five Services To Outsource Locally

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flags of the world overlappingAs a business owner you may find at some points you will need to outsource work. Whether this is because the job is not something you can do yourself or your business is growing and you need to free up some time, outsourcing services is a great solution. There are many services you can outsource, and many you can outsource locally.

Choosing to use local companies is better all round than using companies overseas. Using local companies means you won’t have any language barriers and will be able to arrange face to face meetings to discuss the work being done. Here are five services to outsource locally:

Advertising And Marketing

A service that is widely outsourced is advertising and marketing. Rather than employ a full time in-house manager of marketing, choose to outsource and pay only for the time put in that you need. One of the best ways to market your business in the present day is through online marketing. Choose to outsource this locally and have peace of mind that your online marketing strategy is in the hands of a professional.

Payroll

Managing payroll is one of those tasks most business owners would rather avoid. Managing your own payroll takes time out of your busy schedule every month. Free up your time by choosing to outsource your payroll to a professional company. The only input you will need to have is contacting the company with your employee’s hours and rate and the rest is taken care of.

IT Support

IT support is an essential service to utilize for any company that relies on technology to function. Using IT support means if systems do fail you don’t have to lose precious time as your IT support team can ensure systems are fixed as quickly and efficiently as possible. It is especially beneficial to use a local IT support company as this means they can service and check your devices to ensure they are up to date and running properly.

Web design

Very few business owners would be able to create and build a fully functioning website. Your website is essential to your business as huge amounts of interest and sales are generated online. Choose to use a local web designer so you can discuss designs and tweaks to the site face to face.

Public Relations

Public relations is often managed in house, but it is a great service to outsource too. Depending on your industry there are specialised areas of public relations. Choosing a PR company that specialises in your industry means that you can be sure your PR is in the hands of a professional who knows the industry like the back of their hand.

Share your own experiences with local outsourcing in the comments section below.

Before You Outsource Writing…

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outsourcing writingIf you’re familiar with managing a website, a product or service of any kind then you’re likely to be aware of the vast amount of writing that needs to be done.

You’ll encounter instances when you need to write promotional material, press releases, reports, ebooks, guest articles and website content. This can be overwhelming!

For small and large businesses alike there’s a temptation to outsource writing much in the same way you’d outsource graphic design or programming.

Often the notion is that you can outsource to a less developed economy and expect good results.

Unfortunately though, outsourcing writing is an area fraught with stumbling blocks.

Issues with Outsourcing Writing

Expertise

Whilst a candidate may seem like they can write well, unless they have an existing in-depth knowledge of a subject, it’s going to take them a long time to study up. After all, they need to understand the area in which they are expected to write about. They may not know where to start and you mustn’t assume they will be capable of researching specialized topics.

Writing is not like programming and graphic design, which require very technical skill-sets that can be more easily shifted to new areas and ways of working.

Writer’s Block

If you’ve ever written an essay then you’ve probably experienced the phenomenon that writers have labelled “writer’s block.” Writer’s block is where a writer can’t find the words to write and is unable to get the words out; it’s a time when writers are not productive.

Writer’s block can affect deadlines, quality of work (the writer may just throw something together at the last minute) and if you’re paying by the hour can cause a price blowout.

Mother Tongue

One of the biggest pitfalls in outsourcing writing is the familiarity of a writer a given language.

Even though an outsourced writer from another country may be educated to a good level in English, there are certain words and phrases that you wouldn’t find a native speaker using. Additionally, there are technical differences in types of writing that someone educated in a native English speaking country is more likely to be aware of than those for whom English is a second language.

Many writers with non-English speaking countries believe their English is perfect because compared to the people they deal with every day, it is. As such they can often demand the same kind of money that you’d pay a native English speaker. As such, I would suggest that you go for the latter.

Persuasiveness

In the event that you’re hiring a writer to perform copywriting, a good native speaker is going to have a better command of influential language and a better understanding of what motivated your prospects than someone in another country.

Money

The figure of speech “you get what you pay for” is perhaps nowhere more apparent than when outsourcing writing. There are many that will write for rock bottom prices, however if your experiences are anything like mine then you will find that their writing often isn’t very good. Many cheaper writers struggle with making writing clear or useful because they are so busy trying to churn out words just to make ends meet.

It makes sense to pay a bit extra if you want content that will actually be read and appreciated, and not pay peanuts to freelance writers.

Adding Value

Many writers. rather than add value, tend to rewrite generic articles that are easily found elsewhere on the internet. These writers don’t particularly add any value; they don’t present a solution for a given problem and tend to add a lot of fluff. The end result is content that’s not very useful because people can easily find far better examples of the same type of content.

Solution: Have an objective in mind, and find the right writer to accomplish it

Outsourcing Platforms

We as work providers tend to rely on outsourcing platform feedback in order to understand an outsourced writer’s reputation and know where someone comes from as in order to help us with our selection.

On the more popular outsourcing networks such as Freelancer, Odesk and Elance there are many writers who go by English names as well as present their location as a country such as England, America and Australia when in fact they are based in an economy whose first language is not English.

You’ll also notice that in writer’s feedback they pick up a lot of work from non-English economies. The feedback on the quality of English writing from  work providers in these economies is not reliable because they don’t actually recognize good writing – they just had a need for some fast content and the writer provided it.

Solution: Use platforms that pre-judge the quality such as Constant Content.

Return on Investment

One of the reasons there is so much downward pressure on writing fees is that often as far as revenues go for a specific article, it’s difficult to measure the value added by a particular article. It’s difficult to gauge the value of an article before it’s written, published, and promoted.

Additionally, in terms of incoming Google traffic it can often be an all or nothing game, and may take months to see long tail search traffic as a result of a given article.

Particularly with regards to guest articles, writing is a loss leader.

Solution: Whilst writing is often a loss leader, it’s often more costly in time and effort to use poor articles than to pay more for high quality ones.

Conclusion

Whilst outsourcing writing may appear at first sight to be the easiest way to get writing done, it’s an area fraught with difficulty, as anyone who has been down the path of buying cheap content can attest to.

Contracting your writing is something that can be expensive, difficult to do and of variable quality upon delivery.

Next time you outsource your writing, consider the benefits of going that extra mile to find someone who can really understand your business and what you’re trying to achieve, and then use that knowledge in the content they produce for you.

Do you have experience with outsourcing writing? Share your experience in the comments section below.

Is Outsourcing Transcription a Profitable Option for Entrepreneurs?

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Entrepreneurs from all works of life (or should I say business niches) make use of audio recordings and video files to store messages for future use.

But sometimes the need to transcribe these recordings into text presents itself.

This is where transcription comes in.

Now the questions are: do you as a busy entrepreneur have the time to accurately go through the process of transcribing your recordings? If your answer is yes, you can skip to the last subheading of this article, but if no, then keep reading.

The solution to transcribing audio and video recordings into text lies with the use of transcription software or physically by hand. The problem with using transcription software applications is that the accuracy level can be quite suspect because — let’s face it — an application, no matter how intelligent, is still a machine. Language is very complex and there are myriad ways of interpreting words that we take for granted. Context is very important, and this is something transcription software is yet to master.

Therefore outsourcing transcriptions to companies providing reliable transcribing services is usually the way to go if you want accuracy and reliability.

Is it a Profitable Option?

Reduced transcription cost 

At the end of the day, money is the biggest motivating factor in most entrepreneur and small business decisions. Outsourcing your transcribing needs generally comes at a very affordable price due to the fact that transcription companies take transcription as their sole business operation and are interested in garnering the good will of their clients. So in most cases, the bulkier the project, the cheaper and more affordable it becomes.

Saves you time 

Outsourcing any kind of project gives the person who’s outsourcing more time on their hands to focus on core business areas and the outsourcing of business transcriptions is no different. The time-intensive nature of translating audio to text is best done by a service provider who’s staff specialise in this, so can do it efficiently.

Reducing recurrent expenditure

Setting up an in-house department to manage any particular service that isn’t part of an entrepreneur’s or business’ core services drastically increases recurrent expenditure, which is the case when purchasing transcribing software and hiring/paying staff to manage it all. Outsourcing transcription eliminates all that while still ensuring that your projects are adequately handled.

The above points serve to show entrepreneurs and small businesses that this is indeed a profitable option and outsourcing transcription can be said to be more profitable than managing media transcriptions in-house.

A helpful tip when searching for a reliable transcription service provider to outsource to is: search for firms from countries such as India, Pakistan, the Philippines etc. because their services come at more affordable prices when compared to what you can get in Western countries.

 Types of Transcription Services

Medical Transcription - this involves outsourcing medical sessions, lectures and conferences for transcription into text format which can then be used in medical documents, blogs and reports.

Video Transcriptions - this involves the transcription of video tutorials, Youtube instructions and video conversations on Skype or elsewhere into text format for use in blogs and documents. Transcribing videos is a great way to add another channel of content to go alongside your marketing videos.

Audio transcriptions - transcribing audio recordings of conversations and business proceedings into text format for use in diverse mediums such as research, freelance work, documents and reports is also a core type of transcription.

Legal transcription - this involves the transcribing of legal audio and video documents as accurately as possible for textual use in legal records and proceedings.

The Benefits of Outsourcing Transcription

  • Speed and Accuracy – one of the major benefits of this specialized service is the level of professionalism at your disposal. Service providers work at a speed honed from years of carrying out similar projects. These projects are also done with a high level of accuracy so as to ensure important information is not lost or missed during the transcription process.
  • The ability to meet deadlines - outsourcing bulky projects allows the entrepreneur or business meet set deadlines regardless of the size of the project.
  • Reduced cost – far cheaper than training staff to transcribe or working with difficult software.
  • Versatility – providing audio and video recordings in different text file formats.

Do you outsource transcription or manage it in house? Share your own experiences in the comments below.

In-House Printing Vs Outsourcing: Choosing the Right ID Card Printing Policy

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printing in house or outsourcingFor many companies, printing effective ID cards has become a vital component of maintaining an effective security policy.

ID cards can reduce the danger of unauthorized individuals gaining access to company property or information, while streamlining the process of verifying employee and guest identities.

However, an important decision that must be made is whether or not the ID cards will be printed in house or outsourced to an external printer. There are benefits and drawbacks to both decisions.

In House Printing

In house printing is a process where the company purchases ID card printers for its own use, rather than using an external printer. The primary advantages of in house printing are the following:

  • By avoiding the use of an external printer, the business can reduce the chance of unauthorized individuals gaining access to the ID cards or other proprietary information.
  • Printing cards on site allows for the prompt replacement of lost cards, in addition to the ability to quickly issue cards to new employees or guests.
  • In house printing makes it easier to quickly change card designs or encode confidential employee information into RFID or magnetic stripe enabled cards.
  • Businesses that need a wide variety of individual ID cards will often find it more economical to use in house printing instead of using an external card printer that is focused on producing large print runs of similar ID card designs. This is especially true if the ID cards will be printed on an individual basis as needed.

However, in house printing can also be disadvantageous in some cases, especially for larger companies with multiple work sites. In this case, the need to efficiently produce a large number of ID cards to the same specifications may make it more effective to outsource the ID card printing. Additionally, outsourcing card production can reduce the need to train company employees in how to effectively use on-site ID card printers.

Outsourcing ID Card Printing

When a business chooses to outsource its ID card services, it can make use of a company that is specialized in this area. Outsourcing can be especially advantageous to a large company that wants to ensure that its ID card policy remains consistent among all of its offices. In addition, outsourcing ID card printing has the following advantages:

  • It allows company employees to focus on their core duties, rather than also being required to operate ID card printers.
  • Outsourcing eliminates the need to invest in purchasing and maintaining printing equipment.
  • Specialized printing services can provide a business with high quality ID card design services, enabling the business to create attractive and unique ID cards.
  • Outsourcing high volume ID card print jobs may result in cost savings when compared to using in house printing services.

However, a company must accept that by outsourcing their printing needs, they will no longer have complete control of the printing process. In addition, some businesses may consider the potential risk to confidential information unacceptable. Finally, companies with government contracts may have security requirements that make outsourcing their ID card printing services unwise.

Ultimately, the decision on whether or not to outsource ID card printing services is one that is dependent on a large number of individual factors. Many businesses will find that their needs are best served by the on-site printing of ID cards, while other companies may find it wiser to outsource their printing needs to a reliable contractor. No matter their ultimate choice, arriving at an effective ID card printing policy is vital to a company’s long-term security.

Image by ell brown and licensed through Creative Commons.

6 Ways to Manage Anxiety in Outsourcing

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Entrepreneurs want to cut corners and increase the bottom line.

They are constantly looking for creative avenues to fulfill their goals with the least cost. Anxiety and stress comes in when businessmen are staring at a blank wall not knowing which action steps to take.

Outsourcing has become a viable answer to bring down the cost without sacrificing much in executing related business processes. However, this could be a reason for businessmen to be anxious since some business processes will no longer be handled in-house.

Let us take a look at ways to bring anxiety down and enjoy the benefits of outsourcing.

Define the scope of work

When engaging with an outsource contractor it pays to have a scope of work which basically is a statement of the things what you want to be done. Before heading for any endeavor to be outsourced, it pays to have the rules of engagement laid out to avoid finger pointing when a mess crops up. Tell the outsourcing contractor what your requirements up front. It is best to set realistic expectations and put metrics in place that the contractor needs to hit.

Never choose by basis of price

Tempting it may seem, but choosing a contractor based on price alone is an anxiety generator. The price should not be the sole consideration why you are picking a contractor. Buying the services of a contractor should be based on a wide spectrum of considerations and there should be a balance of value and quality results. Price is often the worst thing to consider when choosing a service provider. Not only it reflects that it can use price matching as a way to attract customers, it is a serious indicator that it is willing to cut corners to make the contract feasible. Just think of the ways a service contractor will cut its costs. It may not be able to give the workers just compensation and neglect some benefits. It may not be able to provide adequate security infrastructure needed to safeguard customer data.

Look at the contractor’s experience

Look for a service provider with an excellent experience on the business process that you are looking to be accomplished. The last thing you need is to become a lab rat for the contractor. Choose a contractor that will surely generate results. There is a chance that your contractor will just take you to get more experience on your business space. Take a look at their track record on your industry. For example, if you are a financial institution wanting to outsource the payroll side of the business take a look at how long the contractor has been engaging with payroll systems management. Know what are the positive and negative feedback that other clients have to say on a particular contractor.

Evaluate a contractor like a regular employee

When you are evaluating a contractor, ask a lot of questions to contractors as if you are asking an organic employee.  Choosing a service provider is always subjective but it should not stop you from being objective. Ask for references and ask about the performance of the contractor on their own accounts.

Always start small

When you are engaging with an outsourcing contractor it pays to start small. This will enable you to pull back easily when things don’t turn out well. This will save you from a lot of anxiety since you are not putting all your eggs in one basket. Also, this strategy will give you more idea how the provider performs before you can think of possible expansion.

Always get everything in writing

Documentation is crucial when you are outsourcing business processes to a contractor. This is important as you move towards entrusting “mission critical” processes to a service provider. The payment schedules, the risk and rewards and any change in the service agreement including service levels should be listed down.

Outsourcing can be a great way to bring down costs. It is important that you maintain your business independence despite outsourcing some processes. Anxiety comes when surprises spring along the way.

Why You Should Consider Outsourcing To Marketing Companies

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marketing companyIf you are a start-up business owner it is not necessary to carry the burden of your entire company on your shoulders at all times.

There are actually many times when the responsible thing to do is to let some outside help come in and assist you with certain aspects of the business to lessen your load and free up time to focus on other activities.

As marketing is vital to the success of your business, you may want to keep control of this department, but you really should consider outsourcing marketing work to a marketing company.

The marketing company that you use for your business is going to be one that has a great deal of experience in terms of handling various issues that impact businesses in general. They can be highly helpful because they have experts that you know you can count on.

You know that this is going to benefit you because those experts are not going to take the chance of not doing a good job on projects like your website. They want you to see them as respectable and as someone that you would like to hire again and again. The same cannot always be said of the regular outsourced contractors you may have.

Once you consider the time savings involved, outsourcing to a marketing company is often a cheaper alternative to trying to do all of your marketing in-house. Many business owners who realise this are at an advantage to their competitors as they are able to focus on other important areas of the business and be confident that the marketing is taken care of. Just knowing that it can help the bottom line is enough evidence for some. However, for those who remain unconvinced, it would perhaps be worth noting that the work that is produced is often better as well.

If you were getting better work at a lower price, why would you not jump on this opportunity?

Before signing up to a marketing company ensure that they have a good record of delivering expected outcomes. Talk to others in your field for recommendations if you can or spend some time researching companies on the Internet. Many sites provide reviews from previous users of the companies you are considering outsourcing to. You can read up on their experiences and if they would recommend a certain company or not. You are probably going to find that they are very helpful in the recommendations they are able to offer.

Make sure that you have carefully considered all of the options that are available to you. When you find the company that stands out as the right option you are on your way to better marketing and more customers.

 

How to Save Money on Your Outsourcing Contract

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Save Money

Have you signed a new contract with your outsourced IT provider lately?

Did you get the best deal going with your outsourced management organisation, or did you just ‘sign on the dotted line’ and hope everything was in order?

Outsourcing can be a great way to save money, but as with all other business activities you have to have your wits about you to make sure you’re reaping the biggest benefits from the relationship. So here are 8 tips to help you save money on your current outsourcing contract.

1 – Two heads are better than one…

Work with your provider to take a look at the relationship, especially if it’s been established for some time, and see if there are easily identifiable ways to trim costs. If you’ve outsourced your technical needs to an external supplier, they may be more aware of new updates or progression within the market that could benefit you. Trust their input.

2 – Break things down into gold, silver and bronze

Your customers may not all need a premium level service, so work with your outsource supplier to develop a graded service that could cut your costs too.

3 – Extend your contract

This may seem counterintuitive if you’re trying to cut costs, but extending your contract could actually end up saving you money. Have a look at your portfolio and see if you could trim overall costs by outsourcing other aspects of your IT to your current vendor. If you’re coming up to the renewal date for your contract, it could be a great opportunity to renegotiate your existing deal and get a better one as a result.

4 – Trim unnecessary extras from your contract

Taking a second look at your contract during the renewal process also gives you the opportunity to trim functions you’ve found to be unnecessary during the previous year. Renegotiate the terms with your vendor and make sure you don’t end up with services you don’t need.

5 – Head offshore

Taking into account logistical differences such as time zones, offshore outsourcing (even crossing continents) makes sense these days, and can work out to be considerably cheaper than keeping things onshore or even in-house.

6 – Remember that you’re the customer

Everyone is going through tough economic times, which makes your position as a customer stronger than before. Hold your outsourcing vendor accountable and make sure that they’re fulfilling every part of your contract – or take your business somewhere else. While it’s nice to be loyal, don’t fall into a ‘better the devil you know’ complacency, and if your current vendor isn’t delivering, don’t be afraid to switch.

7 – Renegotiate your contract

Negotiation is a two-way process, and it’s up to you to set out the terms that you want from the outset, and then work with the vendor to find out what middle ground you can both find to create a contract that works and delivers. Don’t be afraid to play ‘hardball’ when negotiating – remember that you are relying on them to benefit your business and you’re paying them to do it too, so make sure they’re working to your best interest.

8 – Don’t be afraid to walk away

If the relationship with your vendor just isn’t working any more, don’t be afraid to walk away, especially if an audit of your existing service reveals that they are overcharging you. Another look at your business may reveal that it’s time to bring some of your operations back in-house or even drop them completely.

Share ways you’ve improved your own outsourcing arrangements in the comments below.

Three Great Reasons to Outsource Your Payroll

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Small and medium-sized businesses may not have the resources to dedicate to creating a worry-free payroll system.

Overburdening an individual with payroll duties can lead to non-compliance, which can result in substantial fines from various government agencies, incorrect payments to employees, and other issues that can cause employer/employee strain.

By outsourcing payroll duties to a dedicated payroll provider, a small-business owner can mitigate these potentially devastating situations and focus on growing the business.

Here are three great reasons to consider outsourcing the payroll duties in your organisation:

Save Time

Outsourcing payroll duties can help a small-business owner save time in several ways. First, it eliminates the need to hire and train a payroll specialist for the business.

Second, with a dedicated payroll team already in place, there will be no wasted time researching current payroll regulations. The dedicated payroll provider already has a staff trained in payroll.

Third, because errors will be reduced, your time will not be spent trying to fix them.

In addition to these intangibles, weekly and yearly payroll processing will be eliminated – including; cutting and distributing paychecks, calculating and paying withholdings and employment taxes, preparing and distributing Forms W-2 and 1099 and handling employee payroll questions. As any small business owner knows, time is money and saving it is a great step toward increasing profits.

Save Money

Figuring out the amount of money that can be saved by outsourcing isn’t as straight forward as it first seems. In many small businesses payroll duties may be split up among several people.

Any time spent inputting hours, calculating taxes, printing and cutting checks, or figuring withholdings is time taken away from their primary duties.  If an employee has a question about his or her paycheck, tracking down the correct person to talk to can take even more valuable time. With an outsourced solution, there is minimal internal time cost and most employee questions can be handled by the provider.

The savings may be even more noticeable in increases in work completed by associates who were previously split between multiple job tasks.

Keep Out of Trouble

One of the most important reasons to outsource payroll is to eliminate the need to maintain a system that’s compliant with the changes in payroll tax laws.

It’s estimated that one out of every three small-business owners will be levied with at least $800 in penalties due to tax law violations in any given year. These penalties can come from violations such as miscalculations to missing filing deadlines. Payroll providers have systems to correctly calculate payroll and make timely payments. They monitor tax law changes and often have provisions to address their liability from a payroll or tax payment error.

Outsourcing payroll makes sense for any small business looking to streamline operations and maximize returns on investment. Using an outside company can mitigate costly government penalties, reduce payroll generation costs and allow employees to focus on their areas of expertise instead of having them wearing multiple hats.

Bottom line: outsourcing payroll saves cash in the long-run.  You can find more information about payroll outsourcing here.