6 Easy Steps to Manage Your Freelancer Contracts

To keep your organization running smoothly, it's crucial to maintain strong relationships with freelancers built on well-defined contracts.

A well-crafted contract should clearly outline your expectations, project requirements, legal obligations, payment terms, and more. Neglecting these details can lead to disputes over hours, payments, or contract terms, potentially damaging your business's reputation, causing payment conflicts, or even leading to legal issues like worker misclassification.

You can avoid these pitfalls by adopting a consistent approach to contract management. Yes, this might sound complicated, but in reality, managing freelancer contracts can be made simple.

This is where implementing an automated contract management system is worth its weight in gold. Such a system streamlines contract management, offering a centralized, cloud-based solution that ensures legal compliance and prevents project delays.

Want to learn more? Continue reading!

The Benefits of an Automated Contract Management System

There are several benefits to adopting an automated contract management system, most notably:

Improved efficiency: Such a system empowers you to standardize your freelance contracts using templates. It lets you quickly generate a contract once a suitable freelancer has been secured for a specific client and their project.

Risk mitigation: The downside of paper contracts kept in filing cabinets or Excel spreadsheets is that they're lost, prone to error, difficult for everyone to access, and, in the case of paper records, easily lost. In contrast, a centralized online system allows authorized people to access the contract to check that agreed terms and obligations are followed and delivered. 

Cost reduction: You can minimize your staffing costs by spending less time manually producing individual contracts and having each contract legally screened. 

Build positive relationships: An automated, robust contract management system exudes professionalism, which can help to solidify an employer brand renowned for its reliability. Freelancers will see that you take your contractual obligations seriously, which works wonders for building trust. 

Reporting: Freelance contracts aren't just a record of a freelancer’s obligations and rates of pay. They're also invaluable sources of data you can refer to when renegotiating/reissuing contracts. Having a centralized system means you can see, at any time, how many active contracts you have, how much you’re spending on each freelancer, and more.

Risks of Poor Contract Management

There are several risks to adopting a manual approach to contract management. We’ve touched on these a little above, but let’s dive in a bit deeper:

Legal disputes: When an agency or organization has unclear freelancer contracts, it could result in legal disputes, especially over pay. Statistics vary, with one study finding that 22% of freelancers experience late or non-payment of invoices. In contrast, another found 44% have experienced not getting paid at all. Also, your organization may become sensitive to liability, e.g., if they use a piece of work subject to incensed intellectual property rules outside of the contract.  

Miscommunication: Building on the above point, an unclear contract is open to misinterpretation and miscommunication. For example, a lack of clarity about expectations, project deadlines, hourly or weekly pay, and so on. At this point, it's worth underscoring the importance of meticulous version control. A manual system may not be capable of incorporating potential contractual amendments or changes, which, again, could result in costly misunderstandings.

Loss of business: If you’re slow in negotiating and/or approving a contract, freelancers may move on elsewhere, and project deadlines may be missed. The stats support this, with half of business leaders surveyed stating their contracting process led to missed business opportunities. 

GDPR: Contracts contain sensitive information about freelancers. For example, their personal details, pay rates, and so on. If this information is not securely stored, your organization risks GDPR breaches.

Contract Management Solutions

Fortunately, you can sidestep the above pitfalls. If you want to improve your agency’s contract management, follow our six easy steps:

Step 1: Centralize and Standardize Contract Templates: Use standardized templates for similar types of work to ensure consistency and save time. Rather than drawing up contracts for each freelancer, you take on from scratch, or worse, using outdated paper copies that may not reflect the latest legislation or freelancer-client agreement, electronic templates can save your agency a ton of time. 

Step 2: Clearly Define Roles and Responsibilities: Each contract should comprehensively outline the freelancer’s role and responsibilities. This clarity ensures accountability and minimizes ambiguities, providing a secure foundation for your business operations. 

Step 3: Regular Reviews and Updates: Steps 1 and 2 are great, but that doesn’t mean you can sit back after you've executed them. Instead, it’s essential that, as part of your automated system, you schedule regular contract reviews. That way, you can ensure all your contracts reflect any new employment laws that may impact your agency, your freelancers, and your clients.

Step 4: Digital Management Tools: To help streamline your freelance contract management, digital tools like a freelance management system (FMS) will help you track contract deadlines, renewals, and compliance.

Step 5: Training Team Members: Train all team members involved in the contract process to ensure they know how to use your digital management tools and understand the contract terms and implications.

Step 6: Feedback Mechanisms: Ask for feedback from clients and freelancers. Then, use this data to refine contracts based on practical experience. That way, your process will not stagnate, and everyone involved will be happy.

What are the Alternatives?

For balance, it’s essential to consider the alternatives to the above. Instead of employing a freelance management system, other contract management tools are available. For example, DocuSign and PandaDoc. Both facilitate faster document creation, tracking, management, and signing. 

So, why use Bubty?

There are benefits to integrating all contract-related tasks within a single system, such as Bubty, not least simplifying workflows and enhancing compliance and oversight.

Let’s take a look:

Digital signing: Once all aspects of the contract have been agreed upon, all parties can digitally sign contracts using Bubty’s contract signing tool and return them quickly and securely. 

Automated renewal reminders: when a contract is due to end, you'll receive automated renewal reminders, giving you time to decide what happens next.

Secure contract storage: All contracts are stored securely on Bubty’s cloud-based system, which complies with relevant EU (GDPR) and US privacy laws.

Contract compliance: Our contract templates are designed to comply with different country and state rules. For example, for the US, a SOW (a statement of work that includes the project's needs, deliverables and timelines, work location, and payment terms). Elsewhere, in the UK, freelancer agreements outline the scope of work, deadlines, and payments. 

Job board: You can manage all aspects of a freelance contract, including when you want to post a new job contract and receive applications, on your own freelancer job board. This means contracts can be issued as soon as you find a suitable candidate.

Contract matching: Bubty’s AI matching and advanced search filters help you find candidates with the right skills and experience for each contract.

All of the above are designed to make managing freelancer agreements easier and more efficient. 

Are You Ready to Rethink How You Manage Your Freelancer Contracts?

Managing freelance contracts using a robust and secure freelance management system will only save you time and protect your business from human error.

However, we understand that implementing a freelance management system is a big commitment. That’s why we’ve written ‘Freelance Management Blueprint, ’ to provide a deeper dive into effective contract management and managing freelancers overall. 

It’s packed with detailed guidelines and examples of contract management so that you can customize your contracts to suit your needs. Download for free today - enjoy!