12 December 2018

Freelance boom in Germany: challenge for time recording and accounting

The flexibilisation of the labour market has ensured that the share of freelance professionals has increased significantly in recent years. The ever-increasing shortage of skilled workers in many sectors further reinforces the trend. Instead of entering the "war for talents" for the rare skilled workers, many companies today try to cover their personnel capacities through external freelancers. Take the IT industry, for example: as the Trade journal Computerwoche based on an IT freelancer study, reports that currently "four out of five companies make use of IT freelancers and other external workers, and in larger companies one in two IT professionals is now no longer a permanent employee".

This change in the employment relationship - the employer becomes the client - has clear consequences for project management and controlling in the companies concerned. Instead of creating a payroll, these companies must first check the invoices of their external employees and then invoice them to their client.

Audit is simplified

In order to automate and thus simplify this usually manual and time-consuming process, provantis offers the module "Freelancers" for its time recording solution ZEP.

In many companies that increasingly rely on external employees, invoice verification is still done manually. The same questions have to be answered for every incoming invoice:

  • Which client/project was worked for?
  • Are the number of hours correctly recorded?
  • Was the agreed hourly/daily rate used?

With the additional module "Freelancers" it is possible to create a so-called cost accounting for each external employee. The hourly and daily rates agreed for the respective job can be stored there. These are then linked to the hours worked recorded via ZEP and thus result in an up-to-date and precise list of what the respective external employee may charge with the next invoice. For invoice verification, it is therefore sufficient to compare the received invoice with the corresponding cost statement in ZEP. Errors and discrepancies in the billing thus become clear at a glance.

Even simpler: credit note instead of invoice

Companies that would like to simplify the accounting of external employees and freelancers even further can do so by not only using the cost accounting created in the ZEP module for invoice verification, but also automatically creating a credit note from it, on the basis of which the external employee is then billed and paid.

This method not only saves time for invoice verification, but also relieves the external employee of the time-consuming work of having to create an invoice himself with corresponding proof of the work he has done. In addition, the created credit notes can be automatically transferred to the company's financial accounting solution via the ZEP Export module. It is then also possible to store special expense accounts and BU keys for freelancers.

Conclusion: The ZEP add-on module "Freelancers" offers all parties involved in the accounting process advantages in the accounting of freelance activities:

  • Simplified and more accurate invoice verification by the freelancer's client (cost accounting)
  • Complete omission of invoice verification by the freelancer's client (credit note procedure)
  • Complete omission of invoicing by the freelancer (credit note procedure)
  • Automatic transfer of data to the client's financial accounting system (export module)

Further information on the ZEP module "Freelancers" is available at the ZEP website available.