Does your brand pay influencers and freelancers at scale? Professionals in influencer marketing are not new to tracking down payment information from influencers and freelancers, managing tax compliance, and collecting 1099 forms.
While you might have your influencer marketing strategy down, your influencer and freelancer payment solution may be outdated or may not meet the unique challenges facing your marketing and finance teams when it comes to tracking invoices or paying dozens to hundreds of influencers at scale.
One of the easiest ways to make your internal teams and 1099 employees happy is by streamlining your payments and implementing a seamless solution into your existing workflow. That way, it's easy for finance and accounting teams to provide approvals, integrate into your current solutions, and pay out hundreds of influencers and freelancers globally.
Having a built-in payments strategy is the easiest way to build long-term partnerships. What works for one influencer might not work for another. Determining the best plan for your team, your influencers, and your freelancers is essential.
Regardless of how your band works with influencers and freelancers, in this article, we'll walk you through the five best solutions you should consider when paying them.
ACH transfers are electronic transfers of money sent between banks, credit unions, or other financial institutions through an electronic network or clearing house.
- Convenient for recurring payments
- Quick, but this method can take days to complete
- Only available for domestic transactions
Wire transfers are electronic transfers initiated by banks that move funds from one account to another. Wire transfers happen between bank accounts, debit/credit cards, and online payment services like PayPal.
- Convenient for transferring large amounts of money
- Quick and often processes the payment on the same day
- Receive money same day
- Recipients' banking information is required, such as account number, address and phone number, and routing number
- Fees can add up, especially using international wiser transfers
- Subject to more scams
While this payment method is known to many, it's more traditional. Paper checks are physical forms of paper used to withdraw money or deposit funds into a checking or savings account.
- Convenient for large payments
- Transactions are much slower
- Check are easily lost
- High risk of landing in the hands of the wrong recipient
PayPal is a widely and commonly known payment method. You can use PayPal to pay influencers and freelancers with international bank accounts, and it accepts various payment options.
PayPal is an easy alternative for marketing teams looking to send funds without going through tedious funding or approval processes with their AP team. Eliminating the internal vendor onboarding process that causes friction and confusion for influencers and freelancers is considered a big win.
Compared to newer platforms and other traditional payment solutions, the downside is that PayPal's fees are costly for the brand, influencers, and freelancers. If you're a brand paying influencers and freelancers, they're subject to paying a 3% to 5% processing fee to accept and transfer payment to their bank account.
While PayPal is the more commonly used solution, it's not always the soundest, especially if you want to strengthen your relationships with influencers and freelancers.
While newer, Lumanu's payouts solution was designed to meet the unique needs of brands working with influencers and freelancers in any capacity. Lumanu is the only creator-focused payouts platform that supports international payouts to influencers and freelancers at mid-market exchange rates. It's complete with embedded financing options for brands and the creators they work with and integrates with already existing AP/AR software, such as Quickbooks and Zapier.
With Lumanu, you can send invoices from your account in minutes and automatically pay out hundreds of creators in seconds. You can spare yourself the hassle of lengthy vendor onboarding processes and tax compliance paperwork as Lumanu's team handles it. Plus, every account has a dedicated creator success team to assist with onboarding and troubleshooting.
As an influencer and freelancer-first platform, your creative talent and 1099 employees can use Lumanu for free with zero processing fees. They can expect payments same-day or opt to get their earned income sooner without waiting for net payment terms set forth by your brand.
Now that you've explored your options, consider the ones that are designed to make your workflow easier without unnecessary costs and friction. Paying out influencers and freelancers is only complicated if you're not optimizing your workflow. Schedule a demo with our team today to learn more about how your brand can simplify payouts.