A Really Quite Good Guide on What a Freelance Management System Is

The world of work is changing. In many ways, it already has changed. It is the golden age for the external workforce, which includes - Freelancers, Consultants, Contractors, Contingent or Gig Workers etc. The external workforce - the term we adopted internally - is booming and will continue to do so in the coming years. By 2030, app. 50% of the U.S. workforce will consist of external consultants and freelancers.

According to FinancesOnline, freelancers contribute around one trillion dollars to the U.S. economy, and this number will only increase - and that pertains to the European market.

As businesses begin realising the potential of a flexible workforce, consisting of external consultants and freelancers, the need for better coverage and complete visibility of workflows increases. Managing hundreds - in some cases, thousands of external consultants is time-consuming and very demanding for any company.


Most firms do not have the required capabilities or the strategy to drive their external workforce effectively. As a result, most businesses rely on several solutions to onboard, create tasks, register time, invoice etc., resulting in broken, manual and time-consuming processes.

The need to be met is the need for software that has it all - a platform for every need, channel, and workflow to digitalise and centralise. Practical, flexible talent management requires innovative digital solutions. The Freelance Management Systems (FMS) advent enables companies to streamline and automate their siloed processes. This article introduces what an FMS is and why and how companies should use one.

What is a Freelance Management System?

A Freelance Management System (FMS) is a cloud-based solution that serves as the foundation for organisations to manage their external workforce. An FMS empowers businesses to manage end-to-end their external workforce in a single platform. It provides companies with a single source of truth. Everything from identity, acquire, onboard, manage, pay, and offboard external consultants for assignments via an end-to-end platform.

Such software also supports HR. and business executives with a robust analytics engine they can use to increase transparency; to better track, manage and understand their costs related to freelancers and consultants.

This type of solution makes it easier for large scale companies and smaller businesses to procure freelancers with the proper skill set and experience. Additionally, you will be able to onboard talent and manage projects with a superb resource management overview.

Benefits of a Freelance Management System

Most companies developed legacy processes to manage their external workforce, relying on multiple and diverse tools, networks, and services. Let those be job boards, project management systems, HR. solutions or third-party vendors. The different workflows differ from employee to employee and from department to department. This decentralised process resulted in time-consuming manual processes and a lack of compliance, transparency and accountability.

Businesses using an FMS can automate and centralise processes related to the management of independent workers. Companies for the first time can collect and analyse data associated with the external workforce. Therefore, an FMS, if used correctly, can serve as a single source of truth platform with transparent, automated workflows, leading to increased transparency and control.

You can read more about the importance of data here.

Doing so enables businesses to analyse and optimise costs related to the external workforce. Organisations that use freelance management technologies, like an FMS, can collect insight on the real benefits of their external workforce efforts and use the insights to forecast budgets for future staffing needs.


As the industry develops, the expenditure of some global businesses reaches millions of dollars on the external workforce. As a result, they can no longer avoid implementing a system to manage and measure this increasingly influential part of their workforce. At its centre, FMS platforms empower businesses to compliantly grow an on-demand workforce of hundreds or sometimes thousands of consultants.

Who can benefit from a Freelance Management System?

Whether a company requires technological support to manage its external workforce depends on the number of freelancers and consultants businesses engage with. Generally, companies having more than ten external talents within their organisation will need help with the management tasks. However, an FMS can serve small- and medium-sized companies by creating the foundation of an external talent pool. The application and benefits of Freelance Management Systems can vary within a company depending on which departments we look at:

Human resources —  Fasten sourcing, hiring and onboarding with centralised, automated processes.
Operations — Centralised overview of the external workforce and expenses. Enable streamlined processes within the organisations - between HR., procurement and finance.
Finance and Procurement — Get the best possible offers from third-party vendors and independent contractors.
Compliance and Legal — Ensure compliance and lower the risks associated with legal, tax and workforce classification.

What are the main features of a Freelance Management System?

1. Excellent sourcing and procurement system

As more and more people choose flexible work, it gets harder to identify the right candidate, whether it is a short-term gig freelancer or a long-term highly skilled consultant. Most businesses find their following consultants through different service providers or personal connections. Relying on multiple vendors, e.g. Toptal, Upwork, and 7N, leads to more time reviewing proposals and managing RFPs, among other platforms. Creating talent clouds with searchable candidate profiles within an FMS makes it easy to identify and evaluate consultants from different marketplaces.

2. Easy onboarding and offboarding

Reduce onboarding time by weeks with a safe FMS - you can have all documents and data in one place for an external consultant to read and sign in their own time. Most companies, however, do not have the right processes in place to onboard the external workforce. It is a general misconception that onboarding a consultant is just like onboarding a full-time employee - that's not exactly the case. Using an FMS enables a streamlined and automated workflow, which can be specified according to your needs. By implementing onboarding checklists, you can ensure that all legal requirements (NDAs, IP agreements, special terms) are signed and secured. Giving access to IT. can ensure that the freelancers have access to all the required systems and hardware.

Similarly, offboarding is as essential as a good onboarding experience. Again, freelance management systems can help you ensure a compliant offboarding. Having a successful offboarding could also entail keeping the track record of your external consultants or freelancers. Keep reports about the collaboration, and give and get feedback to enable efficient rehiring.

3. Complete budget and expense transparency

The powerful analytics provided by a freelance management system will give you the control back. Are you staying on budget? How many hours are your freelancer logging? Which of your freelancers is performing most consistently? Given the high number of hires and decentralised processes, most finance teams and managers do not have an overview of hired freelancers or consultants, not to mention the expenditure. Most freelance management systems have been developed to support project-based budgets or individual invoice management. The former methodology enables real-time tracking of planned and actual spending. While the former requires that the finance team or manager approve invoices before a payout. Both methods ensure that expenditures are not under or above budgets, allowing companies to predict and plan for future projects.

4. Effortless automated billing and payment methods

As your external workforce grows, the more variables you and your team will have to accommodate. Multiple currencies and payment methods need to be supported depending on the consultant's location and preference.

A set of manual processes needs to be done as the invoices come in at the end of each month. Reviewing, approving, in many cases multiple times, and paying each freelancer on their terms is tedious and time-consuming. Some platforms even have time registration tools, enabling the consultants to auto-generate their invoices. It's a win-win situation. If you already use other devices and platforms, integrate them into the FMS to further automate and avoid multiple entries. The siloed processes can be optimised and automatised by implementing an FMS solution. 

Less manual work means fever mistakes. Avoiding mistakes can fasten payouts and ensure that the projects are on time. Not to mention that your external talent is also satisfied. And when you free up all of the time spent pouring over invoices, you gain back one of your most valuable resources. 

Some Freelance Management Systems have additional features to further support the advancement of the Future of Work movement.

Most companies do not invest in their external workforce as they do with their full-time employees. No need to think of grand activities. Providing a thorough onboarding and giving feedback can already come a long way.

You can check our quick guide on how to give feedback effectively to your external workforce here.

Prepare your business for the future of work

Any stigma associated with contingent is long gone, and we have access to a whole new ecosystem of tools and technology providers focused on connecting people and opportunities. These are unprecedented times in terms of access to the number and quality of the external workforce. As a result, we see projects at the highest level being extended to suppliers that would not have access to these opportunities a few years ago.

On the other hand, considering the complexity of flexible workforce management, it is essential for organisations to streamline and automate internal processes and workflows.

A freelance management system can empower you and your company to harvest all of the benefits of greater agility of your external workforce to become faster, agile, and more competitive.

Interested in the Future of Work?

Sign-up for our monthly newsletter. No spam. Ever.

Unleash the potential of your external workforce

Schedule a demo to see how the Flextribe
freelance management system can help your business.

Sign up for a demo