The Ultimate Guide: Freelance Management System (FMS)

Today, freelancers and independent contractors are vital to modern businesses. So why are they mostly managed by email and spreadsheets instead of a freelance management system (FMS)?

It has become clear that companies that include both full-time employees and freelancers can increase their agility and flexibility in an unpredictable world. However, these companies also experience how challenging it is to manage freelancers, independent contractors, consultants, and agencies. 

If you are looking for a better way to manage your freelancers, independent contractors, consultants, and agencies – then you’re probably looking for a freelance management system.

This article is part of our guide on independent contractors’ management.

Learn more in our detailed guide to remote freelancer.

What is Freelance Management System (FMS)?

A freelance management system (FMS) is a platform that manages all of the operational, financial, and legal components of working with freelancers to help companies reduce paperwork and boost productivity. 

It streamlines and simplifies every process — from finding the right talent to ensuring compliance — so you can dive into work fast and produce better outcomes. 

Without one, managing a growing number of the contingent workforce (i.e. freelancers, consultants, gig workers, etc.) is an overwhelmingly complex and time-consuming responsibility. 

The pain of mismanagement the freelance workforce is real. But it doesn’t need to be that way. The solution is within reach.

The pain of freelancer mismanagement 

The biggest benefits of working with freelancers are gaining agility and tapping on-demand expertise. When you do not need to wait months to hire full time employees, you can quickly leverage external talent whose skill set suits the specific task at hand. 

Yet, many hiring managers choose not to outsource small projects that require unique expertise due to the hassle it creates.

Without a freelance management platform, you’ll confront numerous obstacles that slow down the pace of work and create heavy administrative burdens for your staff, such as getting budget approval, providing system access to the freelancer, managing invoices, and more. Not to mention, you expose your company to unnecessary risk.

Here are the four biggest pain points of attempting to manage freelancers manually.

1. Finding the right talent for the job

Finding qualified, dependable talent across hundreds of freelance marketplaces is extremely difficult and time-consuming for hiring managers. Also, it is hard to ensure that your candidate really has the skills needed for the project, since some freelancers have the tendency to get very creative on their profile pages in freelance marketplaces.

And even if a freelancer or an independent contractor has the skills needed, can you rely on their commitment to deliver? It takes time to build this trust, but when you build it, it is worth its weight in gold. Literally.

2. Inefficient onboarding

Once you do find the right person, getting them onboarded may be a long and inefficient process. First, you need to make sure the freelancer signs the required legal documents — such as a contract, NDA, IP agreement, and data protection — and submits the necessary tax forms. 

Then, IT needs to provide them access to your systems whether it’s an email address, slack access or a Salesforce user. Finally, you need to train them on the project or task they will be executing. 

After all of this, it can be days or even weeks before they can actually start working. What begins as a search for “on-demand” talent easily becomes the barrier to productivity.

Many companies have invested heavily is developing new onboarding processes for remote teams during COVID-19. These companies tend to believe their new processes can include freelancers, although it was designed to full time employees. Our experience have showed us it is rarely the case. With full time employees you are are building a long term relationship based on trust. However, with freelancers and independent contractors, the relationship is short term focused and you need to ensure they can get started quickly (time to value) and also ensure you can off-board them on time. After all, who wants to keep freelancers with GitHub or Salesforce access long after they completed their projects.

3. Handling invoices and payments

You would be surprised by how often relationships between freelancers and companies sour due to late payments, which break down trust. 

Hiring managers are caught in the middle between the freelance or contractor they work with and their finance team, which is expected to follow certain procedures and processes. Freelancers are dependent on the hiring manager for visibility on when they will get paid, but hiring managers are dependent on the finance team to pay the invoice. Not an easy situation for anyone.

Now, add in the fact that most top talents come from referrals. You can be sure that a company with a payment “issue” will suffer from this problematic reputation, which can make it much harder for them to hire top talents. Research conducted by PYMNTS and North Lane technologies, found that due to the growing demand among top talent for quick payments, 85% of company leaders stated that their businesses already supported real-time payments or planned to by 2023.

4. IP issues and other costly compliance matters

Unfortunately, the importance of protecting your company’s ideas, products, or other aspects of your business when working with freelancers and independent contractors is not well understood by most hiring managers until it’s too late.

Most issues occur not due to freelancers using a company’s patent, but during due diligence processes when an IPO, acquisition or a strategic investment is on the horizon and the finance and legal teams are getting ready for an audit.

This is usually the time when issues of freelancers not signing NDAs, IP agreements and even basic contracts comes up, and you need to go back and ask them to sign retroactively. Many companies have paid greatly for this mistake as they had to pay an extensive amount for freelancers to sign or it may result in losing huge business opportunities due to failed audits.

Obviously, IP issues are not the only risk of not properly managing the signing and archiving of legal documents. Not to mention the growing risk of employee misclassification in the US and the UK.

Freelance management systems are changing the game

The challenges detailed above may seem overwhelming. Fortunately, using a freelance management system makes them a non-issue.

With one platform automating all processes related to freelancers and contractors, FMS helps teams take advantage of on-demand talent without being slowed down by internal bureaucracy.

What used to feel like an unbearable amount of work and undue risk virtually disappears once you deploy a cloud-based freelance management system.

So What Exactly Is A Freelancer Management System (FMS)?

All companies and departments can benefit by leveraging on-demand talent without the back office hassle, regardless of their size or vertical.

However, not all freelance management systems (FMS) are designed to assist with all aspects and/or all company sizes.

For example, large-scale, enterprise solutions like SAP Fieldglass and Workmarket by ADP were among the first FMS to enter the market. While these companies helped pioneer this new technology, they are not suitable for most companies. Designed to support complicated organizational processes which are procurement led, these platforms are heavy, complex, and require substantial maintenance.

Recently, a new class of solutions were released for the mid-market, such as Fiverr Enterprise. Fiverr Enterprise’s platform has an intuitive user interface and covers all aspects of working with all types of freelancers (hiring, onboarding, payment, compliance and more), making it the ideal solution for midsize companies that prioritize speed and agility as they grow.

Top Freelance Management Systems (FMS)

Let’s look at today’s top freelance management systems (FMS) and what they each offer.

Fiverr Enterprise

A single SaaS solution that enables businesses and companies to source, hire, onboard, manage and pay their freelancers, all while ensuring compliance. Fiverr Enterprise gets rid of the financial, admin, and legal headaches of working with independent contractors, freelancers, and consultants. We enable you to gain full visibility over the freelancers your team works with, while making the entire process more efficient and controlled. Our platform reduces the time your team spend chasing after — and worrying over — sourcing, legal docs, tax forms, payment terms, budget approvals, granting system access and much more. 


Provides tools for managing freelancers, contractors, and vendors, including onboarding, compliance, and performance tracking. WorkSuite’s features include project management tools, time tracking systems, document collaboration platforms, task prioritization modules, and real-time messaging functionalities. The flexible and customizable software can cater to different industries and adapt to the specific needs of each client. Whether you are a small startup, a mid-sized company, or a large enterprise, WorkSuite empowers your workforce to work smarter, not harder. By centralizing key processes and providing actionable insights through data analytics, our solutions enable businesses to make informed decisions and achieve sustainable growth.


Connects businesses with skilled freelancers and independent contractors across various industries and aims to simplify the process of hiring and managing freelancers by providing a user-friendly platform with tools for sourcing, onboarding, project management, and payments. With Worksome, businesses can quickly access a diverse pool of pre-vetted and highly skilled professionals, making it easier to find the perfect match for their project needs. They offer intuitive search and filtering features which allow companies to narrow down their search based on specific skills, experience levels, and project requirements.


A platform for managing global remote teams and international payroll for businesses that work with freelancers and independent contractors. They provide a suite of tools and services tailored to meet the needs of both employers and remote workers. Deel streamlines the onboarding process by handling all necessary paperwork, including employment contracts and compliance with local labor laws and regulations. This ensures that both companies and freelancers are protected and that all engagements are conducted in a legally compliant manner.


Connects businesses with freelance professionals in the creative and tech industries. YunoJuno aims to facilitate the process of hiring and managing freelance talent by providing a user-friendly platform that caters to the needs of both employers and freelancers. With YunoJuno, businesses can discover a curated network of skilled freelancers across a wide range of creative and technical disciplines, including design, marketing, software development, and more. Our platform allows companies to search for freelancers based on specific skills, experience levels, and project requirements, ensuring a perfect match for each unique project.

Platform for managing and streamlining the hiring and engagement process of freelance professionals and independent contractors. Aims to simplify the way businesses find and work with freelancers, making it easier for companies to source, onboard, and manage remote talent. simplifies the onboarding process by handling contracts, compliance, and other administrative tasks, reducing the burden on HR and procurement teams.

5 core benefits of using a freelance management system

Freelance management systems offer several key benefits that save your departments valuable time and resources.

1. Help teams find the right talent quickly and effortlessly 

Finding qualified, experienced and dependable freelance workers is a major task. While large freelance platforms like Fiverr and Upwork are suitable for short-term gig work, it’s unlikely you’ll find highly skilled, qualified freelancers that are seeking long-term jobs.

Currently, the most common ways businesses find external talent is through service providers and personal networks.

In each of these methods, finding the right talent is kind of like throwing a dart in the dark and hoping you’ll hit the target. There are millions of candidates, and choosing the right one can seem daunting. And, as more premium and boutique freelance marketplaces emerge (such as Toptal, Braintrust, TalMix, and Catalan), the time you spend vetting freelancers, reviewing portfolios, and managing RFPs across separate platforms will only increase. 

With a freelance management system, you can build your own custom talent pool of highly skilled freelancers right on the platform. This makes it easy to get in touch again without the hassle of rigorous research and reduces reliance on expensive talent agencies.

An FMS is a game changer for hiring managers, who no longer need to waste valuable time evaluating each freelancer across different marketplaces. With a freelance management system, you’ll have full visibility into your extended workforce and gain the tools you need to build an elite talent roster.

2. Seamless, automated onboarding and offboarding

Onboarding your freelancers fast and efficiently is the best way to get them ramped up and ready to work. After all, that’s why you hired them. But without a standardized onboarding approach, you’ll inevitably face delays and bottlenecks, and tedious paperwork will slow you down.

With a freelance management system, every step on the onboarding checklist is streamlined and simplified through automation.

The platform enables you to customize the onboarding process to best fit your needs. It ensures the freelancer contracts and all other legal documents (NDA, IP agreements, data protection etc.) are signed, and tax forms have been uploaded. Even IT departments can be added to the process to ensure freelancers are only granted system access for the duration of their work and all is properly documented.

As we mentioned already, offboarding is just as crucial, though few companies have a systemized process for managing it. Freelancer management systems help you ensure you cover all of your bases when parting ways with contingent workers. Most importantly, it prevents your freelancers from retaining access to your organization’s systems and sensitive data. 

3. Full visibility to budget and spend

Most finance teams and department leaders are not aware of the number of freelancers and contractors their teams work with, and even more so, the actual quarterly spend on their work.

Most FMS enables you to work with two modes. You can either grant your every department, team or project a budget and track the planned vs. actual spend in real time. Another option is to have finance or the department manager approve every single invoice. Either way, it gives managers full control over their budget.

With an FMS, you can avoid the long and tedious process of setting up and approving purchase orders, which, by the way, backfires as often as it helps. Not to mention you can say goodbye to bulky spreadsheets, which are prone to human error (and eye strain!). FMSs take the pain and risk out of advance budget approvals and tracking, removing dreaded POs and messy, formula-laden spreadsheets from your processes. 

On top of that, it helps department managers ensure their budget aligns with their business priorities. It also helps avoid budget under- or over-usage, so they can make a solid business case for the budget they need in the following quarter.

4. Quick and easy payments

As you build up your alternative workforce, there will be greater variation in your freelancers’ rates, the currencies in which they are paid, and preferred payment method. 

The task of reviewing, approving, and paying each individual freelancer’s invoice according to their specific requirements is overly complex and time-consuming. It’s safe to say this is not your finance department’s favorite part of their job.

A freelance management system removes the need for this tedious work by consolidating all of your freelancers’ invoices into one invoice for you to approve. 

The freelance management system will pay your freelancers once the invoice is approved by the hiring manager based on your preferred payment method.

With less paperwork and fewer constraints, you’ll be able to avoid mistakes, pay your talent base on time, and keep projects rolling. And when you free up all of the time spent pouring over invoices, you gain back one of your most valuable resources.

For finance teams, a freelance management system is a godsend.

5. Guaranteed legal, tax, and workforce classification compliance

To your legal department, enlisting freelance services equals exposing your company to a broad range of risks — and there’s some truth to that.

Without a standardized and streamlined approach to managing legal, tax, and workforce classification compliance, your organization increases its risk significantly. As we all know, the consequences of misclassifying your freelancers or identifying a breach in a contract can be costly.

Freelancer management systems empower you to guarantee compliance automating key legal processes. 

Instead of wasting time with endless emails, your freelance management system will house and validate every legal document relevant to your workforce, including contracts, NDAs, Non-Competes, IP Ownership, and more.

It also collects and secures the right tax forms to ensure you remain compliant with tax regulations and workforce classification. With an FMS, your freelancers can simply upload their W9, W8/W8 BEN, 1099, and their country’s tax form, and monitor employment risk on an ongoing basis.

Use a freelance management system to maximize benefits and minimize risk

In the new business reality, companies need a way to leverage on-demand talent without creating unnecessary risk.

With a robust freelance management system, there is no need to compromise on compliance, risk employee misclassification, or waste valuable time reviewing each non-payroll worker’s invoices and opening POs. In addition, it will increase the productivity of your entire workforce due to proper managements of contractors and freelancers.

A freelance management system empowers you to reap all of the benefits of greater agility of the your contingent workforce to become faster, nimbler, and more competitive.