Choosing An Umbrella Company – What You Need To Consider
With so many umbrella companies to choose from, deciding on one can be intimidating for a freelance contractor. There are specific things you should know about the umbrella company before making a decision. Carefully examine their fee structure so there are no surprises. Find out exactly what services they provide, if they have Internet access for ease of use, and ask around to learn about their reputation. Knowing just a few details can save you money over the long term.
When looking at a company’s fee structure, watch out for hidden start-up fees and exit fees. You may want to choose a company with set fees rather than fees based on your income, especially if it fluctuates or you make more money. Income based fees will increase with your income and can take a hefty percentage of your earnings. Most companies will charge weekly, semi-monthly, or monthly, and you will have to determine which works best for you.
Spend some time looking into companies. There is a good chance that you know people who can recommend one company over another; learn from their experiences. It won’t be difficult to find out which firms to watch out for. You can also ask the company about their current clients and ask for testimonials. A good sign of stability is length of time in business and good references.
One of the most important issues for a freelancer is good customer service. Find out how easy it is to submit timesheets and expenses. Do they have a website for submissions? Ask about response time. You have a schedule to keep and don’t want to be held up, waiting to hear back from your umbrella company. Look for a company that offers a “money back guarantee” if you are not satisfied with their performance.
Depending on your particular circumstances, how a company pays could play a major role in choosing an umbrella company. Ask if they pay using FPS, C.H.A.P.S., or Bacs. If they use Bacs, you will have to wait days to be paid, but if they use FPS or C.H.A.P.S., you will receive payments in just one day as they use a same-day bank transfer, while Bacs is not an instant transfer of funds.
As a standard, most umbrella companies provide insurance for their contractors; public liability, employer’s liability, and professional indemnity, but always ask to be sure. Also, a good sign of compliance is the umbrella company’s membership in a professional body like AEMC, Professional Passport, or SPA. If a company can meet all these standards and your individual needs, they should be a safe bet.
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