Following from Contracting Consultants? article, it’s now time to pay their services. A consultant can be paid on a per hour basis or on a per deliverable based on agreed upon price.
The consultant should issue an invoice or a billing statement. According to Wikipedia, an Invoice, a bill or tab is a commercial document issued by a seller to a buyer, relating to a sale transaction and indicating the products, quantities, and agreed prices for products or services the seller had provided the buyer. Payment terms are usually stated on the invoice.
As usual, I give free stuff, download the INVOICE template below.
In order to bill properly, there should be visibility on how effort are measured and the equivalent output. There are several online services, to measure the time spent by consultants on each activity. We use Clockify.me 100% free time clocking software. I find it very useful to integrate time tracking with a backlog management tool. For Jira users, try Time Doctor.
After receiving the invoice from the consultant, the company will issue a Payment Voucher. According to business dictionary, a payment voucher, is a document which can be used as proof that a monetary transaction has occurred between two parties. In business, a payment voucher can be used for a variety of purposes, sometimes taking the place of cash in a transaction, acting as a receipt, or indicating that an invoice has been approved for payment.
As usual, I give free stuff, download the Payment Voucher template below.
In the Philippines, the company contracting the consultant withholds tax based on graduated tax rates of 5% to 32%. For simplicity, the company can withhold 10% of the consulting fee and let the consultant consolidate the taxes during their yearly filing. The company provides BIR Form No. 2307 that the consultant can submit when filing taxes.
For the company, it is very important to get acknowledgement receipt of the payment voucher by signing the payment voucher.
– Agile Pinoy
It is important for your startup business to be compliant with BIR and other regulatory requirements. Contact email@example.com for our accounting services and business registration requirements. Visit www.singlesprintsolutions.com for other services.