Contractors, get ready to put Fintech to work for you
With its unparalleled day rates, finance was always the profitable ‘go-to’ sector for contractors wanting to make themselves richer, but Financial Services is changing in ways that will make your life easier too, writes Ivo Weevers, CEO of bookkeeping app Albert.
And that’s overdue, because it’s far from easy today when it comes to the non-laughing matter of getting your finances right as a contractor. By ‘contractor’ I don’t just mean the high-end IT consultant with an IFA, tax adviser and accountant on-hand. The average plumber, for example, has to process scores of invoices a week, which can take a couple of hours, usually on the weekend, because that affords the most time to format and mail invoices, file receipts, log expenses, reconcile bank accounts and prepare material for a book-keeper.
Like the high-end consultant, a plumber faces many reporting obligations to HMRC and the like, meaning demands on his or her time as a self-employed professional have, arguably, never been higher.
Change is afoot
That’s the bad news but the good news, in our view, is that the financial sector is changing its attitudes towards the self-employed, whatever your profession or trade as a contractor. Mainstream banks have traditionally focused on mainstream customers, yet as society individualises and smaller groups require special attention, large organisations have started working with innovative, smaller start-up fintechs to serve these groups in entirely new ways.
Brand new financial technology firms have appeared (and are still appearing), brimming full of good ideas and a refreshingly positive approach to finance. There is a genuine movement underway to tap into a mobile workforce with connected, mobile financial apps that can be accessed ‘on the move’. Contractors and freelancers are the beneficiaries of such new ways of thinking.
We’re a good example of the movement. Two years ago we didn’t exist. Today, with just a simple download taking a matter of seconds, our users can invoice and expense ‘on the go,’ photograph and index expenses; track and monitor an invoice, even set an alert to buzz when the invoice has been received or opened! That age-old excuse of a customer saying your invoice has not been received just got sent packing.
We're not alone
Of course, we’re not alone in the revolution. Swedish financial well-being app Tink is one of dozens of great new ideas, a brilliant platform that shows where a customer has spent his or her cash -- on rent, transport, fun etc. It’s designed, rather like our own bookkeeping app, to provide better financial well-being.
Apps-makers in this space are proud that your smartphone can manage your finances in ways that were not even possible just a few years ago. Plus, ‘ease’ and ‘speed’ are typically among the guiding build-principles. This is a welcome change against a backdrop of reporting-compliance burdens that are already at dizzy heights, as are the time constraints of contractor -- plumber or techie.
Not only are banks working with start-ups to find new ways to cater for new audiences, but they are also changing the way they relate to their customers more widely. You may have heard the term ‘Open Banking,’ and this represents a watermark in the transformation of financial services, of which you need to be aware because you can benefit. Barely six months old, it’s a set of rules laid down by the financial watchdog that require the big banks to share data with competing third parties, most of them new-breed apps like us, and other cutting-edge financial B2B providers.
The idea is to make it easier for new thinking to transform a stale market, and it does so by shifting the balance of power from the bank back to you, enabling you to engage with these smart new-breed financial providers with your own personal financial data, and benefit from all manner of emerging aggregated business services based around data-sharing models. It’s still new, but it’s worth looking into, because before long you will be able to shop for new financial products and services in the same way you hunt down a good insurance deal on Confused.
So while it sounds futuristic, change is here today. Financial apps are available for all, connecting you with your customers, your banks and a successful, entrepreneurial future. That’s fintech's aim, and in our case, it’s also to provide the user with a helpful experience to do their bookkeeping. We even help you keep the cost of hiring that accountant in check, with reports in a single tap so you can get rid of the shoe box under the bed, full of old receipts.
So while you might not sit in an office surrounded by colleagues, you’re part of a growing army of ‘determined,’ ‘problem-solving,’ self-employed ‘risk-takers’ at the heart of the UK’s industrial strategy. You’ll continue to see bank branches closing, cheques being phased out and government clampdowns in financial areas.
But check out digital channels to find new apps; ask your bank about its commitment to Open Banking, explore the latest products from the all-new ‘challenger’ banks and before long, you will find a host of financial innovations spread at your feet, waiting to enrich your contracting career.