Choosing the right umbrella company to work with is a crucial task for contractors. After all, an umbrella company is there to support the contractor with things such as salary, tax, statutory benefits, insurance and admin, so it's essential that you know what to look for in an umbrella company to find the best one.
To help, this guide, Umbrella Search outlines common mistakes every contractor should avoid when finding an umbrella company so that you can make the right decision for you.
Basing a decision on low fees alone
We know choosing an umbrella company with the lowest fees can be tempting. After all, this means more money in your pocket at the end of each month.
However, it's important to note that a lower fee doesn't always mean better service. A low fee may mean that the umbrella company is charging just for essential services, meaning you are missing out on other services you would benefit from.
In turn, you may end up paying more in additional fees for the extras, which will actually cost you more in the long run.
For example, let’s say you need help with pension contributions, but this isn't covered by the fee you pay to the umbrella company. You may then end up paying more for help and advice on this in the future, meaning you are more out of pocket than if you chose a company that included this in their fee in the first place.
Failing to compare services and benefits
Contractors should remember that not all umbrella companies are the same.
Although each functions in the same way, the services and benefits they offer can vary greatly. That's why it's so important to compare and contrast companies to choose one that provides you with the necessary services and benefits.
For example, some umbrella companies will provide services beyond the basic, such as additional levels of insurance coverage or same-day payments. These benefits will significantly impact your contracting life, so it’s important to evaluate what you need and find a company that caters to it.
Check payroll frequency
Another important factor that is often overlooked by contractors is how often the umbrella company runs their payroll.
Umbrella companies can run their payroll once a week, fortnightly or monthly, and this will determine how often you get paid. Let's say you prefer to be paid weekly; you must ensure that your chosen umbrella provider runs their payroll each week.
You should also check that there are no issues or bottlenecks in place that can lead to delays in getting paid. For example, if the umbrella company requires paper copies of your timesheet then this may lead to delays in everything going through in time.
Ignoring insurance
Insurance is extremely important for contractors however many contractors overlook it as an afterthought. However, having the right insurance is a legal requirement for contractors, so it's important that you ensure that your umbrella company can cover you with the correct policies.
Although every umbrella company will cover the contractor with basic levels of insurance, such as professional indemnity insurance and public liability insurance, some contractors require additional types of coverage depending on the contract they are working on. For example, some contractors may work on site and therefore need more or specific types of cover.
That’s why it’s important to check what insurance the umbrella company has on offer, and what options they provide for extra cover. You should also look at the coverage limits and whether this will suit you.
Again, choosing an umbrella company that can provide you with the right type of insurance from the outset will save you a lot of time and money in the long run, meaning it’s not something you have to think about again and the cost will be covered in your umbrella company fee.
Take the next steps with Umbrella Search
Having read our guide, contractors will know that to find the best umbrella company for their needs, they need to avoid the temptation of choosing the cheapest company without checking that they do everything they need first, take the time to do their research on reviews, check that they offer the services and benefits the contractor needs, check insurance and check their payroll frequency.
If you need more help finding the best umbrella company for your needs, Umbrella Search can help to take the hard work and time off your hands. Our friendly team will work closely with you to understand your contracting needs in order to find an umbrella company that's just right for you.
We will do the hard work and due diligence needed, giving you one less thing to worry about. To find out how we can help you, and to take the first step to finding your perfect umbrella company, get in touch with the team today.
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