Learn what being a Client on Liquid is and how that is different than being a Vendor on Liquid.
If you’re new to Liquid, you may have some questions about the differences between being a Client and being a Vendor on Liquid.
What is a Client on Liquid?
A Client on Liquid is a United States company or United States sole proprietorship that is using Liquid to onboard, manage, and pay Vendors. If you are hiring others and paying them for their work, you are acting as a Client. Clients also use Liquid to improve compliance with independent contractor rules and regulations as well as to mitigate permanent establishment risk.
Using Contracts and Onboarding on Liquid as a Client
Clients can use Liquid with their own contracts or with Liquid’s standard templates. Clients initiate onboarding of Vendors, and at this time, only Clients can create and send contracts. For Clients to complete a custom onboarding process to engage with a specific Vendor, that onboarding process will first have to be loaded into the Client’s onboarding processes. Then, the Client would have to invite the Vendor with that specific custom process.
Work Orders and Invoices on Liquid as a Client
Clients can create and send Work Orders to their Vendors as well as accept proposals from their Vendors. Clients also use Liquid to manage and share files and URLs that are related to Work Orders. They can also upload Invoices on behalf of their Vendors. Liquid recommends that Invoices be attached to Work Orders, but Clients can also upload and pay Invoices that are not tied to any Work Orders.
Making Payments on Liquid as a Client
Clients can make payments to their vendors in the United States as well as in 175+ countries around the world, both in USD and foreign currencies. Clients can also set payment terms and take advantage of our automatic Work Order to Invoice matching before making payments. Clients can also manually mark invoices as paid (which changes the status for the Vendor) — and 1099 data will include payments you’ve made on Liquid as well as payments you’ve manually marked as paid in Liquid.
Reports and Tax Forms on Liquid as a Client
Clients also use Liquid to download 1099 data, Vendor W8 data, and Vendor W9 data. In addition, Clients also use Liquid to generate and review a wide variety of reports to help with cash forecasting, journal entries, and many other purposes.
Approvals and Other Features on Liquid as a Client
Clients can also use automated invoice processing and approvals to streamline their workflow. And many Clients integrate Liquid with QuickBooks (or use other integrations) to reduce duplicate data entry.
What is a Vendor on Liquid?
A Vendor on Liquid is an individual, sole proprietorship, or entity that has been created to invoice Clients and/or receive payments. If you perform work for others and get paid for that work, you are acting as a Vendor.
Vendors can accept Client invitations to join Liquid and must complete an IRS tax form W-8 or W-9. In addition, Vendors can send project proposals to Clients, accept Work Orders from Clients, track hours worked, send invoices to Clients, and more. Liquid recommends that Invoices be attached to Projects, but Vendors can also send Invoices to their Clients without attaching those Invoices to any specific Project. Vendors can also manually mark invoices as paid, but doing so will not notify the Client. Vendors can also use Liquid to manage and share files and URLs that are related to Projects — some Vendors choose to submit deliverables via this feature.
Vendors in the US and overseas can receive payments in Liquid, and if international, can specify their preference to be paid in USD or their local currency.
Vendors with a US address must use a US bank account. Vendors overseas must use a bank account in the country that matches the address in their Settings, and that bank account can either hold US Dollars or their local currency.
Currently, Vendors can initiate sending project proposals to Clients if they have completed the onboarding process the Client invited them to complete but cannot initiate onboarding of their Clients on their own. A Client must invite the Vendor to start the process of working together on Liquid.
Vendors cannot change payment terms on their own. Vendors must ask their Clients to change payment terms.
How/When Do I choose whether I am a Client or Vendor on Liquid?
When you are creating a business on Liquid, one of the first steps you’ll have to do is decide whether to be a Client or a Vendor. The two options are:
I’m here to hire and manage vendors
I’m here to do work and get paid
If you have created your login directly from a Client’s email invitation, you will skip this step and automatically create a Vendor.
I’m here to hire and manage vendors (select this option to be a Client)
Select this option if you are here to onboard, manage, and pay your Vendors. From standardizing your contracts to managing your Accounts Payable and paying your Vendors, we’ve made it easy for you.
I’m here to do work and get paid (select this option to be a Vendor)
Select this option if you are here to use Liquid to invoice your Clients. We’ll take you through setting up your profile to signing contracts with your Clients and getting paid.
How do I change my status between Client and Vendor?
Please make this selection carefully — once you’ve chosen to set up as a Client or a Vendor, you will not be able to change your selection without completing the setup process and then starting over (by pressing your name or avatar in the upper right corner and then clicking + add a new business in your user profile). To be clear, you cannot switch between being a Client and a Vendor once you’ve selected either option.
What if I am both a Client and Vendor?
You may create two separate businesses, one that you use as a Client and another that you use as a Vendor. You will access both entities with the same login and can quickly switch between the two entities by pressing your name or avatar in the upper right corner and selecting the appropriate entity.
The data will not be shared across the two entities. In the Vendor account, you will be restricted to doing Vendor activities (receiving payments). In the Client account, you will be restricted to doing Client activities (making payments).
I still have more questions about the differences between Clients and Vendors.
If you have more questions about the differences between Clients and Vendors or how to customize Liquid for your specific use cases, contact us anytime via support@poweredbyliquid.com or via chat.
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