Managing Client-Managed Contractors

⚠️ Contractor invoice and payment deadlines: late action means late payment

• Contractors: submit invoices by the 19th of each month. A saved draft is not a submitted invoice.
• Admins: approve invoices by the 21st of each month. Submission alone does not authorize payment.
• Funding: Toku must receive cleared funds 4 - 5 business days before payout. Initiating a transfer or sending proof of payment does not meet the deadline.
• Standard monthly payout: the last day of the month, provided submission, approval, and funding deadlines are met. Late submission, approval, or funding will delay payment. Every day of delay pushes payment back by at least one day. A missed payment cycle can cause a longer delay; the invoice due date is not a guarantee of payment.

Automation does not remove these deadlines. Earlier published holiday deadlines take precedence; see Toku: 2026 End-of-Year Payroll & Payment Guide.

Client-Managed Contractors are contractors you contract with directly — they don't sign a consulting agreement with Toku. Instead, you use the Toku platform as your HRIS and to approve their invoices and expenses, and Toku handles paying them on your behalf.

Because these contractors are managed directly by you, the onboarding and ongoing management of these contractors is owned by your team end-to-end. Toku's role is to provide the platform and to process payments - we're here to support you with anything technical, but the day-to-day relationship, contracting, and management of the contractor sits with you. This article walks through exactly what that looks like so you know what to expect at each stage.

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What you're responsible for (and what Toku handles)

💡 A quick note on support: Client-Managed Contractors do not receive HR support from the Toku team. These contractors are managed directly by you. Toku is always happy to help with any technical or platform questions - just reach out and we'll get you sorted.

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1. Onboarding a Client-Managed Contractor

Choose invoice automation before review

When adding a contractor through People → Add People, complete Contract, then choose invoice preferences on Invoices before Review. This step appears for Client Managed and Agent of Record contractors; available options depend on the contract and your organization’s settings.

1. In Set up invoice automation, choose Automatic invoice creation, Automatic invoice submission, and Automatic invoice approval independently.

1. Click Continue to review to keep your choices, or Set up later to defer configuration and preserve your organization’s defaults. Leaving all three choices off and continuing explicitly saves manual preferences.

1. On Review & Confirm, check Invoice preferences and click Add contractor to save. Use Edit invoice preferences or Back to revisit earlier steps without losing your entries.

Automatic creation waits until onboarding is complete and the first cycle is eligible; the monthly cutoff is the 19th (UTC), inclusive. Hourly invoices need hours entered manually, submission waits for complete payout details, and automatic approval still follows your organization’s rules and amount limits.

See the illustrated contractor onboarding walkthrough.

When you add a Client-Managed Contractor to Toku, they're automatically invited to the platform to fill out their details and provide the tax forms we need in order to pay them.

Once the contractor has submitted their information, it's up to you to review those details and move them to Onboarded. Here's how:

1. Log in to your Toku account and open the Onboarding tab.
2. Click on the Client-Managed Contractor's name to open their profile.
3. Review everything the contractor has submitted (see the checklist below).
4. Once everything looks complete and accurate, click the blue Complete Onboarding button to finalize. After you click Complete Onboarding, the contractor is moved to Onboarded and their onboarding is complete.

Before you complete onboarding, confirm:

• [ ] Banking or wallet details are on file
• [ ] An address is on file
• [ ] The tax form has been completed and signed

💡 Sending your own agreement? If you'd like the contractor to sign your own contract, they can sign it and upload it to their Documents section in the platform. This is optional and managed entirely by you.

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2. Invoicing and payment

Once a contractor is onboarded, the monthly payment cycle works like this:

1. The contractor submits their invoice by the 19th of the month.
2. You review and approve invoices by the 21st of the month.
3. A consolidated invoice is sent to admins a few business days after all approvals are complete.
4. You fund the payment so Toku can release it to the contractor on the last day of the month.

⚠️ Funding deadline: Toku must receive cleared funds 4 - 5 business days before the last-day-of-month payout. Payment will be delayed for each day that invoice submission, admin approval, or funding is late. A missed payment cycle can cause a longer delay.

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3. Auto-invoicing (optional)

You can choose invoice automation while adding the contractor, after Contract and before Review. Creation, submission, and approval are independent preferences; selecting automatic creation alone does not submit or approve the invoice.

To turn auto-invoicing on or off:

1. Go to Settings.
2. Click Contractor Settings.
3. Toggle the auto-approval and auto-submission options on or off. A few things to know about auto-invoicing:

• The auto-submitted invoice appears on the 1st of the month, giving you a few weeks to review and make any adjustments before it's approved.
• The contractor can retract a submitted invoice and make changes at any point up until it has been approved.
• Once an invoice has been admin-approved, changes can no longer be made in-platform. If a correction is needed after approval, reach out to Toku and we'll help get the invoice corrected before payment is released.

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4. Terminating a Client-Managed Contractor

When you're ready to end a contractor's engagement:

1. Go to the People tab and select People Directory.
2. Click on the contractor's name.
3. Click the red Terminate Employee button to move the contractor to Inactive. Moving a contractor to Inactive stops all auto-submission invoices going forward.

💡 Tip: Before terminating, make sure any final invoice has been submitted, approved, and funded so the contractor's last payment isn't delayed.

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Support

Client-Managed Contractors are managed directly by your team, so Toku does not provide HR support for them. We do, however, provide platform and technical support whenever you need it. If you run into anything in the platform - onboarding, invoicing, settings, or payments - please reach out and our team will be glad to help.

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