Sorry for the delay, that last blog was quite a hard act to follow! Now… I would like to inject a bit of fun into this blog, just because I want to make you laugh in your day!
I assume a general sense of humour, and don’t wish to offend with my generalist observations. There is little to laugh at in life but our differences, and there are many!
Years ago, being terribly open-minded and non-judgmental, I started out with the assumption that everyone has roughly the same approach when it comes to business. I mistakenly thought that business, much of its strength being internationally-derived, wasn’t going to be like the movies, food, language, that it would be more impersonal somehow, because it’s business, right? That was slightly misguided! There is nothing funnier, or more fascinating, when you recognise the differences are very similar to other aspects of life, and culture. They seem to flow on the axis of what is held most important in those countries.
Versions of ‘right’
The most sensitive subject in business is the money part, and even when you do the same thing, the responses you elicit will differ hugely based upon your client’s own version of right. I started to see that this isn’t someone’s individual preferences or reaction; it is culturally-based, on expectations from their background. This even goes down to how they negotiate, whether they negotiate or just walk away, or if their style of negotiating is to be aggressive. It’s actually everything when it comes to the financial side of the relationship.
So, just taking one small part of this, the business-end…
A few years back I started to recognise there was a marked difference in the way clients dealt with invoices, and more specifically, the way in which they chose to settle them. Well I said the business end!
Way out West
Let’s start over West, the larger American clients, or those in other countries, who have very involved US HQs. The US work longer and harder than we do in Europe, (15 days holiday anyone?) but they earn more. They are likely to settle late, sometimes very late. When working with a US firm they often try to double or triple the payment terms, this is not late from invoice date, I mean late as in overdue. So make sure you factor in some penalties for late payments if this could be problematic.
Moving over the Atlantic you get to the UK. Being from the UK I can talk about the British way of doing things. We are painfully self-depreciating most of the time, as long as it’s us doing the depreciating!
In the UK it’s considered good financial management to pay invoices exactly a couple of days after the payment term ends, or in hard times, when the supplier does the chasing. This reminds me of the English reserve’d-ness and politeness – i.e. where we wouldn’t fully comply by virtue, but we also would hate to be seen as not complying, because then we would feel bad. This is so funny!
Why not take a short-cut and pay a week earlier? Because we don’t want to appear to be a mug, and nobody else does it! I love the English.
Crossing the channel and onto the French. It’s really simple with the French, it all depends on how much they like you, or also this could translate into how important in business you are, which often gets confused as the same thing! The more they value you, the better everything works. The general rule of thumb is that you need a big reputation if you want to work with French companies. If they don’t sense this, you probably won’t be able to work together; no late invoice, actually no invoice at all!
Onto the Germans, the powerhouse of the Eurozone and the biggest manufacturing nation currently supplying China… As you can expect, the Germans apply the same kind of methodical approach to running their accounts as they do to everything else. When working with German companies, you normally have bills settled either immediately or 2 weeks before the payment term ends. And why not? They have new things to deal with. Get on with the job!
Looking back now it’s funny to think I ever expected business to be void of the same kind of cultural shifts that are apparent in everything else. People make businesses, therein lies the answer! Doing good business is about understanding how people work. Good luck!