Archives for November 2009

Finanzkrise & Notleidende Banken

The word Finanzkrise has been used in the past months to describe the state of the World economy.

But generally it is used to refer to any form of crisis in the finance markets.  It is, for example, used to describe the inflation of 1929 but also the situation in the Netherlands in the 1630s.

It was selected by the Gesellschaft für deutsche Sprache to be the “Wort des Jahres” (Word of the Year) in 2008.

Coupled with this is the “Unwort des Jahres” of the same year: Notleidene Banken.

This term is ironically used to talk about the banking situation in 2008, as many banks had to be “rescued” by their relevant national governments.

Previously many banks had been making large profits and even after the crisis were still paying their managers high bonuses, whilst at the same time accepting state help.

To hear a simple explanation and a short discussion in German, listen to the podcast:

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Zahlungsmoral: Some customers just don’t like paying

The Germans have a word for it, they call it „Zahlungsmoral“. Literally translated it means „payment morals” but a better way of saying it would be “payment culture”. People use it when they are talking about how willing people are to pay off a debt.

It is something that many German businesses have to deal with. The larger ones, of course, have employees to chase after the bad debts, but for smaller businesses and especially self-employed people like myself, it can be an additional workload that would be unnecessary if people just paid their bills as they should.

If I am doing work a client at their home, then I will usually require them to pay cash when I am finished. I tell them this in writing in advance, to avoid the “I haven’t got that amount of money” type of expressions once I’m finished. I still get that once in a while, but thankfully no longer that often.

But it does not always work like that. Businesses that I visit on a regular basis will want a bill sent to them before they pay me, so I make sure that they sign off the work that I do on each visit. Sometimes I work from home, on a website for example, so then even that is not possible.

This means trusting the client that they will pay, and they usually do. But sometimes they need a little reminder.

The “little reminder” is called a “Zahlungserinnerung” and is a sort of friendly reminder that they owe me for the work I did for them. After that you get into “Mahnstufen” – that is when you start setting deadlines by which payment has to be made. After three of these, the final step is to register the debt with the local court. If all goes well and the customer does not contest the debt, then you can pass the court documents on to a bailiff to go to collect your money.

By this time you have court costs, bailiffs’ costs, and costs for recorded delivery mail – all of which the bailiff can collect for you at the same time. But all the same, have still spent a lot of time going through this process. Time that you could have probably better spent on other projects.

Luckily, I have only had to go through the entire process once. All other debtors have paid up sometime before it got to the final stage. And after a while you get to know how your customers are. Some pay immediately, others pay on the last day before the reminder goes out, and a certain number only pay up when they receive the reminder. A handful wait for the final demand.

This is the “Zahlungsmoral”. It is often quoted by self-employed people in Germany as once of the main reasons for giving up their business, or even going abroad to find work.

Because at the end of the day, you have to eat.  Your customers may be able to put off paying you for a couple of weeks, but that just doesn’t work at the supermarket…

Cold calling

In the past few weeks I’ve noticed an increase in the amount of cold calls that we have been receiving. It strikes me a strange, as since a change to the law in Germany a few months ago the call centres now risk a fine if they do not transmit their telephone number when they call you.

This seems to have held them back somewhat for a while, but now there is no stopping them.

Recently we have been getting calls on a daily basis. Sometimes these were so-called “ping” calls, where a computer dials a lot of numbers at once and connects the first ones that answer, dropping the other lines when all the call centre agents have been assigned. Other have called us “on behalf of” a publisher – several times.

It is, of course, now a lot easier to track who is calling more than once because you can match the numbers up. I was able to therefore confront the lady telling me that I had won a weeks holiday at the Edersee with the fact that her colleague had called less than an hour beforehand to offer me something to do with mobile phones.

Furthermore, having told her that I would report her company to the telecommunications regulator if they called me again, I was able to remind her next colleague of this a few days later when she called to ask if I would like to test some new products. I also reminded her that I would be reporting her employer.

Reporting a company to the regulator is fairly straightforward. You download a form from their website and fill out as much information as you can before sending it off. I did this last week and was surprised to receive a letter back within a few days, confirming that the case would be looked into.

German companies are having a hard time finding new customers at the moment, and with consumer laws being so tight here it is not easy for them to use direct marketing methods. All the same, to cold call someone once is unfortunate, to do it three times is asking for trouble…

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