Our Civil Law and its Time of Payment for Services

In March 2012, I wrote about how it  annoyed me that huge concerns insist on the long times of payment for the suppliers of services. After all, our civil law says that services are to be paid directly after they have been rendered.

With good reason:
A supplier who delivered a product can – at least to some extent – have protection through still maintaining ownership. If things go wrong, he can take hold of his product, because as long as it has not been paid, he is still legally the owner.

Of course, someone who delivers a service does not have this option, because as soon as the service has been rendered, there is nothing to take hold of. I learned that as early as during my school days at the Business Grammar School Jakob Fugger in Augsburg in the subject Economic Studies. But it seems that the law is only taken seriously where violations of same are severely punished. Otherwise they are often ignored, as described in my last article.

What “good old times” were the years around 1984 – when we founded InterFace. Siemens was our first customer. And, of course, being a newly installed entrepreneur and managing director, I told the very nice Siemens salesperson all I knew from school. In those days, the time of payment for services was four weeks (!) at Siemens and the salesperson sounded quite convincing to me when he told me how he needs those four weeks for processing and also that Siemens was the most reliable payer in all of Germany.

A short time ago, in a supervisory board meeting, we again discussed that huge customers often have extremely long times of payment. Our business consultant then told us about the law in Poland. If a rendered and approved service is not paid within a short time, the tax benefit is no longer available. And he said that this simple regulation actually works wonders as far as paying morals are concerned.

However, if the competition from Poland delivers to Germany, then this is not much help. He will still have to wait for his money. At least that is what I assume.

RMD
(Translated by EG)

P.S.
I took the picture from Wikipedia (common property; upload by Blackfish) (common property; upload by Blackfish)