Getting Paid In Business In Japan
Nothing happens in commerce without a sale being made. Great to know that, but what about being paid for the sale? Now, in some countries this can be an issue. We find ourselves swimming with sharks who are transactional in their thinking and have no hesitation in ripping us off. Fortunately, Japan isn’t in that category.
We have rule of law here in Japan, plus a very healthy moral code. Japanese people abide by the law, they line up nicely for trains and buses, there is hardly any road rage, they consider others and they don’t take other people’s belongings. You are not going to get your bag or phone stolen by some expert Japanese gang who have the lift sequence down pat.
You see those videos from foreign countries, where they work as team, one distracts you, one lifts the bag off your shoulder, one then receives the bag and makes off with it, one scouts for the constabulary. This isn’t a fear here in Japan.
If you drop your wallet, the chances are the wallet, cash and credit cards etc., are all intact at a police box because it has been handed in. I have had that experience. Or you might find it sitting on a ledge, in a prominent position so you can easily find it when you go looking, after discovering you have misplaced it. I dropped some a key holder near my house and sure enough, even a few days later it was still sitting there for me to find.
Now this is not a nation of 127 million saints. Yes there are yakuza, petty criminals, housebreakers, con men and other assorted scoundrels operating here. However, it is a lot better than most other places and this spills over into the way business is conducted. We have been operating our business now for ten years and have never had a bad debt. You will get paid in Japan, unless you are particularly unlucky.
The issue here isn’t so much about getting paid, as it is about when you get paid. Cash flow is always of strong interest to small and medium sized companies and the timing can be crucial at different times. If sales haven’t been all that great and the expenses are as high as ever, not getting the payment when you expect it, can put pressure on the cash flow. Run out of cash and you are out of business pretty promptly. Reputation for reliability in business is very important here. Lose that and people won’t work with you ever again. You are toast.
Counter intuitively, the worst payers in Japan are the biggest players. The giant multi-nationals have clever CFOs who have worked out they can screw the small guys and make them wait for 60 days or more before they have to pay them. This is might against right and you have to take it, if your want to do business with them. We take it.
Japanese major corporates pay you in thirty days for the most part. Japanese domestic companies sometimes have tricky conditions though. If your invoice isn’t received by the 12thor the 15th of the month, then it won’t get paid until the end of the next month. Or they will not accept an invoice, until the goods or services have been received, so no payment in advance possibility. Or they find a minor mistake in the way you have captured the company name or the name of the person on the invoice is wrong and the accounting department won’t accept the invoice. You have to re-issue it and the whole payment process timings starts from that date. Very picky at times, but all of this adds up to delays around when you get the money.
So when starting a business relationship with a buyer you have to ask the key questions: do you have any protocols about advance versus subsequent payment; do you have any specifications about by which date in the month the invoice has to be lodged; how long are your payment terms? You need to know these things for your own cash flow planning.
The good news is you will get paid in Japan and the bad new is you may not get paid as fast as you need it.
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About The Author
Dr. Greg Story: President, Dale Carnegie Training Japan
Author of Japan Sales Mastery, the Amazon #1 Bestseller on selling in Japan and the first book on the subject in the last thirty years.
In the course of his career Dr. Greg Story has moved from the academic world, to consulting, investments, trade representation, international diplomacy, retail banking and people development. Growing up in Brisbane, Australia he never imagined he would have a Ph.D. in Japanese decision-making and become a 30 year veteran of Japan.
A committed lifelong learner, through his published articles in the American, British and European Chamber journals, his videos and podcasts “THE Leadership Japan Series”, "THE Sales Japan series", THE Presentations Japan Series", he is a thought leader in the four critical areas for business people: leadership, communication, sales and presentations. Dr. Story is a popular keynote speaker, executive coach and trainer.
Since 1971, he has been a disciple of traditional Shitoryu Karate and is currently a 6th Dan. Bunbu Ryodo (文武両道-both pen & sword) is his mantra and he applies martial art philosophies and strategies to business.
