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Negotiating For Accountants Needs a Framework

24th Jun 2013
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Negotiating For Accountants Needs a Framework

Count the COST

Great gain is to be had from negotiating, but only if the task is done effectively. There is a cost in terms of resolve, priorities, time, preparation, forward planning. At the heart of effective negotiation, there has to be a calculation of what is involved and the price has to be paid, usually before the negotiation begins.

When I train I use the word 'COST' as an acronym. It acts as a useful memory jog reminding us of the four ingredients that represent the practical outworking of the cost involved; Commitment Objective Strategy Tactics.

Commitment

Commitment to the negotiation process is required. This applies to negotiation as an overall process. It also applies specifically to a particular negotiation in hand. A half-hearted approach can never be effective in negotiation. There must be a serious commitment to achieving the result you want. If you are serious then you will be taken seriously, if you are casual then you will be taken casually.

In my experience, most accountants do not have true commitment to the negotiation process . What typically happens is that negotiation gets the odd few moments, the remnants of our time. To be effective we need to settle the issue that negotiation is going to require pre-determined amounts of time and resource.

Overall commitment

We must determine overall what our practice goals are, and determine what levels of profit, volume, price, saving or improvement we are aiming for. This requires thinking through the key areas.

Commitment to a particular negotiation in hand

I was eating at an Indian restaurant as part of a group which someone else had responsibility for. During the process of ordering, one person said, ‘Let's ask for a special deal before we order and try to get a good selection for £10 each.’ The leader of the party was unsure. Essentially, he was uncomfortable with the suggestion, so a vague proposal was made something like, ' We would like 10 per cent discount please'. There was no commitment in the request and the waiter said nothing. Nothing was agreed.

The approach was treated casually because that's exactly what it was. When the bill was presented at the end, there was no discount. When pressed, the waiter simply said that the manager was away and he had no authority to give discount. The meal cost nearly £20 per head. It cost us all because there was no commitment to the negotiation. It was treated hopefully ,casually, and therefore without authority.

OBJECTIVE for accountants in their negotiation

Once the issue of commitment is settled we must have clear objectives. Otherwise we will invariably settle for less than we need to. Not being sure of what we want is a common reason for getting poor negotiated results. Ask for more and you get more, ask for less and you get less. If you don't have clear objectives you won't know where to aim, and in every negotiation you will end up 'shooting from the hip'. This will always reduce your authority and will also leave you feeling less than confident . You will get less.

Objectives for your company

We need to establish clearly what our company objectives are,One legitimate objective would be for a partner or branch manager, to aim to reduce overall costs by 15 per cent while improving specific elements of supply. On the other hand, the same partner or manager could have an objective of increasing the value of every client by 10 per cent.

STRATEGY for accountants negotiating

Strategy for the company

Once we have clear objectives for our firm or practice we must then put a strategy in place. Our strategy is simply a series of pre-planned steps which enable us to realise those objectives. In other words, we know exactly what to do, when to do it and how, in order to achieve what we have set ourselves. In broad terms it will include:

    • Defining which person or people are responsible for the negotiation process
    • Training the person or people responsible for the negotiation process
    • Planning for negotiation with existing long-term business relationships
    • Putting times in the diary for review meetings with customers/suppliers
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