Too often, accountants are shy of taking a leading role in a negotiation. Too many accountants are not confident enough or sufficiently aware of their strengths, and so don’t manage to exert their influence to achieve the best deals. This guide aims to set up accountants as an integral part of the negotiations process.
1. Take Negotiation Training
Too few accountants invest in growing their skills through negotiation training. In contrast, their colleagues in marketing, sales, and procurement regularly attend courses such as the open enrollment NYC negotiation training seminar.
Enrolling in a negotiation course can help accountants develop personal strengths and build confidence. A negotiation workshop equips accountants to identify the vendor’s weaknesses and maximize leverage.
2. Get Involved Early
Many times, accountants are called in to rubberstamp contracts when terms have already been agreed to. Last minute involvement limits the accountant’s power to add value and create savings for the company.
Work with the managers and leaders to make it company policy to involve accountants in sales and purchase negotiations and in approving deals with vendors. Ensure your colleagues from other departments don’t divulge too much information before you’re involved. Advise your colleagues not to let the vendor know too early that the company has a purchase deadline or that your firm is only considering that one vendor.
3. Set Reasonable Parameters
Do you need to approve purchases made by colleagues in your startup or company? If yes, then set clear parameters that your colleagues need to fulfill before a purchase is eligible for approval. Often, colleagues assume that since the set budget covers an expenditure, the purchasing staff don’t need to shop around or negotiate for better deals.
Set up training seminars to equip staff to ask the right questions. Learn how to look for and claim non-price value such as support and long-term service. Ask your colleagues to look for value-creation avenues that will bring the company some extra savings.
4. Conduct Due Diligence
The accountant can conduct due diligence when the company has demonstrated intent to make a purchase but the sales terms haven’t yet been agreed to. Conducting due diligence is the best way for the accountant to determine the value of a purchase and the long-term benefits and risks associated with the deal.
Due diligence will equip the accountant with access to important and confidential information. The gathered information may impact on the value and viability of the deal. Depending on the type of contract being discussed, some pertinent information the accountant may need to gather includes:
- Income statements
- Taxation records
- Excise and custom duty
- Accounts payable and receivable
- Shipping, handling, and haulage costs
- Utility accounts
- Privacy details (e.g. trading partners, union issues, ownership details, etc.)
- Licensing issues
- Lease arrangements
- Details of automated accounting systems (interoperability and integration)
5. Don’t Be Afraid to Say No
Accountants generally have the power to veto purchases. Don’t be shy about exercising your veto power. Saying ‘No’ can mean the difference between profitability and unnecessarily bleeding profits.
Too often, accountants think it might not be their place to get deeply involved in purchase decisions. More so when the purchase is for goods or services away from their expertise, such as manufacturing or engineering.
Nonetheless, with due diligence and a collaborative approach, the accountant can usually tell whether a purchase decision makes sound economic sense for the company at a particular point.
Let your colleagues clearly know your criteria for saying no to a deal. Have your team understand that the accounts department needs timely and correct information and adherence to the company’s process before any approvals are made. You can win your team’s respect in time, even if some may resent your veto power.
Negotiation is a critical skill for accountants. Whether you negotiate internally with your employer and colleagues or externally with clients, vendors, and regulators, your skills impact your effectiveness and the organization’s profitability.
To win at negotiations, accountants can benefit from negotiations training. Specialized seminars help accountants become experts at using their strengths and maximizing leverage on the seller’s weaknesses to achieve the best deals.
Getting involved early in the deal-making process ensures the accountant can add value and protect the company’s financial interests. Without due diligence, what initially seems like a perfect deal can lead to financial and operational difficulties in the future. Use your veto power to say no to terms that may be detrimental to the company’s bottom line.