Know What Negotiation For Accountants Looks Like

There are many misconceptions about negotiation. Estate agents like to call themselves ‘negotiators’, yet in house sales they rarely do anything, except discount the price of the property. Many salesmen describe themselves as negotiators. So what is it? Is it a Dutch auction which starts high and goes lower? Is it another word for selling? These are very common misconceptions. In fact negotiation is none of these. A simple dictionary definition describes negotiation as ‘discussing or bargaining in order to reach agreement’.

Negotiation is a transaction in which both parties have a veto on the final outcome. It requires voluntary consent on both sides. It is a give and take process where the actual conditions of a transaction are agreed. It is the act or process of bargaining to reach a mutually acceptable agreement or objective. It requires movement on both sides – real or perceived.

Why do we negotiate? Simply because if we don’t we will not get the best deals available to us. One thing I can promise you is, if your firm doesn’t negotiate, you are already losing money. The reality is of course that lot’s of people in business simply do not negotiate they simply make agreement the best they can and it costs them every single time. Just last week, a senior manager from one of the world’s leading software companies called me and said this,’ Reading your material I realised that our team of sellers never negotiate, they just close the deal. We are losing large sums of money every month just because no-one has taught us a better way, can you come and help us?’

Know What Negotiation For Accountants is Not!

Negotiation is not selling. That is a mistaken assumption and one that was made by the software company we just mentioned. Negotiation begins when the sale has been adequately made.

The simple test is the way accountant & client or accountant & supplier relate to each other. In the selling phase, one person is persuading, the other is being persuaded. In true negotiation, the attitude of both is the same – both want to reach agreement. The question is no longer whether to buy or not? The question becomes, ‘On what terms can I buy or sell?’

Negotiation assumes that there is already an established desire to buy and an ability to supply. The whole emphasis moves towards cost or profit implications and specific terms or arrangements.

Negotiation is not ‘giving in’ or conceding. Concession can imply surrender on another person’s terms. If we view negotiation as surrendering it will condition our thinking, our approach will be weak and our deals will not be effective. That does not mean we won’t move in our negotiation – we will. But our movement must never be giving in or moving ‘one way’.

Negotiation is not about digging our heels in. If we are inflexible we will be met by equal inflexibility. Showing our strength, and wanting to appear tough are not the same as good negotiation. They can reflect our own insecurity and will either lead to immediate deadlock, or they will be exploited by our counterpart, and rightly so. Negotiation doesn’t just relate to agreeing terms in the buying process it can also relate to disputed ownership or late/non payment.