Effective negotiation skills are critical when hiring a CEO or salesperson who deals with major contracts on a regular basis. Yet these skills aren’t necessarily at the forefront when looking for a bookkeeper or controller to “count the beans” at your organization.
Mastery of the fundamentals of negotiating is essential for accountants, too — whether interacting with customers, working with vendors or managing employees. Here are three steps to help your accounting team develop more effective negotiation skills.
1. Build rapport
The first step in a negotiation is to establish rapport with the other party. While rapport is hard to measure, it’s a close and positive connection between individuals, underpinned by trust. Ways to establish and maintain rapport include:
- Asking open-ended questions and avoiding interruptions,
- Restating key points to demonstrate interest in what the other party said,
- Paying close attention to your tone of voice and word usage, and
- Maintaining eye contact, smiling and being mindful of nonverbal cues, such as crossed arms, that may send subtle yet noticeable signals of your level of engagement.
If you want someone to trust you, that person must feel like they’re being heard and not judged or looked down upon. While building rapport, it can also help to communicate your commitment to engaging in an ethical negotiation. This signals to the other party that you value integrity and sets the foundation for a transparent and respectful discussion.
For example, rapport building is critical when making collections calls. Your company’s employees should start with a calm, friendly email or phone call, reminding the customer of the invoice amount and due date. If that doesn’t work, consider scheduling a video conference call to reinforce positive nonverbal signs that you understand the reasons for the delay and are willing to work with the customer, possibly even waiving late fees. Speak calmly and keep the conversation polite. If the customer isn’t responsive and a major payment is delayed beyond 45 days, it may be time to consult with upper management about how to proceed.
2. Look for the “win-win”
When negotiating, it’s easy to view the exercise as a win-lose proposition, meaning only one person can win and the other must lose. While some negotiations can produce just one winner, in many cases, it’s possible to collaborate and reach a mutually beneficial outcome.
To make a “win-win” scenario a reality, both parties should share what’s important to them. This requires looking at a potential negotiation from multiple angles.
For example, when negotiating a long-term contract with a potential supplier, obvious focal points are duration, price and payment terms. However, your negotiation also should incorporate less-obvious elements, such as service, delivery and how they view collaboration. And don’t overlook the power of data. For example, sharing inventory data with your suppliers can help them anticipate upcoming orders and minimize delays. Companies that are willing to collaborate with key supply chain partners may be able to negotiate lower prices and receive better service, including access to more-experienced, responsible representatives.
3. Practice, practice, practice
From collections and billing disputes to budgets and loan refinancing, negotiating accounting matters can be challenging. However, with practice and a focus on transparency and honesty, your accounting team can build trust, communicate openly and arrive at mutually beneficial agreements with third parties and in-house stakeholders. Contact us for help mentoring your accounting team in the art of effective negotiation.
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, accounting, legal or tax advice. The services of an appropriate professional should be sought regarding your individual situation.