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Negotiating Contracts – New Insights to Get Better Results for Your Clients - Blog

Negotiating Contracts – New Insights to Get Better Results for Your Clients

Negotiating Contracts – New Insights to Get Better Results for Your Clients

As a freelance accountant your skills can be employed in diverse contexts. Giving input into contract negotiations is one context in which you may need to exercise your expertise.

Your input is going to take on a different form depending on the kind of contract that your client is negotiating. Here are a few contexts in which you may operate, and a methodology that you can adopt to investigate whether there is room to improve your client’s position in the negotiation

As a freelance accountant your skills can be employed in diverse contexts. Giving input into contract negotiations is one context in which you may need to exercise your expertise.

Your input is going to take on a different form depending on the kind of contract that your client is negotiating. Here are a few contexts in which you may operate, and a methodology that you can adopt to investigate whether there is room to improve your client’s position in the negotiation.

 

Clearing away the irrational

 

As an accountant, you have direct access to your client’s financial position, and a close understanding of what would constitute a benefit to the current and future state of their business. Your contributions to a contract negotiation in which, for instance, your client is looking to take over assets, or a company, is to establish whether the valuations posted by the opposing party in the negotiation accurately reflects reality.

Your role in a negotiation must be as the grounding voice, the sceptic. If you’re experienced in working as an accountant for entrepreneurs, you’ll know that very often their success rides on their ability to see past the risks involved in a venture. Embracing risk is precisely what sets the entrepreneur apart from the crowd.

 

Balance risk perspectives

 

This risk-taking tendency is the entrepreneur’s advantage, but it is also the source of their downfall. They may be blind to certain risks, or may misjudge the utility of certain deals.

So, when you’re approached by a client to assist with a contract, it is essential that you first understand your client’s logic about the deal. There may, for instance, be motivating factors that go beyond immediate economically rational concerns – agreeing to purchase a particular asset may put your client in favourable standing with a group of people that may benefit their business in the long-run.

Once you’ve a fair understanding of your client’s position, you can extend your focus to the negotiation seen as a whole.

 

Time is money

 

Consider the time-frame in which the negotiation is being played out. On the face of it, both parties may want to signal that they can afford to let the negotiation play out indefinitely. It may be the case that the opposing party may be under time-sensitive pressures – if this is the case, you can use this information to drive down prices in the case of an acquisition. Conversely, if your client’s position is weaker with regards to time, you may be able to act to give the appearance that this is not the case, to make your client’s position more robust in the face of renegotiation.

 

Play your role

 

It’s your role to cast your sober, sceptical eye over the propositions contained in the draft contract. This ‘sober’ role can be used to your client’s advantage. Your client may wish to convey an impression of keenness and willingness to negotiate at all costs, in spite of sharing your scepticism over certain aspects of the contract under negotiation. You can thus play a contrastive role, personifying you client’s risk-averse side – the ‘bad cop’ to your client’s ‘good cop’.

Ultimately, your most important role is to gauge whether the deal is worth it for your client, financially. If you notice inflated figures, or speculative valuations, this discovery can benefit your client’s interests in two ways – first, it prevents them from paying over the odds, and, second, it may give an indication that there may be more room for manoeuvre in other aspects of the contract.