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07-02-2015 12:24 PM

This is a good supplement . In the context of relevance of Community - Technology Solutions & Practices , it is intended to focus on a brief on Technical Connect required on the part of Cost & Management Accountant for Price Negotiations ( to start with Suppliers ) touching on tangible proximate tech areas like quality checks in process after the component or material is put into production. These have to be foreseen at the time of technical bid evaluation where equivalent specs are allowed as a part of tender terms. In the context stated above, this is one of the starting steps for optimization ( without prejudice to overall value capture)
It is also felt that it would be better when General Parameters - Perceived value for the intended purpose !,Minimisation of Cash Flows, sustainability , value capture ....are briefly illustrated for better appreciation as we say we should not miss Trees for wood and vice versa.

07-02-2015 05:19 AM

Pricing negotiations are to be seen from two perspectives . One perspective is buying side and the second one is from Selling side. In both the cases, Key drivers or elements, for pricing include - the perceived value for the intended purpose, sustainability, minimisation of cashflows. CMAs can add value in pricing with his or her analytical skills, ability to understand the touch points for value capture and the processes for measuring its performance. Competitive quotations and such other processes can only deliver the price efficiency which is important but suboptimal value capture.

Price Negotiations

By Anand Jammalamadaka posted 07-01-2015 01:57 PM

  
Adequate Technical Skills are necessary inputs to a management accountant when he is involved as a part of Finance Team in negotiations with suppliers and customers. This is more relevant in organisations with advanced technolog y projects and products . Comparison ,often , becomes difficult among the suppliers when concept of equivalence is brought in against the original specs . Also quality of the material or component some times can be proved only in process and not at the time of procurement. Supplier selection at the tech bid evaluation stage unless properly done , would result in higher procurement costs and customer rejections . This may invite an audit comment of proprietary nature.It may be noted that Commercial ( Financial) Evaluation comes only later after Technical evaluation .
This is to highlight the technical connect required on the part of a Cost and Management Accountant
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