As the economy continues to rebound, businesses are expected to grow in number and become more globalized, contributing to rising demand
Los Angeles, California (PRWEB) December 22, 2013
Tax accounting services have a buyer power score of 2.7 out of 5.0. The higher the score, the better negotiating conditions for buyers. Buyers have a moderate amount of negotiating power with suppliers of tax accounting services due to the high concentration of suppliers, financial stability of vendors and low price volatility. There are an estimated 200,000 suppliers of tax accounting services, creating heavy competition among suppliers. Small-business buyers have better negotiating conditions than medium to large businesses because small businesses can purchase tax accounting services from suppliers that are more consumer-oriented, such as H&R Block. Because they are competing with so many other similar businesses, they consumer-based suppliers more willing to negotiate prices to attract new clients. Additionally, these suppliers and larger suppliers are, on average, financially stable; the average vendor is not at risk of bankruptcy, which raises the buyer's confidence during the selection process. “Because there are many qualified, financially stable suppliers to choose from, competition is intensified and buyer power is further increased,” according to IBISWorld procurement analyst Caitlin Newsom. Other major vendors include Deloitte, Ernst & Young, KPMG and PricewaterhouseCoopers. While prices for this service have been rising during the past three years, prices are not volatile. This low volatility helps give buyers an edge because they can switch suppliers without worrying that prices will spike after their contract expires.
However, moderate switching costs hinder the buyer's ability to renegotiate the services' price for the following year. Additionally, “prices are expected to continue rising during the three years to 2016 as the economy recovers,” says Newsom. The growing number of businesses has been driving demand for tax accounting services, allowing suppliers to increase prices, thus lowering buyer negotiating power. Furthermore, buyers have limited options for tax preparation outside of in-house tax accounting or tax software (for smaller businesses), and this low availability of substitutes also hampers buyer power.
For more information, visit IBISWorld’s tax accounting services procurement research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of tax accounting services. While traditional accounting services focus on the assemblage of public financial statements, tax accounting services focus on taxes. Specifically, vendors help buyers adhere to the Internal Revenue Code while minimizing taxes paid. This report does not include audit services, bookkeeping, payroll accounting, financial accounting, or billing services.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
Vendor Financial Benchmarks
Buying Lead Time
Key RFP Elements
Buyer Power Factors
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IBISWorld is one of the world's leading publishers of business intelligence, specializing in Industry research and Procurement research. Since 1971, IBISWorld has provided thoroughly researched, accurate and current business information. With an extensive online portfolio, valued for its depth and scope, IBISWorld’s procurement research reports equip clients with the insight necessary to make better purchasing decisions, faster. Headquartered in Los Angeles, IBISWorld Procurement serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.