The price of accounting services has been increasing at a slow annual rate because of the rising costs of wages and accounting software.
Los Angeles, CA (PRWEB) April 06, 2014
Accounting services have a buyer power score of 3.8 out of 5, indicating that buyers have greater negotiation power than suppliers. Buyer power is strengthened by recent price trends, supplier competition and profit; however, it is weakened by product specialization and a lack of service substitutes. Buyers can improve their negotiation position by sourcing accounting services from one supply or using a long-term contract, says IBISWorld analyst Donna Khuu.
The price for accounting services has not been volatile, which has strengthened buyer power. Despite the rise in labor costs and demand for services, price growth has been slow and steady. Suppliers must compete intensely to earn revenue because of the highly fragmented market, which decelerates price growth. Thus, buyers can avoid long-term contracts and reassess their supplier regularly, says Khuu. Additionally, suppliers have high profit levels that are forecast to rise as suppliers continue to focus on operational efficiency. As such, suppliers are more willing to negotiate prices. Major suppliers in this market include Ernst & Young, CBIZ Inc. and CliftonLarsonAllen LP.
Nonetheless, buyer power has been weakened by product specialization and a lack of substitutes. Accounting services are the same across suppliers, but the end service performance varies depending on the buyer's business model, industry and size. As a result, service is specialized and requires professional expertise and experience. Suppliers are able to charge a premium for their qualifications because demand for their services continues to grow. Thus, buyers have less negotiation power over price. Moreover, buyers cannot exercise leverage with less costly substitutes. The alternative is to implement in-house accounting services, but that is time consuming and costly.
Buyers can improve their negotiation position by bundling services or investing in a long-term contract. Often times, suppliers offer related services such as tax and payroll accounting. Buyers can receive discounts by sourcing these services through one supplier. Furthermore, buyers are in a position to avoid a long-term contract, but may gain more benefits if they agree to one. Buyers can, thus, develop a close relationship with suppliers and obtain discount pricing. For more information, visit IBISWorld’s Accounting Services procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of accounting services. Accounting services include financial statement preparation, valuation services, capital budgeting planning, cost accounting, accounting standards compliance and other accounting advisement services. Service providers range from small and medium to large accounting firms that employ accounting professionals who often have Certified Public Account certification. Buyers are private or public companies, nonprofit organizations, as well as federal, state and local governments. The report does not include auditing services, bookkeeping services, billing services, tax accounting, payroll accounting and inventory accounting.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
Buying Lead Time
Key RFP Elements
Buyer Power Factors
About IBISWorld Inc.
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.