As the economy continues to rebound, the number of businesses is expected to continue growing and businesses are expected to become increasingly globalized, contributing to greater demand for tax services and, thus, rising service prices
Los Angeles, CA (PRWEB) August 05, 2014
Tax accounting services have a buyer power score of 3.2 out of 5. Buyers have a moderate amount of negotiating power with tax accounting service suppliers stemming from the low market share concentration, low supply chain risks and low price volatility. There are an estimated 200,000 suppliers of tax accounting services, creating heavy competition among them. “Small-business buyers have better negotiating conditions than midsize and large businesses because small businesses can purchase tax accounting services from suppliers that are more consumer-oriented, such as H&R Block,” says IBISWorld procurement analyst Andrew Yang. “Because they are competing with so many other similar businesses, consumer-based suppliers are generally more willing to negotiate prices to attract new clients.”
On average, suppliers are financially stable and 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. The major suppliers of these services are PricewaterhouseCoopers, Deloitte, Ernst & Young and KPMG (called the Big Four). Supply chain risks are low, further ensuring that buyers can expect reliable access to tax accounting services. “While prices for this service have been rising during the past three years, prices have not been volatile,” adds Yang. “This low volatility helps buyer power because buyers do not have to worry that prices will spike after their contract expires.”
However, moderate switching costs hinder the buyer's ability to renegotiate services price for the following year. Additionally, prices are expected to continue rising during the three years to 2017 as the economy recovers. 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 further hampers buyer power. For more information, visit IBISWorld’s Tax 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 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
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.