Prices are forecast to continue rising as the number of businesses, corporate profitability and international trade grow
Los Angeles, California (PRWEB) December 31, 2014
Accounting services have a buyer power score of 3.2 out of 5, indicating that buyers have moderately strong negotiating power due to a favorable recent price trend, supplier competition and high profit margins. According to IBISWorld market research analyst, Jesse Chiang, "Buyer power is weakened due to moderate product specialization and a lack of service substitutes."
The price for accounting services has not been volatile, which has also strengthened buyer power. "Despite rising labor costs and demand for services in the three years to 2014 prices have not grown rapidly," says Chiang. Suppliers must compete intensely to earn revenue because of this market's low barriers to entry, which allows a large number of accounting firms to offer accounting services. The consequently high competition tempers potential price growth. Thus, buyers can avoid long-term contracts and reassess their supplier regularly, without risking significant price shifts. Additionally, suppliers have had high profit margins that are forecast to rise. As such, suppliers are more willing to negotiate prices. Major vendors in the market include Deloitte, PricewaterhouseCoopers and Ernst & Young.
Nonetheless, moderate product specialization and a lack of substitutes have weakened buyer power. Accounting services are the same across suppliers, but performance varies depending on business model, industry and size. As a result, services are specialized because they require professional expertise and experience. Suppliers can charge premiums for their qualifications because demand for their services has continued to grow. Moderate specialization damages buyer power somewhat. Additionally, buyers cannot exercise leverage with substitutes. The only alternative is to implement in-house accounting services, which is time consuming and costly.
Buyers can bundle services or invest in a long-term contract to improve their negotiation positions. Oftentimes, suppliers offer related services, such as tax and payroll accounting. Buyers can source these services through one supplier to receive discounts. Although buyers are in a position to avoid long-term contracts, they could gain more benefits if they agree to one, such as developing close relationships with suppliers that result in discounted 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 include small, midsize and large accounting firms that employ accounting professionals that often have Certified Public Account certification. Buyers are private or public companies, nonprofit organizations, as well as federal, state and local governments. This report does not include auditing services, bookkeeping services, billing services, tax accounting, payroll accounting or 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.