Accounting Services

Accounting Services

Brief Excerpt from Industry Overview Chapter:

Companies in this industry provide services such as auditing, bookkeeping, payroll processing, and tax return preparation. Leading companies include ADP, H&R Block, and Paychex (all based in the US). Major companies that have international operations include the "Big Four" accounting firms: Ernst & Young and PricewaterhouseCoopers (both based in the UK); as well as Deloitte Tohmatsu Group (Japan); and KPMG (the Netherlands).

COMPETITIVE LANDSCAPE

Demand for accounting services depends on new business formations, the increasing complexity of corporate business, and personal income. The profitability of individual firms depends on the right?mix of services?and?effective marketing. Large firms have advantages in providing wider ranges of services to large corporate clients and having the resources to serve customers with many locations. Small firms can compete effectively by specializing and providing superior service. The US industry is?concentrated: the 50 largest US companies account for just less than 50% of revenue.

PRODUCTS, OPERATIONS & TECHNOLOGY

Tax preparation and representation account for 30% of the industry revenue. Financial auditing account for about 25%. Other services include payroll services (about 20%), general accounting (more than 10%), and bookkeeping and compilation (more than 10%). Some accountants have branched into accounting-related information technology consulting, business consulting, and personal financial planning. Small business owners often rely heavily on their accounting firms for advice.