The US accounting services industry includes about 100,000 firms with combined annual revenue of about $125 billion. Major companies include "Big Four" accounting firms Deloitte Touche Tohmatsu, PricewaterhouseCoopers, KPMG, and Ernst & Young, as well as payroll services providers Automatic Data Processing (ADP), Paychex and tax preparer H&R Block. The industry is fragmented: the 50 largest companies hold just less than 50 percent of the market.
The global accounting services industry has revenues of more than $200 billion. Like the US, the worldwide market is dominated by the Big Four accounting firms.
Besides offices of certified public accountants, the industry includes firms that provide bookkeeping, payroll, tax preparation, and other accounting services.
COMPETITIVE LANDSCAPE
Demand for accounting services depends on new business formations, the increasing complexity of corporate business, and higher 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 industry is labor-intensive: average annual revenue per worker is about $135,000.
PRODUCTS, OPERATIONS & TECHNOLOGY
Major services include payroll, tax preparation, auditing, bookkeeping, tax consulting, and general accounting. Payroll services account for 25 percent of industry revenue, tax preparation for 20 percent, and auditing for 15 percent. Bookkeeping represents 10 percent of industry ...
