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Accounting Services Industry Profile Excerpt
| SIC Codes: 8721 NAICS Codes: 5412 Page Length: 10-12 Last Quarterly Update: 4/28/2008 View Sample Industry Profile |
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The US accounting and tax preparation industry includes about 90,000 firms with combined annual revenue of $65 billion. Large companies include PricewaterhouseCoopers, KPMG, Deloitte Touche Tohmatsu, Ernst & Young, and H&R Block. Despite concentration at the top, the industry is fragmented: the 50 largest companies hold less than 50 percent of the market. Most firms are small, with annual revenue under $1 million; large local firms may have revenue of $5 to $10 million.
COMPETITIVE LANDSCAPE
Demand for services depends on new business formations, the increasing complexity of corporate business, and higher personal income. The profitability of individual firms depends on effective marketing and the right mix of services. Large firms can provide a range of services to large corporate customers and have the resources to serve customers with many locations. Mid-sized firms can effectively compete for large customers if they have special expertise. Although the industry is labor-intensive, the high value of services produces annual revenue per employee of about $175,000 in large offices.
PRODUCTS, OPERATIONS & TECHNOLOGY
Major services include tax preparation, bookkeeping and accounting, financial auditing, and tax consulting. Tax preparation accounts for 35 percent of industry revenue, bookkeeping for 20 percent, auditing for 20 percent, tax consulting for 10 percent, and other services, including business valuations, for 15 percent. Firms may concentrate on providing services to businesses, individuals, or both. Some accountants have branched into information technology consulting, business consulting, personal financial planning, and the design and sale of tax-shelter strategies. Small business owners often rely heavily on their accounting firm for all kinds ...
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