Accountants Face Competition from Other Industries
Posted in the Business News Forum
Since: Jul 13
Jurong East, Singapore
#1 Jul 25, 2013
source: http://westhillconsulting.as ia/
Competition is mounting for accountants from similar service providers that are cannibalizing key clients. westhill consulting
In 2013, more firms will offer accounting services in response to rebounding demand, especially from finance and insurance companies. In particular, competition is escalating from various industries, including software publishing, management consulting, payroll services, bookkeeping and the legal profession. As a result, the accounting services industry will face several challenges in the five years to 2018. However, as firms familiarize themselves with the competition, they will be able to hedge these threats to gain a competitive edge.
Enterprise resource planning software, which includes accounting functions such as general ledger and billing, is becoming cheaper and easier to use in a variety of businesses. As a result, the business analytics and enterprise software publishing industrys revenue is expected to rise 3.1 percent to $26.9 billion in 2013. Not only is such software increasingly user friendly and affordable for small enterprises, but large businesses are also using these products for particular in-house needs. Therefore, these products have started to become viable substitutes for traditional accounting services, especially as prices for traditional accounting services will continue to rise with demand in 2013.
Although demand will continue to rise for all kinds of accounting services, prices for software will decline as development costs are shared among more users. During the next three years, IBISWorld forecasts the average license price of ERP software to decline at an annualized rate of 2.1 percent. The value proposition of ERP software is high and will only increase as its functionality converges with other enterprise software categories to create a single enterprise-wide system.
In particular, rising demand for accounting services will provide additional incentives for ERP software providers to add accounting functionality to their software capabilities, which will be a selling point for potential clients. Consequently, software with built-in accounting functions is expected to increasingly compete with traditional accounting services, dragging their prices down.
As more businesses integrate software and systems to streamline interdepartmental functions, they are increasingly demanding solutions to better manage such systems across multiple departments. This has resulted in a push to train specialist management consultants in a variety of fields so they can provide a range of services to clients, allowing the management consulting industry to compete with firms in other industries, including accounting.
Competition is anticipated to escalate for the management consulting industry, leading companies to broaden their service offerings to include those of the accounting services industry. As corporate profit recovers, so will the prospects for the all-inclusive services of the management consulting industry. Driven by increasing corporate spending in 2013, revenue is expected to rise 5.4 percent during the year to total $171.9 billion.
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