Impact of Bench’s Shutdown: Finding the Right Bookkeeping Solution

Published: Jan 8, 2025
By: John Delalio; Kira Heizer; Ryan Keating
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Bench Accounting, a software based bookkeeping service for small businesses, abruptly closed on December 27, 2024. A few days later, on December 30, 2024, Bench announced it was acquired by employer.com. This unexpected shutdown and subsequent reopening have left customers scrambling to find alternative solutions to manage their financial operations.

The Impact on Customers

The sudden closure of Bench Accounting left customers in a panic, especially during the holiday season. If Bench had remained closed, customers would have faced several significant challenges.

Customers would have needed to retrieve their financial information with minimal support from Bench. They also would have had to quickly select a new accounting service or system to avoid future issues. These two tasks would have been further complicated with the January busy season. Generally, firms providing accounting services are extremely busy during this time taking care of the needs of their existing customers, closing the year, estimating tax payments, and filing 1099s. The outsourced accounting community is filled with strong, caring providers who would have done their best to help. Without, there could be very limited time to get things done.

Tax compliance would have been critical, as businesses still needed to make sales tax and estimated tax payments on time despite the closure. Explaining the situation to investors and dealing with potential valuation impacts would have added to the stress. There was also the risk of violating bank covenants due to the inability to produce proper reports. All these challenges would have had to be addressed while operating the business during December and the first quarter of 2025, potentially impacting sales, and productivity.

Why Pairing Software with a Personalized Advisor/Bookkeeper Matters

The ultimate problem with automated accounting services, like Bench, is two-fold.

This kind of automated, ‘self-driving’ service was provided on a proprietary software platform maintained by one company. When the business shuts down, so does the software. Additionally, since the software is proprietary, it might be very difficult to migrate to another system without the help of the provider.
To keep the price point low, many other self-driving bookkeeping solutions are designed to be automated solutions that do not require human intervention, essentially software without service. However, business accounting is always nuanced and cannot be automated. As the adage goes, you get what you pay for. Not investing enough in accurate accounting can create serious problems for the future success of a business.

There is no substitute for a reputable accounting firm. With an emphasis on meeting regulatory and ethical standards, partnering with a public accounting firm provides:

Reduced Risk

Customized Support

Adaptability and Growth

Compliance

An experienced financial advisor will provide accurate financial data and important insights to support the strategic growth of the company and help plan for future cash and funding needs.

Best Practices for Business Accounting

To maintain the continued viability of your accounting records, there are critical steps to take:

Place your accounting data in a sustainable software or service

Start by putting your accounting on software that you own and control. Look for reputable vendors like QuickBooks, Xero, Sage, and NetSuite. These companies have been operating profitably for decades and are very sustainable, given their large customer base.

Find an experienced, knowledgeable advisor

Find a reputable accountant or bookkeeper to maintain accounting records. An accounting firm that knows your business, industry, and several software systems is preferred to an individual bookkeeper with limited knowledge and resources. Always be prepared for a disaster.

People often think of computer systems as infallible, but they are not. Things happen, and disasters happen. Although it might be challenging, it is vital always to back up financial systems periodically. It is recommended that data be backed up as often as possible, whether it be once a month or every quarter, but at minimum, every organization should back up data at least once a year.

Get More Than a Software Only Solution

The sudden closure of Bench Accounting has created significant challenges for its users, and happily the company was purchased so their clients have a lifeline. However, this should serve as a timely reminder for all businesses to take proactive steps to secure financial data: