Bench Accounting's Sudden Closure: Impact and Implications for Small Businesses

In a shocking development that has sent ripples through the small business community, Bench Accounting, self-described as North America's largest bookkeeping service for small businesses, announced its immediate closure on December 27, 2024. This abrupt shutdown, coming just days before the year's end, has left over 12,000 U.S.-based customers scrambling for alternatives and hundreds of employees suddenly without jobs.

The Immediate Impact

The timing of this closure couldn't be more challenging for small businesses. With year-end accounting procedures and tax preparation season approaching, thousands of companies must now rapidly pivot to find alternative solutions. Bench's platform became inaccessible as of Friday, December 27, leaving many businesses without access to their regular bookkeeping services.

Critical Timeline for Affected Businesses

• December 30, 2024: Deadline for Bench to provide instructions on data access

• March 7, 2025: Final date for customers to download their financial data and documents

• Q1 2025: Critical period for businesses to transition to new bookkeeping services

What Businesses Need to Know

Data Access and Retention

Bench has committed to providing customers access to their financial data until March 7, 2025. This includes:

• Current and prior year-end financials

• Uploaded documents such as receipts and bank statements

• All historical bookkeeping records

Immediate Actions Required

1. Watch for data access instructions (coming by December 30)

2. File for tax extensions to accommodate the transition

3. Download and secure all financial data and documents

4. Begin the search for alternative bookkeeping services

Behind the Closure: A Tale of Corporate Governance

The story behind Bench's closure reveals a cautionary tale about startup governance and the relationship between founders and venture capital. Despite having secured US$113 million in investor funding and building a substantial customer base, internal conflicts appear to have contributed to the company's demise.

Former CEO and co-founder Ian Crosby, who left the company three years ago, provided insight into the company's struggles. According to Crosby, disagreements with the board over strategic direction led to his departure in 2021. His concerns about the new direction were echoed by Kaz Nejatian, COO of Bench investor Shopify, who attributed the failure to "bad investors" who replaced the founder with "so-called professionals."

Industry Response and Available Alternatives

The bookkeeping industry has responded quickly to the situation. Companies like Acuity and Better Bookkeeping have already reached out to former Bench clients, offering their services. This rapid response from competitors provides some hope for affected businesses, though the transition period will likely present challenges. If you are a photographer that has been let down by Bench we would love to work with you here at Bastian Accounting you can take our [service quiz]

Looking Forward: Lessons and Implications

This situation highlights several critical considerations for both small businesses and the broader tech industry:

1. The importance of data ownership and backup procedures

2. The need for contingency plans in critical business services

3. The potential risks of depending solely on venture-backed tech platforms

4. The ongoing debate about founder control versus institutional investor influence

Next Steps for Affected Businesses

If your business is affected by the Bench closure, consider these immediate steps:

1. Document Access and Backup

   • Set a reminder for the March 7, 2025 deadline

   • Plan to download all available data as soon as access is granted

   • Create multiple backups of all downloaded information

2. Tax Preparation

   • File for tax extensions immediately

   • Gather all relevant financial documents

   • Consider engaging a tax professional for guidance during the transition

3. Service Transition

   • Research alternative bookkeeping services

   • Consider both traditional and digital-first options

   • Verify data migration capabilities of potential new providers

4. Financial Planning

   • Review any automatic payments or subscriptions linked to Bench

   • Update payment and banking information with new providers

   • Consider temporary manual bookkeeping procedures during the transition

Conclusion

The sudden closure of Bench Accounting serves as a reminder of the vulnerabilities that can exist in the modern business services ecosystem. While the immediate impact is significant, affected businesses have a clear, though limited, window to secure their data and transition to new services. The key will be acting quickly and methodically to ensure continuity of financial operations.

We will continue to monitor this situation and provide updates as more information becomes available. For immediate assistance or questions about managing this transition, please reach out to our team.