Reflecting on Bench Accounting
The recent closure of Bench Accounting is a moment to reflect on its impact and draw lessons from its rise and fall. Bench transformed small business bookkeeping by combining software-driven automation with human expertise, but its challenges underline the complexities of sustaining innovation in a rapidly evolving industry.
I remember attending the Deloitte Fast50 awards in 2018 as a recipient and Bench Accounting was very high on that fastest growing company list.
There was a certain hype around them, an up-and-coming disruptor in an antiquated profession that was going to conquer the SMB market.
It was exciting to see technology being evolved in the antiquated profession I was a part of. But I also knew the years of training, business knowledge, and client relationships needed to produce value in the accounting world.
Bench’s Contribution to the Industry
Bench was more than a bookkeeping service. Founded in 2012, it quickly became a trusted partner for small business owners, offering a hybrid model of dedicated bookkeepers supported by intuitive software. For entrepreneurs juggling multiple priorities, Bench was a lifeline—simplifying financial management and delivering insights that made running a business less daunting.
Its influence went beyond clients. Bench raised the bar for what small business financial software could be: intuitive, accessible, and user-focused. It reframed bookkeeping as a strategic growth enabler rather than a compliance burden. Bench also gave freelance bookkeepers the tools to scale their work, influencing the broader gig economy for financial professionals. The concept of subscription-based accounting services was pioneered by Bench, and now individual professionals and Top 100 firms alike have created CAS practices predicated on the idea of a subscription offering.
The Challenges Bench Couldn’t Overcome
Despite its pioneering approach, Bench struggled to sustain its momentum. While the company hasn’t disclosed full details, several challenges stand out:
- Scaling a High-Touch Model
Bench’s hybrid service model, while valuable, was expensive. Relying on human bookkeepers alongside software created cost pressures that made scaling profitability elusive.
- Costly Customer Acquisition
Building a recognizable brand isn’t cheap. Bench’s marketing was effective, but high acquisition costs outpaced revenue growth, straining its margins.
- Competition and Market Evolution
Platforms like QuickBooks Online and Xero, backed by automation and integrations, gained traction. Their lower price points and flexibility attracted small businesses, putting pressure on Bench’s model.
- Economic Realities
In challenging economic times, Bench’s small business clients likely trimmed non-essential spending, including outsourced bookkeeping. This further eroded its revenue base.
Lessons for the Industry
Bench’s story offers valuable insights for accounting professionals and software providers:
- Prioritize Sustainable Innovation
Creativity is crucial, but scalability matters. Firms must find delivery models that align customer value with profitability.
- Stand Out in a Crowded Market
Differentiation is key. Companies must articulate a clear value proposition while staying agile to meet evolving demands.
- Anticipate Customer Growth
Entrepreneurs’ needs change as their businesses grow. Providers must stay ahead by delivering solutions that scale seamlessly.
- Blend Technology with Expertise
Automation enhances efficiency, but human judgment is irreplaceable. Successful models strike the right balance between the two.
- Champion Financial Literacy
Educating clients empowers them. Providers that prioritize financial literacy build trust and loyalty, driving long-term relationships.
Moving Forward
I think this is a lesson that technology in these professional service industries (which I have also learned from my time in MarTech) need to be focused on enabling the professional to do what they do best: translate data into insights faster with a personal connection, and not producing the end result directly.
For those in the accounting and software sectors, the challenge is clear: learn from Bench’s successes and setbacks to create enduring solutions. By honoring its legacy of empowering entrepreneurs, we can push the industry forward, ensuring small businesses continue to thrive with the right tools and expertise.
Author: Dave Bunce
