Bench Accounting is Acquired - Here’s everything you need to know

On 27th December, an unexpected news came that's still shaking up the accounting industry. Bench Accounting, a company that has been a trailblazer in our space for 13 long years, is closing its doors. A few days, and they suddenly announced that Bench has been acquired by employer.com

As someone who has been in the accounting technology industry for years, I've known quite a few customers who have relied on Bench, and this led them into a frenzy - trying to figure out next steps so close to the start of tax season. 

What makes this particularly concerning is that Bench isn't just any small startup - they're a Series C company that raised over $113 million in funding. They've been building their product for almost 13 years, serving thousands of small businesses across North America. 

For now, they've shared that customers will be able to work with the same bookkeepers they know & continue using Bench’s platform.  .

But as the Co-Founder and CTO of Inkle, I'm writing this to help business owners understand what's at stake and what steps they need to take. 

I've spent the last few hours analyzing the situation, talking to affected customers, and I want to share my insights about what this means for you and your business.

Here’s a concise point-by-point summary of the recent events involving Bench Accounting:

• December 27:
  • Bench Accounting announces its shutdown, causing significant disruption in the industry.The company refers its former customers to Kick - another new player in the market.
  • Ian Crosby, founder and former CEO of Bench, shares his perspective on the situation.
• December 29:
  • Reports surface about a potential buyer for Bench.
  • Investigations suggest that the buyer is likely a new company named employer.com, noted for its appealing domain.
    
    
• December 30:
  • Bench removes its referral to Kick.
  • An acquisition announcement is posted, branding itself as an "employer.com company."
  • Less than two hours later, this acquisition announcement was taken down.
  • The referral to Kick reappears shortly after.
  • Unverified reports indicate that the acquisition process was underway but then collapsed.
  • About an hour later, Bench's website claims that the acquisition is back on track.

These rapid developments raise concerns about the stability and reliability of a company managing financial affairs.

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What Went Wrong with Bench Accounting?

The situation at Bench reflects a complex interplay of financial and operational challenges that ultimately proved insurmountable. 

Despite their impressive funding, they struggled with unsustainable operating costs related to their business model. 

This financial strain was further complicated by rapid scaling that led to service inconsistencies and customer dissatisfaction.

As someone deeply involved in the fintech space, I've seen how crucial alignment between founders and board members is for sustainable growth.

Here's our theory on the key factors that led to this situation:

1. Financial Instability: Reports show significant challenges with operating costs despite $113 million in funding
2. Operational Challenges: Service inconsistencies and unmet customer expectations
3. Leadership Conflicts: Strategic disagreements between the founders and board members

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What Does This Mean for Bench Customers?

If you're a Bench customer, you're probably feeling anxious about what this means for your business's financial management. Having worked with hundreds of customers and CPAs while building Inkle, I understand the complexity of transitioning accounting services, especially during tax season. 

Let me break down what you need to be aware of.

Act Fast Because Your Books Need Immediate Attention

This definitely puts pressure on business owners to figure out the next steps especially if you’re looking to move away from Bench. Usually, accounting firms take on new customers at the beginning of the year, and since the books will only be updated till November 2024 (mostly - one of our tax customers had not finalized the books since January 2024), it will be very difficult for the new accountant to make sense of the data till November and then complete the books for December 2024. We recommend moving to another provider as soon as your bookkeeping for 2024 is complete.

Plan Your Tax Filings Now to Avoid Penalties

The tax season is going to start in the next few days, and with bookkeeping data that may not be complete at the moment, it will be very difficult to comment on if the taxes can be filed on time. 

The important thing to note here is that even as Bench recommends folks delay tax filings, an extension is only applicable in case of a federal filing.
And, the extension only delays the filing - not the tax payment itself. So if you owe tax, you must pay by the original deadline (or face a penalty and interest).
All other non federal tax and compliance filings need to be done before the deadline.
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Here's what you need to be aware of and act on:
1. You'll need to download and secure all historical financial information
2. Tax filing deadlines remain unchanged for state and other filings
3. Entity-specific filing requirements must be documented immediately
4. You'll need to brief your new accountant on company-specific processes
5. Expect delays in the transition process due to limited support
6. Plan for additional time to train your new accounting team
7. Consider potential delays in year-end closing and tax preparations

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What Are The Next Steps Here?

With tax season approaching and the clock ticking on data access, you need a clear action plan. 

I've put together a comprehensive guide to help you navigate this change effectively.

Step 1 - Download Your Critical Financial Data Now

I can't stress this enough - your financial data is the lifeline of your business. Once you have finalized your new accounting partner, you'll need to give them access to Bench or download all your data yourself. 

Here are the essential components you must download:

• YTD balance sheet
• YTD income statement
• Last year's balance sheet
• Last year's income statement
• All-time general ledger
• Chart of accounts
• All invoices and bills

Step 2 - Start Your Search for a New Accounting Partner

In my experience at Inkle, I've learned that finding the right accounting partner isn't just about replacing services - it's about finding someone who understands your business context. Think of this as an opportunity to upgrade your financial management.

When evaluating potential partners, look for one who can handle both your immediate transition needs and long-term growth. 

Keep your options open, as many firms have limitations on how many new customers they can take on, especially during tax season.

Step 3- Prepare for Knowledge Transfer

One of the most challenging aspects of this transition will be maintaining continuity in your financial management. Your new accounting team will need to understand:

• Your specific business workflows
• Any customized accounting processes
• Historical context for previous financial decisions
• Tax filing requirements specific to your entity

While Bench is suggesting delayed tax filings, this mainly applies to federal returns. Other filing deadlines remain unchanged, making swift action crucial for maintaining compliance.

If you are looking for a solution which is a direct replacement of Bench and handles everything end to end with under control cost, choose Inkle.

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Why Choose Inkle Amongst All The Chaos?

As someone who has helped numerous businesses transition between financial platforms, I understand the stress you're feeling right now. 

That's why at Inkle, we've developed a comprehensive solution specifically designed to help Bench customers make a smooth transition. 

We've done this before, and we know exactly what you need to keep your business running without interruption.

1. Get Your Books Back on Track Quickly

The immediate challenge you're facing is getting your books updated and maintaining continuity. 

At Inkle, we've built our system to make this transition as painless as possible. Our team will:

• Help download your accounting and tax data from Bench
• Import your historical data into our platform
• Set up your entity details correctly
• Configure your personalized tax deadlines
• Connect your bank accounts seamlessly

2. Experience a More Modern Approach to Bookkeeping

During my conversations with former Bench customers, I've noticed common pain points that we've specifically addressed in our platform:

• You get direct API connections to platforms like Brex, Mercury, and Ramp
• Our dashboard provides detailed metrics that update in real-time
• Your bookkeepers are empowered with AI for accurate categorization
• You can easily download financials in Excel, including Balance Sheet, Income Statement, and General Ledger

3. Enjoy Better Communication and Support

One of the biggest challenges with Bench's shutdown is the lack of communication. We've built Inkle differently:

• Get 24-hour response time through chat, zoom, or calls
• Communicate directly with our accounting experts through Inkle Chat
• Work with a dedicated accountant who ensures timely delivery of your books
• Access both bookkeeping and tax services in one platform

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Migration Steps from Bench to Inkle

I know that moving your financial data can feel overwhelming, especially under these circumstances. 

That's why we've created a straightforward migration process that our team will guide you through every step of the way.

The transition process is designed to be as hands-off as possible for you. Here's exactly what happens when you choose to move to Inkle:

Step 1- Data Download & Transfer

Our team takes care of downloading all your accounting and tax data from Bench. You don't need to worry about missing any crucial information - we know exactly what to look for and how to organize it.

Step 2 - Smart Data Import

We then import all your historical data into Inkle's platform. Our system is designed to maintain the integrity of your financial records while making them more accessible and easier to understand.

Step 3 - Customized Setup

We'll help you set up your entity details correctly and configure personalized tax deadlines based on your business structure. This ensures you never miss important filing dates.

Step 4 - Financial Integration

Our team will help connect your bank accounts and other financial platforms, ensuring seamless data flow going forward.

Step 5 - Meet Your Team

We'll introduce you to your dedicated accounting team who will be handling your books. They'll take the time to understand your business's specific needs and accounting practices.

Step 6 - Ongoing Support

You'll receive comprehensive support on a monthly basis to ensure everything continues running smoothly after the transition. Throughout this process, you'll have access to:

• A dedicated migration specialist
• Direct communication channels for quick responses
• Clear visibility into the progress of your migration
• Expert guidance on optimizing your financial setup

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Why Migrate to Inkle from Bench?

Recently Employer.com announced the acquisition of Bench Accounting. While this might seem like a reason to wait and see what happens, I want to be straight with you about why this situation still presents significant risks for your business.

The sudden shutdown announcement, without proper transition planning for thousands of businesses, raises serious concerns about business continuity. Even with new ownership, consider these factors:

• The platform already showed signs of instability
• There's no clear communication about how services will continue
• The existing team with knowledge of your books may not be available
• Your data access is still limited until March 7th, 2025

Here's a quick comparison of what you get with each platform to help you make this decision:

The acquisition by Employer.com doesn't change the immediate challenges you're facing. 

By transitioning to Inkle now, you can ensure your business operations continue smoothly without any interruption to your financial management. 

You'll get immediate, unrestricted access to your financial data - something that's crucial for running your business effectively. Instead of waiting to see how things play out with the new ownership, you can start fresh with a platform that has already proven its stability and reliability. 

Plus, by making the switch now, you can take advantage of our special transition offers designed specifically to help Bench customers through this unexpected change.

Speaking of which, to make your transition easier, we're offering:
🎁 Free State Annual Report filing for the first year
🎁 Free 1099 (payments to US contractors) package for the first year
🎁 25% off on Inkle bookkeeping services for the first 3 months

Don't let the promise of a potential revival under new ownership put your business finances at risk. Contact us today and ensure your financial management remains stable and reliable.