Bench Accounting

What's Happening with Bench Accounting? A Sudden Shutdown Analysis

Introduction

The Canadian fintech scene is reeling from the abrupt closure of Bench Accounting, a Vancouver-based startup that provided online bookkeeping services to small businesses. This unexpected shutdown, occurring right before tax season, has left thousands of small business owners scrambling for alternatives and potentially facing significant disruptions to their financial operations. This article delves into the verified details surrounding the closure, provides background context, analyzes the immediate impact, and explores the possible future implications of this significant event.

Official Coverage: A Detailed Analysis of News Reports

The sudden closure of Bench Accounting is primarily confirmed by two reliable news sources: Techcouver.com and GeekWire. These reports offer critical insights into the circumstances surrounding the shutdown.

• Techcouver.com: In their report, "Bench Accounting Abruptly Shuts Down Ahead of Tax Season...," Techcouver highlights the timing of the shutdown as particularly problematic, noting the proximity to tax season. This detail underscores the potential difficulties faced by Bench's clients who relied on the platform for their financial management. Techcouver is identified as an online publication providing real-time reporting and analysis of emerging technology news in Vancouver and throughout British Columbia, adding to the credibility of their reporting.

• GeekWire: GeekWire's article, "Vancouver fintech company Bench Accounting announces sudden...," confirms the company's headquarters in Vancouver, B.C., and that Bench served thousands of small businesses. The article includes a photo of Bench Accounting CEO Jean-Philippe Durrios, providing a personal connection to the news. This report emphasizes the scale of the company's operations and the widespread impact of its closure. GeekWire also notes that Bench Accounting is a startup.

Both sources emphasize the "sudden" and "abrupt" nature of the shutdown, suggesting that the closure was not a planned or gradual process. This lack of warning is a crucial factor in understanding the disruption caused to Bench's customers and employees.

Background Context: Unverified Information & Company History

While the official news reports provide the core facts, additional context gleaned from search results helps paint a fuller picture of Bench Accounting. It's important to note that the following information is based on search results and may not be fully verified.

• Founding and Early Days: Bench was co-founded by Ian Crosby in 2012, and initially operated as 10sheet Inc. before rebranding to Bench Accounting. The company also participated in the TechStars accelerator program in New York. This history reveals a company that started with a strong foundation and gained early traction.

• Service Description: Bench offered software-as-a-service (SaaS) for small and medium-sized businesses, providing online bookkeeping services. According to information found on its now-shuttered website, Bench combined automated software with human support, offering monthly financial statements and expense overviews. The company aimed to simplify small business accounting and reduce stress for business owners.

• Customer Base: The company stated it served 11,000 small business owners across the US. This signifies a substantial customer base that is now left without a key service provider.

• Employee Base: Bench reportedly employed over 600 people in downtown Vancouver and had received $113 million US in investor funding, suggesting a significant operation with considerable financial backing. While the company hasn’t officially confirmed layoffs, several former employees have reported job losses on LinkedIn. This aspect highlights the human cost of the shutdown, affecting not only customers but also employees.

This background information reveals that Bench was a well-established and well-funded company with a large customer and employee base. Its sudden closure is, therefore, all the more surprising and disruptive.

Impact Analysis: Immediate Consequences of the Shutdown

The verified news reports, combined with the additional context, reveal several immediate impacts of Bench Accounting's closure:

• Disruption for Small Businesses: The most significant impact is the disruption to the operations of the thousands of small businesses that relied on Bench for their accounting services. The timing of the shutdown, just before tax season, is particularly problematic. These businesses now face the challenge of finding alternative solutions quickly while also preparing for their tax obligations. This could lead to increased stress, financial uncertainty, and potential errors in their financial reporting.

• Loss of Access to Financial Data: Customers have reportedly lost access to their financial data, which is a critical issue for ongoing business operations and tax preparation. This loss of access is a major concern for small businesses that relied on Bench as their primary system for managing finances.

• Job Losses: Although not officially confirmed by Bench, the reported layoffs of hundreds of employees represent a significant blow to the Vancouver tech community and the individuals affected. The abrupt nature of the shutdown has likely left many employees without sufficient notice or support.

• Erosion of Trust: The sudden nature of the shutdown will erode trust in online accounting services and, potentially, in the broader fintech sector. Small business owners may be more hesitant to rely on cloud-based solutions after this experience.

These impacts are severe and widespread, particularly affecting small businesses already navigating a challenging economic environment.

Future Implications: Looking Ahead After Bench's Collapse

The sudden closure of Bench Accounting raises several important questions about the future of the online accounting sector and the broader fintech landscape. The official reports and background information suggest the following future implications:

• Increased Scrutiny of Fintech Startups: The Bench Accounting situation will likely lead to increased scrutiny of fintech startups, particularly those offering services to small businesses. Investors and customers may become more cautious about the viability and long-term sustainability of such companies.

• Need for Stronger Customer Protection: The lack of warning and the loss of customer data highlight the need for stronger customer protection measures in the fintech sector. Regulators may need to consider new rules to ensure that customers are not left vulnerable in the event of a sudden business closure.

• Opportunities for Competitors: While the closure is negative for the industry overall, it also creates opportunities for other online accounting service providers. Competitors may see an influx of new customers seeking alternatives to Bench. This could lead to increased competition and innovation in the sector.

• Re-evaluation of Business Models: The demise of Bench may prompt a re-evaluation of the business models used by fintech companies. Sustainable growth and financial stability will likely become more important considerations for investors and customers.

The closure of Bench Accounting is a significant event that will have lasting consequences for the fintech sector and the small businesses it serves. It underscores the importance of responsible business practices, customer protection, and the need for careful evaluation of the risks associated with any service provider, particularly in the rapidly evolving technology sector. The future will likely see a more cautious approach to online financial services, with a stronger emphasis on security, stability, and transparent communication.