Bench's sudden shutdown just days before the end of 2024 reveals deeper truths about the future of small business accounting and the risks of trying to automate away human expertise. The writing's been on the wall for companies trying to either automate everything or hiding offshored accounting behind fancy tech interfaces. Neither approach truly serves companies with their financials.
You can't just layer tech on top of bookkeeping and expect magic to happen. That's exactly what Bench got wrong with their automation-first approach, and other companies are making the same mistakes.
While you can (and should) automate repetitive tasks, successful accounting requires:
- Skilled professionals who understand your business
- Genuine relationships built on trust
- Strategic insight that goes beyond the numbers
The fact that Bench shut down three days before year-end — leaving customers scrambling during their most critical financial period — shows exactly how much they valued those relationships.
Let's explore what this means for small businesses and how we’re going to see a quick shift in the accounting industry as a whole.
The Fallout: What We're Learning
The accounting industry is buzzing with takes on Bench's closure, with customer impact estimates ranging from 11,000 to 35,000 businesses affected.
Here's the reality: Bench took a swing at solving a very real problem in a corner of the market that's chronically underserved – SMBs.
But the SMB market is different. They have unique needs that traditional solutions aren't meeting:
- Budgets are tighter than enterprise companies
- Owners wear every hat imaginable, juggling cash flow, operations, sales, and more
- Pain points are about cashflow, not GAAP compliance or financial statements (more on this later!)
Where Bench Went Wrong
Bench understood a lot of this. Their focus on automation and tech was admirable, but they made some critical mistakes:
- Overemphasis on automation – They leaned too hard on automation first over human expertise.
- Venture capital funding that demanded unrealistic growth – They raised $100MM+ on software-type valuations but were ultimately a tech-enabled managed service. Growing into that kind of valuation was always going to be a challenge.
- Unsustainable pricing in pursuit of growth – Low pricing may have driven growth, but sustaining that growth while managing the operational demands of a managed service is tough, especially with VC expectations for moonshots.
The Bigger Picture: Rethinking Small Business Accounting
This isn't just about one company's failure — it's about transforming how we serve small businesses in accounting and finance. Historically, that’s been with a CPA firm or a Fractional CFO. But those are no longer sustainable solutions for growth.
Traditional CPAs and fractional CFOs often miss the mark because they're either too expensive or focused on the wrong things, while small businesses need real-time insights and practical support for daily decisions — not just end-of-year statements.
Let’s break it down. What’s happened, and why is it no longer working?
Why Not CPA Firms or Fractional CFOs for SMB?
- CPAs – They haven't been able to serve SMBs at scale – nor do regional and national firms want to. They also often lack operational know-how.
- Fractional CFOs – Fractional CFOs focus on strategy, but that’s not what micro businesses (Bench’s core customers) need. They’re also expensive, so not the right fit for a business that simply isn't big or complex enough to justify that kind of expense.
Ignoring Product-Market Fit
The accounting industry has a long history of telling customers what they should want instead of listening to what they actually need. For decades, the industry has ignored product-market fit — and gotten away with it. Accountants are trained to focus on GAAP compliance, P&Ls, balance sheets, and fancy financial models, delivering what they think SMBs should value.
But SMBs aren’t buying fulfillment of our processes. They’re buying solutions to their pain points. Most small businesses just want help with:
- Managing daily cash flow
- Making better operational decisions
- Getting real-time insights into their business
Bench seemed to get this with their approach, yet I see too many taking this as an opportunity to double down on their conventional thinking, believing their outdated approach is the right one, standing behind the shield of credentials or fancy titles.
So how do we change that?
The Power of Productization
SMBs need clear, transparent offers that solve their biggest pain points, like cash flow. They don’t have the time to build tech stacks or manage data strategies themselves. They need managed solutions that combine automation, process efficiency, and the human element.
This isn’t about tech alone. It’s about creating an integrated product that solves real problems and empowers SMBs to make better decisions.
Software vs. Managed Services
I’ll stand by this one until I die – accounting is a services business, it's not software.
Managed services like bookkeeping and accounting don't follow a Product-Led Growth (PLG) model. Why? Because they can't be free—or even close to it. When prices are slashed or services are "discounted," the costs don't disappear. Someone is paying for it, and usually, it's the customer.
The Danger of Bargain Pricing
I've seen companies offering free months of service or bargain deals to attract Bench's displaced customers. But ask yourself this:
- How are they funding those discounts?
- What corners are they cutting?
- Who is paying the bill in the long run?
Many of these companies operate under the same venture-backed structure as Bench. And as we've seen, VC is the wrong capital for this space. Rapid growth at all costs isn't sustainable, and when the math stops working, the customer loses.
The Clock Is Ticking
Fast forward 15 years… the next generation of SMB owners will have grown up with tools like ChatGPT and a deep understanding of AI and automation. They’ll demand more — services that are efficient, tech-enabled, and seamless. They won’t tolerate inefficiencies or backward-looking deliverables.
The bar is rising, and the time to evolve is now. This isn’t validation for sticking to the status quo – it’s proof we need to move faster. SMBs will expect real-time insights, operationally seamless solutions, and services designed around their pain points.
Bench may be gone, but the opportunity they tackled is alive and well. Let’s not waste it.
What to Look for in Your Next Provider
If you're switching providers, the stakes are too high to risk repeating the same mistake. Here’s what to prioritize:
Red Flags to Watch For
Be wary of:
- Bargain pricing and free trials that seem too good to be true
- Providers focused solely on automation without human expertise
- Venture-backed companies pursuing growth at all costs
What to Look For Instead
Choose a partner who offers:
- A sustainable business model with fair pricing
- A blend of automation and human expertise
- Solutions focused on your actual pain points
- Operational support, not just compliance
The future of accounting isn't about replacing humans with technology — it's about using technology to enhance human expertise. The most successful providers will be those who:
- Use automation to handle routine tasks
- Employ skilled professionals for strategic guidance
- Build genuine relationships with their clients
- Provide real-time insights for better decision-making
Need Help Transitioning From Bench?
At Hiline, we've built something fundamentally different. We use cutting-edge tech to handle the tedious stuff, but our secret sauce is our people. We use technology to amplify our accountants' ability to provide real strategic value. That's why we're growing while others are struggling.
To those affected by Bench's shutdown – we understand this is terrible timing, and we want to help. We're offering immediate support with:
- 25%+ off our regular pricing for Bench customers
- Waived onboarding fee
- Free 2024 finance cleanup
- Free tax extension filing
- Access to the Digits platform at no additional charge
Ready to switch? Level up your financial operations here.
Remember: This moment isn't just a crisis—it's an opportunity to choose a financial partner who truly understands and supports your business needs. Take time to evaluate your options and choose a partner who will be there for the long haul.
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