As the 2024 tax season loomed, thousands of small businesses found themselves in a crisis, owing to the abrupt shutdown of Bench Accounting—a Vancouver-based, VC-backed bookkeeping platform serving over 11,000 clients across the U.S.
On December 27, 2024, Bench announced it was ceasing operations immediately, triggering widespread panic among American business owners who heavily relied on the platform to manage their finances and prepare for tax filings.
Tax season chaos: Locked out at the worst time
For Bench users, who are mainly small business owners, the shutdown couldn’t have come at a worse time. With year-end financial statements critical for tax filing deadlines and hesitation around Bench Accounting alternatives, business owners were suddenly left without access to vital records.
A brief announcement on Bench’s website advised users to download their financial data by March 7, 2025, but that left many wondering if they could file their taxes on time.
“I was a customer, and I am just praying that Bench honors the promise to have our accounting data available so we can transfer it all to a new CPA firm,” said u/Potential_Job_1048 on Reddit.
Others shared their frustration over pre-paid annual subscriptions with no immediate recourse.
“They charged me around $3500 on Dec 12th. I was going through onboarding and now can’t contact anyone. Want my money back for sure.” – u/nlbuilds.
Prepaid fees, no guarantee of service
Unfortunately, the poor timing isn’t the only factor putting business owners in this state of crisis. Numerous customers reported that they had recently paid for 2024 services in full, expecting Bench to handle their bookkeeping through tax season. Instead, they were met with silence.
“I’m still fighting to get the charges reversed. They had no right to charge me for a service they knew they wouldn’t deliver,” one Bench user wrote.
For small businesses that had entrusted Bench with tax preparation, the shutdown could seriously jeopardize their ability to meet IRS deadlines and avoid costly penalties.
“The reports were often late, and reconciling them to reality felt like a guessing game. Tax season became a nightmare,” u/anon_bizowner explained.
Vendor lock-in and the risk to financial data
Beyond the disruption to tax filings, Bench’s abrupt closure highlighted the dangers of relying on proprietary software that locks clients out during unexpected shutdowns.
Some clients reported years of accounting records inaccessible, further complicating tax preparation.
“Years of my company’s tax and accounting records are still locked on their platform. I’ve never seen anyone shut down like that. It’s crazy!” said Justin Metros, CTO of Radiator.
The lack of clear communication and access left businesses scrambling to secure alternative bookkeepers—right in the middle of one of the busiest financial periods of the year.
“Bench shutting down without warning during tax season? That’s just unforgivable. Customers deserve better,” said u/anon_businessowner.
Employer.com’s last-minute acquisition
Days after the announcement, Employer.com, a San Francisco-based HR tech company, acquired Bench’s assets. While this acquisition aimed to calm panic, it did little to rebuild trust and resolve immediate tax-related concerns.
“They just emailed me two weeks ago about how happy they were to now be integrated into Square Payroll, so I set that up. Now I’m left figuring out what to do next with zero support,” one customer shared.
Employer.com assured customers they would restore access to Bench’s platform, but for businesses racing to prepare taxes, the damage had already been done.
“I doubt they’ll actually hire anyone back, but imagine how messed up it would’ve been if I got hired and then was let go days after signing,” remarked u/danshu83.
Internal struggles and customer fallout
According to many, Bench’s struggles had been evident long before the shutdown. Former employees revealed operational inefficiencies, a lack of automation, and high employee turnover, contributing to the eventual collapse.
“They relied too heavily on manual bookkeeping with little automation. Leadership ignored the real issues,” wrote Camel_and_Bleep, a former Bench employee.
Bench’s failure reflects deeper issues in its business model and leadership. Despite raising over $113 million in venture funding, the company never really achieved operational profitability.
“They were ultimately a bookkeeping service that underpaid their staff and tried to cut corners to scale,” another former employee said.
Bench’s reliance on cash-basis accounting and limited support for accrual accounting alienated growing businesses needing more sophisticated solutions. This left SMBs reliant on a system that couldn’t scale alongside their needs.
“Most small businesses only need a single bookkeeper. Outsourcing bookkeeping to these services isn’t much cheaper and is far less reliable,” shared u/TheCardholder.
What can small businesses do now?
For business owners impacted by the shutdown, immediate action is critical to ensure tax compliance:
- Download financial data now – If you haven’t already, access your Bench data by visiting data.bench.co and downloading all available records before March 7, 2025.
- File for an extension – Consider filing a six-month IRS extension to buy more time to sort out records and find a replacement service.
- Hire a CPA or bookkeeper – Look for bookkeepers who can manage tax filings and offer accrual-based accounting to avoid similar pitfalls.
Bench alternatives to consider
As SMBs search for reliable Bench Accounting alternatives, platforms that prioritize data accessibility, transparency, and non-proprietary systems stand out:
- QuickBooks Live – Hands-on bookkeeping supported by certified QuickBooks professionals.
- CoCountant – A full-service bookkeeping and accounting service with dedicated professionals handling books directly within QuickBooks.
- Xero – Comprehensive cloud-based accounting, ideal for growing businesses.
- FreshBooks – User-friendly accounting for freelancers and small businesses.
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