The Rise and Fall of Bench Accounting: Lessons for Small Business Owners

Imagine waking up one morning to find your entire financial history—years of bookkeeping and tax data—vanished.

That’s the nightmare 35,000 businesses faced on December 27, 2024, when Bench Accounting, once a leader in the bookkeeping industry, abruptly shut down its platform. There was no warning, no backup plan—just chaos. Customers were told to file IRS extensions and scramble to download their data by March. For thousands of small business owners, it was already too late.

Social media exploded with posts like, “As a customer, I’m pissed off.” Many were left wondering how a company that raised over $113 million could collapse so suddenly.

So, what happened? How did Bench go from being an industry leader to a cautionary tale of startup failure?

The Dream That Started It All

To understand Bench’s downfall, we need to rewind to its beginning—a story of big dreams and even bigger ambitions. Founded in 2012 by Ian Crosby and a small team in Vancouver, Bench aimed to simplify bookkeeping for small businesses. For a time, it succeeded.

Bench was one of the first companies to pair professional bookkeeping with cloud-based software. Their promise? Accurate financials and total peace of mind. They delivered, offering an easy-to-use platform and pairing customers with dedicated bookkeepers.

By 2024, Bench had over 35,000 customers across the U.S. and partnerships with giants like Shopify, completing over one million months of bookkeeping. With $113 million in funding from investors like Bain Capital and Shopify, Bench seemed unstoppable.

Cracks Beneath the Surface

Rapid success often hides underlying issues, and for Bench, those cracks began forming in late 2021. Ian Crosby, the passionate co-founder, clashed with the board over strategy. While Crosby wanted to focus on tools for small businesses and partnerships like Shopify, the board envisioned a different direction. Crosby stepped away entirely, and with him went the heart and vision that had driven Bench.

Without its founder, Bench lost its special touch. By 2023, the cracks were impossible to ignore. Customers complained about declining service quality. One former customer described their books as “garbage,” while another said they spent more time fixing Bench’s mistakes than running their own business.

The Collapse

Even with $113 million in funding, Bench couldn’t turn a profit. They spent heavily on customer acquisition, paying for top spots on Google Ads and offering unsustainably low prices. Operational struggles and unqualified staff compounded the problem.

On December 27, 2024, Bench abruptly announced its shutdown. Thousands of businesses scrambled to retrieve their data. Adding to the confusion, just days later, Bench revealed it had been acquired by Employer.com, a company focusing on HR tech like payroll and onboarding.

Lessons from Bench’s Fall

The rise and fall of Bench Accounting is more than just a cautionary tale for startups—it’s a wake-up call for small business owners. Here are the key takeaways:

1. Backup Your Data: Always have local and cloud backups of your financial data. Don’t rely solely on third-party platforms.

2. Vet Your Service Providers: Ensure your bookkeeping service employs qualified professionals.

3. Stay Informed: Keep an eye on the financial health and leadership of companies you depend on.

As for Bench Accounting, only time will tell if its acquisition by Employer.com can restore trust. Meanwhile, for small businesses, it’s a stark reminder of the importance of due diligence.

What are your thoughts on Bench’s story? Would you trust them under new management? Share your thoughts in the YouTube video comment section. See you in the next blog post!