The company is over a decade old and was not cheap to use, I don't think they could have suddenly run out of money as customers typically pay upfront and are in long term contracts. Could it be staffing issues? Corporate misbehavior? Data loss? Ransomware? Has a member of their team gone rogue? Misappropriation of funds?
We were bench customers until a few months ago, paying thousands of dollars per year for what could only be described as hundreds of dollars worth of service. The service was not very good so moving away was an easy choice but on a per-customer basis they must be making money hand over fist.
I expect we'll find out more eventually, hopefully employees will leak some insight. For now, this is inexplicable.
I'd guess staffing issues, since my bookkeeper would change every month. I'm still not sure how they couldn't afford to hire better staff, though. You're right that it could be something nefarious.
> I'm still not sure how they couldn't afford to hire better staff,
Because they never figured out how to automate enough of the process to scale revenue up without scaling expenses.
All the investments in these VC funded companies is a bet that the companies will develop automation that will allow them to not hire staff, period (relative to the growth in customers).
Im betting secured debt was called. Given the "instant" nature, it likely means a debt covenant was broken, that is one of the few things that can shut a company down in 24 hours.
Doubley so if the business isnt really profitable.
Anything is possible and running out of money is the most probable explanation but it seems so hard for this type of business to get itself into this type of situation. Customers pay thousands of dollars per year, usually upfront. That’s the type of revenue predictability that most of us would love for our businesses because it makes forecasting so much easier. They must have known months ago that they were running out of money. Failing to become sustainable and going through layoffs is one thing, shutting down overnight with zero warning is another. But yes, you’re probably right, it’s just hard to imagine how they could have imploded like this.
With all due respect to the founder, it's impossible to know, even in hindsight, whether things in a startup would have been similar, better, or worse. This is not an endorsement to firing the CEO or saying that the board was capable in any way. This founder or CEO trap is more common that we think about. It is not only a Steve Jobs story. Founders know that giving equity and power to others include risks.
I advise caution in believing his statements to be true, particularly about Bench’s board and investors. The truth will live in their financial statements, which no doubt will be revealed in bankruptcy proceedings in the coming months.
I agree that the financial statements will be a key artifact of truth + I cannot speak to the validity of the statements made by Ian as I have no context or knowledge of Bench outside of my experience of being a long time customer.
However I can, albeit anecdotally from my perspective, say that I felt there was a marked difference in Bench's quality/service/responsiveness/performance/etc about 3yrs ago. This aligns with the timeline given by the former CEO in his post for his departure.
Kick is not affiliated with Bench in any way. We've onboarded a significant number of customers from Bench onto Kick before this happened, so this may have been why were were mentioned.
We're working fast right now to try to provide resources and help Bench users migrate and will be sharing updates here: https://x.co/kickfinance
So you're planning on offering tax filings, or just recommendations? tbh this should have been included in the notice because I wrote y'all off immediately because taxes was the main pain point Bench solved for me (electing to file as an S-Corp).
A friend of mine mentioned Taxfyle as an alternative to Bench. They offer free bookkeeping migration, a free Xero subscription, dedicated bookkeeper to do your books and professional tax support where they handle your taxes too. They seem like a good fit for you! Check them out here: https://www.taxfyle.com/
I signed up to the paid account ($125 per month), added credit card details. Your system has me on free trial until early January.
I've followed all the steps required to unlock the "sorry to hear about the Bench situation" onboarding.
Now after jumping through all the hoops, I'm told that the "free onboarding" and call only happens after the payment is processed later in January.
Why wait?
It's difficult to vet your service without this assistance. Money aside, time is of the essence here.
Really hoping to be proven wrong here, but this feels like an opportunistic sales initiative that claims to be more, but is really just a "20% off for your first year" coupon code.
I tried to sign up for Kick and received an email that you don’t support my industry. Were an artist studio that makes and retails physical goods. Do you expect to support more industries soon?
While you have documentation about migrating to your platform, you don't seem to have any documented promises around export and leaving your service.
Also, it seems a bit odd to me that the "balance sheet" ability is two non-free pricing levels deep into your service. Isn't that a baseline expectation?
Not to mention all the money businesses paid in advance for services they’ll likely never get back. It’s a terrible situation—small businesses really RELY on these services, and now they’re left stranded with no clear resolution. Truly, reckless and insane.
I havent been at Bench for over 6 years but it’s always been a business on the verge of failure. The main issue was just the schizophrenic strategy that was being employed. On one hand you have a software company with useful tools and services to automate bookeeping. On the other you had a division of bookeepers that would do a lot of the manual / refinement work. These tasks are at odds with one another. If you automate things you remove power from the teams who are incentivized to scale their org charts. With LLMs, Bench should have been positioned to own this space entirely, and offer a superior or equivalent product with much better margins. Bur they decided to become a services company and not a technology company.
All I can take away from it is a few lessons, because this is a pretty awful outcome for almost every party.
This is accurate (from a former employee). They were not at odds, the platform was simply never sufficient on its own to do the books. Bookkeepers were required to fill the massive gaps.
I’m sure all of this will be played out in spectacular fashion in the courts of British Columbia in the coming months. Directors in BC are liable for unpaid wages to employees. No doubt they pulled the rug just in time to ensure people got their statutory severance. But beyond that, anyone hoping for more will have to get in a long line behind secured creditors. Man this sucks.
I'd be shocked if you didn't get reimbursed. But if you don't, let me know and Afino might be able to mitigate a portion of your losses with a friendly discount. That just ain't right.
When a company goes bankrupt, there’s a specific order that everyone who’s owed money gets paid out in. I wouldn’t be surprised if “operational costs” like refunds are low on the list.
I signed up with Capchase on a 12-month contract, too. Does this mean my contract is with Capchase and I’ll have to pay for the next 12 months even if I don’t get the service? Feels like a great scam. Sign a whole bunch of new customers in 12-month contracts and get paid upfront from Capchase in full and leave us paying off our debt to Capchase. I’m so frustrated.
Bench was a terrible service in my experience. I used it for one of my startups a few years ago. I personally invested a lot into said start-up. I checked my books and everything seemed ok. Eventually I found that they had hidden my Gusto payroll line items from view and they were no longer taken into consideration in my books. This led to a $300k shortfall from where I thought I was vs reality. Their team just shrugged when I brought the issue to their attention. The impact was immediate layoffs affecting real people who depended on me.
Sure ultimately everything falls upon me the founder. But something so common as GUSTO payroll should never be miscategorized and hidden from view.
When I was using Bench, they were only doing cash accounting (not GAAP). We had to switch to a different service when we switched over to accrual accounting.
Current (I guess now former) bench customer here. Concerned about this comment in their FAQ:
> On this website, by December 30th, you’ll be able to enter your Bench login credentials to download your current and prior year-end financials, as well as any documents you’ve uploaded such as receipts and bank statements.
This makes it sound like they are only making the year-end financials available - not the individual transactions/ledger entries. I’m concerned about this - aren’t the individual transactions required if one were to be audited? Would this create a lot of liability for their former customers?
Readit News
We were bench customers until a few months ago, paying thousands of dollars per year for what could only be described as hundreds of dollars worth of service. The service was not very good so moving away was an easy choice but on a per-customer basis they must be making money hand over fist.
I expect we'll find out more eventually, hopefully employees will leak some insight. For now, this is inexplicable.
Where did you move to?
Because they never figured out how to automate enough of the process to scale revenue up without scaling expenses.
All the investments in these VC funded companies is a bet that the companies will develop automation that will allow them to not hire staff, period (relative to the growth in customers).
Cronitor uses pilot. It was a little crazy at first but the last year+ feels like they have stabilized operations.
Doubley so if the business isnt really profitable.
The simplest explanation is usually the correct one.
https://x.com/ianwcrosby/status/1872724231999381790
https://nitter.poast.org/ianwcrosby/status/18727242319993817...
More about nitter: https://github.com/zedeus/nitter
Dead Comment
However I can, albeit anecdotally from my perspective, say that I felt there was a marked difference in Bench's quality/service/responsiveness/performance/etc about 3yrs ago. This aligns with the timeline given by the former CEO in his post for his departure.
Paying for a service and not getting what you expect, especially when it comes to your taxes is no joke.
Instead of having to start from scratch, our team at Kick is moved quickly to build these resources to help prior Bench customers:
1. Free Bench migration
2. Free 2024 Bookkeeping review calls
3. Free Daily Live Q&As (coming soon)
We’re moving fast and sharing additional resources and updates in real time here:
- https://kick.co/bench
- https://x.com/kickfinance
Other resources on the way include a Tax Extension Guide and Accountant Directory to make sure folks get a soft landing is this difficult time.
If you're running into issues, my email me at conrad@kick.co and I’ll do the best I can to route you to the right place.
Also are any of the C-Level execs from Bench involved in Kick in any way?
We're working fast right now to try to provide resources and help Bench users migrate and will be sharing updates here: https://x.co/kickfinance
I've followed all the steps required to unlock the "sorry to hear about the Bench situation" onboarding.
Now after jumping through all the hoops, I'm told that the "free onboarding" and call only happens after the payment is processed later in January.
Why wait?
It's difficult to vet your service without this assistance. Money aside, time is of the essence here.
Really hoping to be proven wrong here, but this feels like an opportunistic sales initiative that claims to be more, but is really just a "20% off for your first year" coupon code.
Also, it seems a bit odd to me that the "balance sheet" ability is two non-free pricing levels deep into your service. Isn't that a baseline expectation?
They didn't need a heads up to build this. It takes between half an hour and half a day.
No, you're not. The minimum for commitment is a longer notice.
All I can take away from it is a few lessons, because this is a pretty awful outcome for almost every party.
This is fascinating. That smells like actual fraud on their part.
Deleted Comment
Sure ultimately everything falls upon me the founder. But something so common as GUSTO payroll should never be miscategorized and hidden from view.
What sort of accounting books were being prepared where such a function is even needed?
Dead Comment
> On this website, by December 30th, you’ll be able to enter your Bench login credentials to download your current and prior year-end financials, as well as any documents you’ve uploaded such as receipts and bank statements.
This makes it sound like they are only making the year-end financials available - not the individual transactions/ledger entries. I’m concerned about this - aren’t the individual transactions required if one were to be audited? Would this create a lot of liability for their former customers?