Benched: What to Do When Your Bookkeeper Leaves You in the Lurch

Team Digits

Published January 22, 2025

90% Benched: What to Do When Your Bookkeeper Leaves You in the Lurch

On December 27, 2024, thousands of small businesses across the US and Canada were suddenly — and without warning — locked out of their financial data. Bench Accounting, a trusted, VC-backed bookkeeping platform, abruptly shut down, leaving its customers scrambling as year-end tax deadlines approached.

As of now, a last-minute acquisition by workplace management software company Employer.com may save the day. But things still look grim.

Employer.com has no experience in the accounting space (it also threw its hat into the ring to acquire TikTok), Bench’s employees were all laid off, and customers are uncertain about whether they will get their information back.

So, what happens next?

What should those directly affected do? What should other businesses take away from this?

As a company working in fintech, we want to share our thoughts on what’s happened — why what Bench did was so wrong, how it will likely affect the industry, and what small business owners should do with tax deadlines approaching.

What happened at Bench?

If you were affected by Bench’s shutdown, you probably don’t need this recap. But, for everyone else, here’s a quick TL;DR on what happened and when:

• December 27, 2024: Bench Accounting abruptly shuts down. Customers lose access to financial data, and 613 employees are laid off without notice or severance.
• December 28, 2024: Media outlets begin reporting on the shutdown, sparking widespread attention. Customers suddenly need to find alternative bookkeeping solutions.
• December 30, 2024: Employer.com announces plans to acquire Bench Accounting, aiming to restore services for customers and rehire many employees.
• January 6, 2025: Employer.com completes the acquisition, confirming it will honor existing customer contracts and resume operations.

As of right now, it's unclear how smoothly this transition will go and whether Bench will be able to pick up where it left off. Although affected customers can hope for the best, it would be prudent to prepare for the worst.

What Bench’s closure means for small business owners and fintech as a whole

Bench’s sudden shutdown has left small businesses and the fintech industry grappling with its fallout. Here’s what it means for both groups moving forward.

Lost access

First and foremost, Bench’s shutdown has, at least temporarily, shut small business owners out of their own financial data. This sudden loss of access has created significant disruptions for businesses that relied on Bench to manage their bookkeeping. Without these records, it will be difficult for businesses to:

• File taxes
• Secure loans
• Conduct audits

To regain access to their data, customers now need to provide consent to Employer.com to transfer their financial records to its platform. Initially, this consent process included clauses waiving refunds for prepaid services, which led to frustration and backlash from customers. While the clause has since been removed, the consent requirement has left many feeling uneasy, particularly as it forces businesses to engage with a company they might not yet fully trust.

Employer.com’s acquisition of Bench does offer some hope for restoring access, but the abrupt shutdown and the contentious consent process have left many questioning whether their interests are truly being prioritized.

Challenges during tax season

For small business owners, the timing of Bench’s shutdown couldn’t have been worse. With tax deadlines starting as early as March 16, 2025 for some businesses, many people are worried about being able to prepare filings without access to their bookkeeping data.

Without critical financial records, meeting tax obligations becomes a logistical nightmare. Businesses rely on accurate and complete documents to file returns, including:

• Profit and loss statements: Essential for calculating taxable income and understanding your business’s financial performance.
• Balance sheets: Necessary for reconciling assets, liabilities, and equity to ensure accuracy in your filings.
• Transaction histories: Key for tracking deductible expenses, revenue sources, and payments made throughout the year.
• Previous records: Important for referencing prior filings, carryover deductions, or other compliance requirements.

Without these records, small business owners may struggle to file accurate returns, respond to IRS inquiries or audits, or claim deductions tied to specific financial activities.

For businesses operating on tight margins and limited resources, the added delays and potential penalties only compound the stress of tax season. Acting quickly to retrieve or reconstruct missing data is critical to staying compliant and avoiding unnecessary financial strain.

Broader implications for the fintech industry

Bench’s sudden shutdown isn’t just a blow to its customers — it’s a blow to the trust businesses and people place in the entire fintech industry. When a prominent player collapses without warning, it raises unsettling questions about the industry’s reliability and its ability to deliver on its promises.

At its core, fintech has the potential to transform outdated financial systems, offering solutions that are more accessible, equitable, and efficient. It’s an industry built on innovation, challenging traditional models plagued by high fees, limited transparency, and slow adaptation to modern needs. Events like Bench’s collapse cast a shadow over these aspirations, making it harder for people to trust the long-term stability of fintech solutions.

This is a critical moment for the industry. Fintech companies must step up to prove that startups can be both innovative and dependable. The path forward requires rebuilding trust — not just with customers but with the broader public — by emphasizing stability, transparency, and a commitment to delivering lasting value. Only then can the industry fulfill its promise to truly improve lives and reshape financial services for the better.

What you should do right now if you’ve been affected

If you’ve been affected by Bench’s sudden shutdown, your most pressing issue is figuring out how to get your financial ship in order.

Here are our recommendations.

Secure your financial records

If Employer.com has reopened your Bench account, log in immediately and download anything and everything you can get your hands on. Pay particular attention to critical documents like:

• Transaction histories
• Tax filings
• Year-end financial statements

Once you’ve downloaded these files, store them securely, both locally and in the cloud. This way, you have your data and a strong place to start from, regardless of what happens moving forward.

Decide on whether you’ll stay

Employer.com has committed to honoring existing contracts and restoring services, but it’s hard to predict how quickly Bench will regain its footing — or what form its services will take.

While some small business owners may prefer to wait and see, others may decide to move on.

If you are looking to switch, several accounting platforms and professionals are offering discounted or expedited services to support those affected by Bench’s closure.

Our one piece of advice: Do not just blindly leap to the next provider.

Take a moment, compare offerings, and pick a trusted platform that can be more than just a stopgap for the next few months.

If you aren’t sure what to do or what your best move is, you can always reach out to our team at Digits. Our support team and trained CPAs are happy to talk over your details to see what makes the most sense for your situation.

Begin preparing for tax season

The final hurdle you need to overcome is tax season. With deadlines for the 2024 tax year fast approaching, it’s critical to take control of the situation now. Start by reviewing the financial records you were able to retrieve — transaction histories, tax filings, and other key documents — and make sure they’re as complete as possible.

If the disruption has delayed your preparations, you may want to file for a tax extension. This will give you more time to get everything in order while avoiding late penalties. However, an extension doesn’t delay payment deadlines, so you’ll still need a clear sense of your estimated tax obligations.

To bridge any gaps in your records or navigate filing complexities, consider reaching out to a tax professional. They can help you make sense of what you have, identify missing pieces, and ensure you remain compliant. Acting now can save you significant stress — and potentially money — down the line.

How to safeguard your business moving forward

The sudden shutdown of Bench should serve as a wake-up call for all business owners: Even seemingly stable service providers aren’t immune to disruption. While you can’t predict the future, these proactive steps can help protect your business from similar events in the future:

• Own your data: Always maintain local backups of your financial records. Use a combination of cloud storage and physical backups to ensure your data is accessible, even if your financial software provider fails.
• Vet your providers: Look beyond features when choosing your finance tech stack. Evaluate their funding, transparency, and record with customers through online reviews to ensure they’re a reliable long-term choice.
• Create a contingency plan: Develop a playbook for emergencies, including steps for migrating to a new provider, accessing backups, and finding temporary support. A clear plan can save you time and reduce stress.
• Understand your contracts: Review the terms and conditions of your agreements with financial providers. Look for clauses about data ownership, service continuity, and support in case of disruptions.
• Leverage trusted advisors: Build relationships with accountants, bookkeepers, or financial consultants who can provide guidance if something goes wrong. A reliable advisor can help you pivot quickly and keep your business running smoothly.

By taking these steps, you can build a more resilient business — one that’s prepared for the unexpected and ready to adapt to whatever challenges arise.

Need help with your books this spring?

If Bench’s sudden shutdown has left you worried about the future, you don’t have to face this alone. Whether you’re trying to organize your financial records, prepare for tax season, or decide on your next steps, support is available.

At Digits, we understand how disruptions like this can impact your business. Our team of experts is here to help you navigate the challenges and find solutions tailored to your needs. From answering questions to providing guidance on tax filing, we’re ready to assist.

Don’t let uncertainty derail your business. Reach out today, and let us help you regain control of your books and get back to what you do best — running your business.