Bench Acquired by Employer.com: What It Really Means for Your Ecommerce Accounting

Key Takeaways for Ecommerce Brands:

1. ‍Bench's acquisition by employer.com, a brand new payroll company, raises concerns about service stability and expertise, especially in vertical industries like ecommerce.
2. The year-end timing leaves 11,000+ businesses evaluating options during critical tax preparation season.
3. While continuity is promised, the transition presents an opportunity to switch to specialized ecommerce accounting providers.

In a dramatic turn of events following Bench Accounting's sudden closure announcement, Employer.com has officially acquired the Vancouver-based bookkeeping company, affecting over 11,000 small business clients. This comprehensive analysis examines the details of the acquisition, its implications for existing customers, and what it means for the future of small business financial services.

Timeline of the Bench Acquisition

The acquisition saga unfolded rapidly over just a few days:

• December 27, 2024: Bench Accounting announces sudden cessation of operations, giving customers until March 7, 2025, to download their financial data and advising customers to migrate to Kick.
• December 29, 2024: Initial reports surface about a potential buyer
• December 30, 2024: Multiple updates to Bench's website regarding the acquisition:
  • Initial posting of acquisition announcement
  • Temporary removal of the announcement
  • Final confirmation of the acquisition by Employer.com

Customer Sentiment and Service Quality Concerns

Recent feedback from the business community reveals a troubling pattern that preceded this sudden announcement. In private calls and on social media platforms, including Reddit and Twitter, many customers report experiencing:

• Declining service quality from Bench over recent years
• Inconsistent communication and delayed responses
• Concerns about accuracy and thoroughness of financial reporting
• Limitations in handling verticals (beyond general accounting), such as ecommerce-specific needs, particularly COGS tracking

A particularly concerning issue emerging from customer feedback is Bench's approach to COGS: "They don't track COGS. The financials are cash-based with a year-end adjustment," one comment said.

For ecommerce businesses, this limitation has significant implications for understanding true profitability and making informed business decisions, as tracking COGS based on cash and making a year-end adjustment leads to wild swings within your financials. Plus, making a year-end adjustment doesn't really help, as you will have no effective picture of your profitability levels.

The Bench Acquisition's Timing and Implications

The timing of this announcement—during the holiday period between Christmas and New Year's—raises serious concerns.

First of all, it looked like Bench was initially trying to play the “responsible adult” role by giving customers enough time to find an alternative bookkeeping service to close their books and file their 2024 taxes on time. Or they simply did not want to, or couldn’t, close the 2024 books themselves.

In any event, they caused a major disruption during a time that should be spent with friends and family, not stressing about whether you will have any books at all.

Second, the entire way the process was handled was really off, to say the least.

Constant notices, closure, acquisition, closure, acquisition by Employer.com, taking that off, and then back to the acquisition—this mismanagement of such a huge event gave customers, and frankly the entire market, a feeling that something was wrong.

Perhaps it is emblematic of how Bench has been managed in the past couple of years (maybe since the former CEO and founder, Ian Crosby, left, as some hint), but the way this was managed and the feeling it left clients simply reminds me of how many of their customers felt the past few years—like they're getting subpar service.

The implications of the Bench acquisition, on tax especially (but not limited to) may be far reaching. Currently, it looks like Bench (or Employer.com) is offering business continuity and trying to convey business as usual.

Social media has been full of former customers who do not know what to do and are stressed out—even after the continuity of services has been offered. Is this something that they really want at this moment, after everything that unfolded?

In addition, we were also able to gather multiple reports that Bench encouraged or even “forced” clients to move to a yearly payments model as recently as earlier this month. Suppose that happened a couple of weeks before the abrupt shutdown, while some executives may be aware of the company’s outlook. In that case, this should raise additional, serious concerns about the kind of hands handling the books of more than 11,000 small businesses.

Questions About the Acquirer Employer.com

While Employer.com promises continuity, several factors warrant careful consideration:

The brand-new company primarily focuses on payroll services, with limited experience in bookkeeping and accounting (if any). It seems like they are employing (no pun intended) an M&A aggregation strategy, hoping that they buy Bench for Bubkes and then try to cut fat by improving processes and management, getting the tech to a better level, or both.

They probably also hope that the synergy of adding a bookkeeping service to their services portfolio will increase its overall value.

The problem is that Bench was giving pretty bad services to begin with, and trying to cut fat and get out 2024 financials within such a tight timeline is a super daunting task, especially from a group that is not familiar with the world of bookkeeping and all of the complexities that it entails.

Per the CEO’s Twitter post, he never met anyone from the Bench team until Saturday afternoon. This means this was a quick M&A takeover, taking advantage of Bench's terrible position by an acquirer from another market with no real industry data or understanding. Is this good for customers? Methinks—no.

Key Details of the Acquisition

Employer.com, a San Francisco-based workforce management and business support solutions provider, has committed to maintaining service continuity for Bench's customer base. The acquisition ensures:

1. Retention of Core Services:

1. Existing customers will maintain access to their current bookkeepers
2. The Bench platform will remain operational
3. All historical financial data is preserved and secured

What does this mean for customers who had enough of this roller coaster and want out? What kind of access will they have to their data? How will all of the prepaid contracts work out, is there a way out or legal recourse? Only time will tell, though at the moment it seems no refunds will be available for customers wanting to switch to a Bench alternative following this ordeal.

2. Leadership Statements:

Jesse Tinsley, CEO of Employer.com, emphasized the strategic nature of the acquisition, while Jennifer Bouyoukos, Chief People Officer at Bench Accounting, confirmed the transition focuses on optimal outcomes.

Just as an aside, several Bench’s top executives have left the company in previous months, such as their CRO. The question of how many and which employees will stay on after the acquisition is definitely worth thinking about. Especially if you are a customer.

Nothing to fear but fear itself

For many businesses, the fear of switching accounting services has kept them with Bench despite growing frustrations. In general, a lot of business owners don’t love dealing with their bookkeeper/accountant, and may hesitate before reaching out.

Even though the financials are quite often inaccurate (along with being late) - which may cause anxiety and double-checking of your books - a lot of business owners prefer to stay put.

However, the new acquisition can shed some light on what “staying put” actually means. Staying with mediocre service at best is no great shakes, especially when the business was taken over by an outside group without industry expertise.

While the acquisition provides some form of promised continuity, many businesses are still evaluating Bench Accounting competitors and considering their options. For those wondering who the best Bench Accounting alternative for e-commerce is, it's important to consider both the stability of the new Employer.com ownership and other available options in the market.

In other words, the best-case scenario here may be that you get more of the declining services that you have received from Bench in the past few years. And possibly (more likely?)—the new acquirer may shake things up, and things will go downhill from there.

The Reality of Staying Put

Maintaining the status quo with declining service isn't the safest choice—it's often the riskiest.

But, many business owners understand that the current situation may present them with a unique opportunity to make the change many have been considering for some time.

After all, sometimes staying put is, again, the riskier move. As in a sinking ship, for example. (see below)

The Path Forward: Seamless Transition Options

All right. So we've established what happened, dug into Bench, and (as of now) are up to date on where things stand. The question is what to do going forward. Should you or shouldn't you stay with the new version of Bench?

This question is compounded when you have a brand in a vertical that requires expertise. As noted above, Bench wasn't necessarily great from the onset with such companies and probably won't improve given the acquisition.

That is all incredibly important, especially if you are an ecommerce brand, and you have complexities that other businesses don't have, such as inventory management and tracking, cash flow management, and determining profitability per item. Apparently, Bench was never great at the financials side of these elements (as we said, calculated COGS based on cash with year-end adjustment), so it definitely is a good time to think about migrating to a vertical group that actually gets ecommerce accounting and bookkeeping.

For businesses ready to make a change, you should look out for modern eCommerce-focused accounting solutions that offer a combination (which is necessary for ecommerce) of tech and people (make sure they actually know what they are talking about). A group that can offer you ecommerce specialized services, and is set up to help you migrate from Bench as soon as possible to ensure you have closed books for 2024 and meet all your tax deadlines. 

Looking Ahead

The acquisition of Bench Accounting by Employer.com marks a new chapter for Bench's services and customers and, frankly, the whole market.

Whether you are a business choosing to migrate from Bench Accounting or if you decide to stay with the platform (as of now), there are several key areas to be aware of. 

First of all, Bench’s website has been changing on the hour in recent days, so keep on top of updates and see how they can impact you. Things like when you will actually have access to your data, how you will be able to migrate it (if you want to), can you cancel your contracts, etc.

As soon as possible, copy all of your data from Bench's site (including uploaded data, 2023’s closing balances, 2024 opening balances, and any other files that you might have there).

Also, obviously, stay on top of pricing structure and servicing. I know that employer.com's CEO has noted in podcasts that changing contract structure after acquisitions can be a big move, so stay on top of that as well.

And, obviously, keep your eyes and ears open. If you are looking to move out of Bench (as a form of New Year's Resolution), there are many options out there. If you are in ecommerce, definitely check out Finaloop for ecommerce accounting.

As noted, Finaloop, the best accounting service, will give you access to top-notch accountants and tools in the ecommerce space. This way, you'll actually understand your COGS and profitability, be able to plan your cash flow based on real-time numbers, and, in general, will be able to use your financials to grow your business and not just for compliance purposes. And, for a grand finale, Finaloop will not charge you to migrate over, nor will we charge you for closing your 2024 books.

Definitely worth checking out.

Conclusion

While Employer.com's acquisition of Bench Accounting offers a potential path forward, it also presents an opportunity for businesses to reevaluate their accounting needs right around New Year’s resolution time.

Coincidence? I think not.

The combination of declining service quality, questionable shutdown, AND acquisition timing, and the acquirer's limited experience in ecommerce accounting suggests that many businesses, especially those in the ultra-verticalized ecommerce space, might benefit from considering specialized alternatives that better serve their specific needs.

This article will be updated as additional details about the acquisition and integration plans become available.

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