Why Bench's Charges for Prepaid Services Have Startup Entrepreneurs Concerned

Bench Faces Customer Backlash Over Prepaid Service Fees

In a contentious move that has left many customers feeling duped, accounting startup Bench is accused of charging users for services that were already paid for under its previous ownership.

This issue arose following the acquisition of Bench by Employer.com after its collapse due to mismanagement and liquidity issues. The current CEO, Jesse Tinsley, had promised on platforms like LinkedIn that all prepaid services would be honored—an assurance that many customers now deem hollow.

Spotlight on Customer Complaints

Several customers, including one from Qorum, have gone public with their grievances, claiming they were asked to pay up again to access essential documents like tax returns that were already covered by earlier payments. One anonymous source was shocked to receive notice that they needed to renew their subscription to retrieve accounting books they believed were already included in their past payments.

Despite Employer.com’s Chief Marketing Officer, Matt Charney, claiming that they are honoring all prepaid services, discrepancies persist, with some users feeling misled.

The History Behind Bench's Collapse

Bench's troubles began to mount long before its abrupt shutdown. Reports indicate that the startup struggled to gain traction, despite a hefty investment of $135 million. This included attempts to implement AI into their bookkeeping processes, which ultimately failed, leading to a backlog of unfinished clients’ books and delays in service.

Following its closure on December 26, 2024, Employer.com seized the opportunity to acquire the distressed company just 72 hours later, intending to stabilize the client base that was left in chaos.

Emotional Toll on Affected Customers

The aftermath of Bench's shutdown has left many solopreneurs and small business owners grappling with uncertainty. Galen King, a web consultant, expressed regret over his decision to fully commit to Bench’s services, revealing anxieties about losing access to vital historical data now that Benchmark’s operations are in limbo.

As many are forced to file for extensions with the IRS and seek alternative accounting solutions amidst this turmoil, the emotional and logistical burdens continue to weigh heavily on their entrepreneurial spirits.

A Cautionary Tale for Startup Entrepreneurs

The saga of Bench serves as a stark reminder for entrepreneurs to carefully vet their service providers and maintain diversified options for critical operations like bookkeeping.

With the accounting landscape rapidly evolving, entrepreneurs are advised to consider platforms that offer integration with existing tools, ensuring they are not entirely reliant on a single service. Embracing multiple avenues can safeguard against disruptions like those encountered by Bench's customer base.

The ongoing confusion surrounding Bench's service provision acts as a triggering point for discussions on how startups handle acquisitions and transitions, especially in financially strained situations where customer loyalty is at stake.