Note: This article was originally published in 2015 and was updated on February 3, 2019 to reflect new information provided directly by Bench.
Started in 2012, Bench has grown quickly to become one of the industry's hottest accounting services startups. In January 2018, Bench raised $18 million, for a total of $53 million invested to date. With 350 employees, Bench appears poised to scale into what would be a first for the industry—a national bookkeeping services firm.
Bench pricing ranges from $95 to $495 per month, making it an attractive option for small businesses looking for bookkeeping help.
What Bench does
Bench provides each of its clients with a dedicated bookkeeper. These bookkeepers are Bench employees and all work from their Vancouver headquarters. Clients can schedule a phone call or message their bookkeeper directly via the Bench app.
Your Bench bookkeeper does a number of things for you:
Tracks all your business transactions and categorizes them
Collects and stores all necessary documents related to your business activities (this would include receipts, bank and credit card statements, payroll reports, merchant reports, loan/lease agreements, etc.)
Prepares monthly financials complete with all needed monthly adjustments to merchant deposits and payroll providers to ensure accurate financial statements each month
Creates a year-end financial package to take to your accountant to file your taxes
If you’ve got personal expenses mixed in with business expenses, Bench will help you separate those out.
Bench also has a status feature, where you can check on the status of your books in the app. This is a nifty feature that most independent bookkeepers or accounting firms don’t provide.
What Bench doesn't do
The biggest consideration for business owners deciding whether or not to use Bench is that it produces cash basis financials with optional accruals (AKA “modified cash basis”). This means that transactions are generally recorded when money is deposited, or when money is debited from your accounts (with some exceptions, if you go the modified cash basis route).
According to Bench:
Bench is best characterized as modified cash basis. We take a cash basis approach to reconciling the day to day transactions off the bank statement. Using that as a foundation, we make accrual adjustments if provided the information from either the client or their accountant/advisor. Primarily we’ll see balance sheet accrual adjustments (e.g. fixed asset depreciation schedules), however we have an internal team that offers “Pro” services that will tackle transaction based accruals (e.g. subscription revenues).
Bench therefore doesn't handle invoicing or tracking of bills. If you need to invoice your clients and track what’s outstanding, you’ll need to use an outside system. Likewise, if you need to track what you owe to your suppliers or contractors, you’ll have to do that outside of the app.
Other factors to consider:
Each month, Bench will download your bank, credit card, and other statements from online banking, provided online banking is available. Bench can also log into apps such as Gusto and PayPal on your behalf to download data on their own if you provide access. If your bank doesn’t provide online banking or a connection that Bench can use, then you’ll need to scan and upload your statements manually.
Your Bench bookkeeper can’t help you with tasks such as filing 1099s or renewing a business tax license. However, Bench will track and produce a 1099 report at no extra cost which you can use to file your 1099s. Online services such as Track1099 (my favorite) make this relatively painless.
If you haven’t done your books in a long time, you’ll need to pay extra to get caught up. Or you can start fresh.
If you’ve been doing your books in another accounting system, you can’t import the individual transactions into Bench. Your Bench bookkeeper will ask you for your latest reconciled financials, then enter those and start from there (unless you want to pay Bench to do the previous months’ books over again).
There’s no built-in payroll option — but Bench is very experienced with Gusto, so you can use them for payroll and Bench will record it properly in your books.
Bench’s software doesn’t do inventory management.
So is Bench a good deal for my business?
This is a tough question to answer because so much depends on the individual business and owner. In general, if what you need is cash basis financials and receipt management so you can file your taxes, Bench offers the right service at a great price.
The pricing is hard to beat. Bench’s pricing starts at $99/month. When I ran my own online bookkeeping firm, my minimum price was $250/month. It just wasn’t possible to do it for less. Bench is able to offer a similar service as many independent bookkeepers for 1/2 to 1/3 the price because they are doing bookkeeping at scale with their own specialized software and processes.
Most business owners will be better off outsourcing and spending their time bringing in new business. This description fits the large majority of small businesses, so Bench has a big market in which to grow.
When to hire a bookkeeper or accountant
If you need any of the features that Bench is missing (listed above), you may want to consider alternatives. For instance, you may need help with tasks such as paying bills, invoicing customers, paying sales taxes, filing for a business license, or sending out 1099s. In that case, you may want to look into hiring a bookkeeper or accountant. Just know it will likely be at least 2 or 3 times more expensive.
You should definitely consider hiring an accountant or bookkeeper if you need help seeing your whole financial picture so you can figure out how to manage the business better. This is when accrual basis financials start to become important. To get a true picture of how your business is doing, it is important to be able to match related revenue and expense items in the same time period, regardless of when funds are received or disbursed. That’s the purpose of accrual basis financials. When a business is small, this will happen naturally, but as soon as a business grows and becomes more complex, accrual basis bookkeeping is necessary for the financials to be meaningful.
To put a number on it — if you’re under $500,000 in annual revenue, outsourcing to Bench will probably a good bet. if your business is between $500,000 to $1 million in annual revenue, you should consider switching to accrual basis and hiring a part-time bookkeeper or accountant, (but Bench may still be a good fit). If you’re over $1 million in revenue, it’s almost certainly time to hire a full-time bookkeeper.
Please note that these are generalizations, and the individual needs of your business may not quite fit into the revenue figures above. For advice to your particular situation, consult with a qualified professional, such as an Enrolled Agent (EA) or Certified Public Accountant (CPA).
