Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Bench accounting services shutting down

bench.co

Post reply on HN
Print view View original

361–370 of 399 posts

Re: Bench accounting services shutting down

#361

Post by lotsofpulp »

rchaud wrote: post #356
pkkkzip wrote: post #216

hmmm another "unicorn" from vancouver that bites the dust, i remember one with an owl as mascot logo can't recall what they did or their names but many ppl from vancouver mentioned it while ago. I wonder why that place can't compete with American cities, i think even Toronto /Montreal is more successful than Vancouver. for one the low salary must be demoralizing on top of being one of the most expensive cities in the…

> seems like nobody can really compete with America when it comes to creating IPOs and billionaires. This is another way of saying American tech VCs throw a lot of money around, often into poor investments, in the hope of cornering the market on $nextBigThing. In a world where any Tom, Dick and Harry can run up massive losses and still IPO through an SPAC, how is that an indicator of anything good?

>In a world where any Tom, Dick and Harry can run up massive losses and still IPO through an SPAC, how is that an indicator of anything good?

Anyone can IPO, but few earn money doing it. In the last 10 years, how many owners made any significant money IPO-ing through an SPAC? The market has mostly rewarded good businesses with cash flow and profits and growth, and others have lagged behind a relatively risk-less SP500 investment.

This very thread is an example of yet another business shutting down because the business couldn’t achieve the desired profit margins. If the owners could have IPO’d and made money, they would have.

Re: Bench accounting services shutting down

#362

Post by chrismaeda »

It seems to me that this is the key takeaway for founders:

Your accounting stack is

  1. accounting software
  2. bookkeeping  (ie operating the accounting software)
  3. cpa / cfo    (ie for tax and financial planning)
The benefit and problem with "nextgen" solutions like bench, kick, etc is that they provide a proprietary solution for the entire stack. This could be better/faster/cheaper but also comes with risk, as we are seeing in real time.

In contrast, the minimal risk approach is to source your accounting stack from different vendors:

  1. accounting software (eg quickbooks, xero, wave)
  2. bookkeeping   (hire a person or use a service)
  3. cpa / cfo     (hire a person or use a service)
If you use "standard" accounting software, you can change the other layers of your accounting stack at will. The total cost of layers 1 and 2 might be $6k-$8k per year for a company with revenue, which looks more expensive than the nextgen solutions. But the reduced risk and increased flexibility may be worth it.

Re: Bench accounting services shutting down

#363

Post by thayne »

datavirtue wrote: post #354
jnwatson wrote: post #227

Earlier quoted context omitted.

It is irony of all ironies that an accounting services company would be surprised about their own insolvency. In reality, they had to have known for months. The director were probably just holding out for a Hail Mary funding injection. This is bad bad business, especially for a financial services company.

The investors aren't going to let you burn all the cash just because. They want out now with whatever is left so they can flip the coin to the next bet.

Maybe if the investors could be held liable for the damage they cause for suddenly shutting something down like this, they would be more likely to give customers more warning before shutting something down.

Re: Bench accounting services shutting down

#364

Post by Amfy »

chrismaeda wrote: post #362

It seems to me that this is the key takeaway for founders: Your accounting stack is 1. accounting software 2. bookkeeping (ie operating the accounting software) 3. cpa / cfo (ie for tax and financial planning) The benefit and problem with "nextgen" solutions like bench, kick, etc is that they provide a proprietary solution for the entire stack. This could be better/faster/cheaper but also comes with risk, as we are s…

Agreed, but how do you protect yourself against quickbooks/xero/wave going under? Especially with Wave being mostly(?) free

Re: Bench accounting services shutting down

#365

Post by beepbopboopp »

conductr wrote: post #345
theanonymousone wrote: post #328

Earlier quoted context omitted.

Sorry but is there some source about this for a lame person?

I’m a CFO and was a layperson on this until I started having to deal with it. I don’t have any resources other than my work experience with a few companies that have debt covenants. First, they can be rather arbitrary as they’re literally made up for each deal and meant to align somewhat to the growth story that’s being “sold” to the lender during the debt issuance; they’re negotiated between lender/borrower so take…

Bravo, I couldn't have explained it better.

Re: Bench accounting services shutting down

#366

Post by rchaud »

lotsofpulp wrote: post #361
rchaud wrote: post #356

Earlier quoted context omitted.

> seems like nobody can really compete with America when it comes to creating IPOs and billionaires. This is another way of saying American tech VCs throw a lot of money around, often into poor investments, in the hope of cornering the market on $nextBigThing. In a world where any Tom, Dick and Harry can run up massive losses and still IPO through an SPAC, how is that an indicator of anything good?

>In a world where any Tom, Dick and Harry can run up massive losses and still IPO through an SPAC, how is that an indicator of anything good? Anyone can IPO, but few earn money doing it. In the last 10 years, how many owners made any significant money IPO-ing through an SPAC? The market has mostly rewarded good businesses with cash flow and profits and growth, and others have lagged behind a relatively risk-less SP50…

> Anyone can IPO, but few earn money doing it. In the last 10 years, how many owners made any significant money IPO-ing through an SPAC?

If owners are holding stock (instead of say, options), then the only reason to IPO would be if they can sell the stock on the secondary market at a profit. They wouldn't need to IPO to raise capital, the VCs can offer that. So what would be event where such a SPAC IPO wouldn't make money for the founder?

Re: Bench accounting services shutting down

#367

Post by jegolden1 »

tonkatsu2222 wrote: post #270
jegolden1 wrote: post #236

Earlier quoted context omitted.

Q - is it that the strategy was at odds? Or was it that the software wasn’t good enough yet, so expensive bookkeepers were required to supplement?

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.

Tracks with what I've seen from other companies that tout their accounting AI/automation. Never measures up .I was never a customer - did Bench overpromise to their customers directly? They always struck me as the most human from the outside.

Re: Bench accounting services shutting down

#368

Post by jegolden1 »

ensignavenger wrote: post #155
solidgiant wrote: post #149

I was just sold bench.co for my three businesses and the sales person Luc Lewarne made me sign a payment agreement with Capchase. The agreement states that I still owe Capchase the full amount for a year, even if Bench.co shuts down... Does anyone have any contacts or experience with Capchase? I never even started my service, which was supposed to begin January 1st, 2025 and now I will have to pay out 12 months to Ca…

Well in hindsight, that was a silly thing to do... First step- make sure you have read and understand your contract. Is there a cancellation period? What state laws may apply (Some states a allow a cooling off period, but often this applies only to consumer contracts, not B2B). Second, contact Capchase via email and see if they will will allow you out of the contract "peacefully". If they are smart, they will so "sur…

And fourth maybe don't name and shame the poor salesperson.

Re: Bench accounting services shutting down

#369

Post by jegolden1 »

Kwpolska wrote: post #324

This thread is full of accounting service founders promoting their product, often with a discount for Bench refugees. Why are there so many of those accounting startups and how do they manage to survive in such a crowded market? Or are they also going to do a last-minute shutdown when the VC money runs out?

The reason is that there is tons of money still flowing, because accounting is an industry that is easy to pitch to an investor in 2024.

1. It touches everyone 2. Everyone finds it annoying 3. Everyone thinks they pay too much 4. AI (still sexy) can fix the above

Unfortuntely, we're still decades from strong products.

I wouldn't touch any of these companies with a ten foot pole if I was a consumer or investor.

Re: Bench accounting services shutting down

#370

Post by boxed »

mbrameld wrote: post #347
boxed wrote: post #251

Earlier quoted context omitted.

> every good ship can get a new captain and sail on. If not, the problem isn't the sailors it's the captain (who set the ship before the fall). You're seriously claiming a bad leader can't destroy a company/organization/project/country?

You're arguing a different point. The old CEO claims it's his absence that caused the failure, not the presence of the new CEO. You're arguing that it's the presence of the new CEO that caused the failure. GP is pointing out that if the absence of the old CEO is what caused the company to fail as the old CEO claims, and not the actions of the new CEO, then it wasn't in good shape to start with.

Ah. That's a bit more sane for sure. Although with some big caveats. A founder can be crucial for a long time, and there's nothing wrong with that. It's a tradeoff. You don't want to spend time operationalizing the business before it's stable for example. That's just a waste of time. The board very well could be mistaken on which stage the business is in.
Post reply on HN