The Fall of Bench.co is a Wake-Up Call for the Accounting Industry
By TED ROSE, ROSE FINANCIAL SOLUTIONS
Bench.co’s sudden closure – echoing ScaleFactor’s demise in 2020 – highlights critical flaws in the "tech-first" and offshoring approach many accounting outsourcing firms are taking. I couldn’t agree more with the leading assessment: automation alone can’t replace experienced financial leadership, nor can offshoring. But let’s break down why this keeps happening – and why most accounting outsourcing firms are destined to fail.
The Two Fatal Flaws in Outsourced Accounting Models:
- Tech First, Strategy Last – Firms like Bench tried to automate operational accounting without understanding that small businesses need more than automation – they need experienced financial partners who offer real insight, not just dashboards. Technology should amplify expertise, not replace it. Companies focused on scaling are not ready to trust a driverless taxi to help them navigate the financial complexities of growth while safely reaching their intended destination.
- The Growth Ceiling – Most outsourced accounting firms excel at serving early-stage start-ups (<$2M revenue), but what happens when clients hit $5M, $10M, or even $20M? The answer: they leave. These accounting outsourcing firms are not structured to scale with their clients as they move through critical growth stages. This creates a gap that no amount of software can fix.
The harsh reality? Few outsourced accounting firms can help companies grow beyond that $5-10M revenue range, which is precisely when financial complexity spikes, strategic financial guidance is critical, and scaling requires more than bookkeeping.
The Rise of CAS (Client Accounting Services) and the Role of CPA Firms
In the post-Covid era, companies have increasingly turned to CPA firms for help managing their accounting and financial operations. The problem? CPA firms aren’t structured for operational accounting either. Their focus has traditionally been on compliance, tax, and audit – not running day-to-day financial operations for scaling companies.
For companies to scale from start-up to $10M to $100M and beyond, they need:
- Scalable financial infrastructure
- Experienced teams who can navigate growth challenges
- Advisory services that anticipate future needs
This is why the AICPA developed the
CAS 2.0 framework – to guide CPA firms in
building the infrastructure
and advisory capacity necessary to support growing clients. The CAS 2.0 model outlines how CPA firms can combine technology, strategy, and advisory services to drive client success
beyond transactional accounting. Most CPA firms that are currently building CAS financial infrastructure have followed this guidance by either (1) building a hub and spoke model where a resource wears multiple hats or (2) offshoring to bring in lower cost labor to handle dedicate functions. Neither one of these models have been proven to scale while meeting client requirements over the long-term.
The Path Forward – Build or Partner?
Bench and ScaleFactor are cautionary tales for CPA firms attempting to build scalable financial infrastructure without the right foundation. My belief is that most CPA firms should focus on training their professionals to deliver advisory services and partner with firms that excel at operational finance. In the terms used by the AICPA, CPA firms should focus on remaining the trusted advisor for their clients, providing clients with CAS 2.0 Advisory Support.
Where ROSE Comes In
At ROSE, we’ve been providing Finance and Accounting Outsourcing services for over 30 years. We’ve evolved to offer Finance as a Service (FaaS) – combining the people, processes, technology, organization, and data clients need to scale from start-up to $500M + in revenue. Our largest client started with us as a start-up and is now approaching $500M in revenue – a journey that took less than 10 years.
Our secret? We don’t just provide financial infrastructure – we provide guidance.
Through the Easby platform – an enterprise-grade, hyper-automated, AI-enabled system of engagement – we manage everything from transactions and approvals to projects and deliverables, creating scalable, cost-effective financial operations tailored for growth.
- Our PEOPLE have been there and done that
- Our PROCESSES are tested and scalable
- Our TECHNOLOGY is enterprise grade, built on hyper-automation for flexibility, and AI enabled to support future needs
- Our ORGANIZATION covers the key finance, accounting, tax and related technology needs of a scaling company
- YOUR DATA is secure and structured for business insights, machine learning, AI initiatives, and to support future efficiencies
What Entrepreneurs Really Want
Most business owners aren’t shopping for financial infrastructure – you want a trusted guide who can help turn their dreams into reality. You need a partner who knows the path forward and can steer you away from the pitfalls that derail so many growing businesses.
- If you’re a CPA firm thinking about expanding your CAS offering, let’s talk about how ROSE can support your journey.
- If you’re an entrepreneur planning on scaling past $10M, reach out – we know the way.
Ted Rose
In 1994 Ted Rose founded Rose Financial Solutions (ROSE), the Premier U.S. Based Finance and Accounting Outsourcing Firm. In 2010, the Blackbook of Outsourcing named ROSE the #1 FAO firm in the world based on client satisfaction. As the president and CEO of ROSE, he provides executives with financial clarity. Ted has also acted as the CFO for a number of growth companies and assisted with various rounds of financing and M&A transactions.
Share this article:
Visit Us On:
