Bench mark of the future
Jordan Menashy says his ‘aha’ moment came three years ago when and he and business partner Ian Crosby were trying to attract customers to their accounting services start-up, Bench.
Vancouver-based Bench, touted as a model for the future for accounting, had been set up as a virtual accounting department for small business, an outsourced service with the latest technology and automation, plus real-life accountants and bookkeepers.
Menashy, a software specialist and former product manager for Blackberry, was emphasising the technology. The customers, he said, didn’t have to do a thing. But the people they were showing it to were unimpressed. They just didn’t trust it. “There is no way software can do all that for you,’’ one said. “I’ve used software before and none of it works,’’ said another.
Menashy and Crosby then explained to them that actual accountants worked at Bench. Their job was to run everything through the software. If it wasn’t working – which Menashy conceded happens often enough – they would still produce the income statements and balance sheets in the end. They would manage the accounts and answer all the questions. All they needed was the data. “Well, why didn’t you tell us that in the first place?” said the customers.
“As a result, the first thing you see when you sign up with Bench is the person you will be working with,” says Menashy. “We have them front and centre.”
Having accountants and bookkeepers there means clients can trust the high-tech, high-touch product.
While Bench has the technology to automate tasks like scanning receipts and invoices and extracting and importing information from those documents, the bookkeepers and accountants are just as important.
“Just having a bookkeeper or accountant is one piece of the puzzle and having a software platform is another piece of the puzzle,” says Menashy.
“What we seek to do is unite the two and deliver one experience in tandem, both the software and service in one package.”
In the past six months, Bench has seen spectacular growth after raising US$2 million (AU$1.8 million) in venture funding. It’s now growing at 50 per cent month on month and has the entire North American market covered. Accounting clients enjoy a 50 per cent discount on other services.
How Bench works
Web-based accounting applications like Xero or Quicken don’t provide actual accountants – or if they do, it’s on a limited basis. And Menashy says those applications are designed so that the accountant is the one who does the work, not the client.
“The difference between us and the other accounting software services is that the client ends up with a huge piece of software with 100 features, of which just three are relevant,’’ he says. “What we did was strip it down to that.”
Bench has a starting price of $100 a month on a sliding scale for unlimited bookkeeping services. Clients also have access to Bench’s app. As soon as they sign up, clients are introduced to the accountant and learn about their background, experience and education. They send their financial details through the
Bench app straight to the bookkeeper. Documents are emailed or scanned. The bookkeeper and accountant are there every step of the way, identifying documents that might be missing, making sure data is entered correctly into the computer, categorising appropriate ledgers, creating paper and credit card trails and ultimately producing a professional balance sheet and income statement.
Spreading its wings
Menashy says Bench is the model for accounting services around the world. The company is now working with a client in Australia and the UK, although he won’t nominate a time for when Bench will set up operations here. “We are starting to prepare for our expansion into Australia and the UK, but that’s a gradual process,” he says.”You never want to rush something then discover you are doing something wrong.”
Would it work in Australia? Murray Frean, founding director of Perth-based Financial Mentors Aveley, says Australians prefer to have an on-site relationship with their bookkeeper. A service based only on phone communication “would be a struggle in a market the size of Australia”, says Frean. “There’s more of a market for that where there are 250 million-plus people, as opposed to 22 million.”
He says the service would be better suited to micro-businesses, where people don’t need a regular bookkeeper, and Gen Y businesses. “I think Gen X and boomers would prefer having a relationship with an accountant who turns up on site,” says Frean.
The handling of certain functions, such as bank records, could be automated, he adds, but not other functions like payroll.
But David Smith, director of accounting advisory firm Smithink 2020, says that the Bench model and others like it represent the future for accounting. Other cloud-based companies, like Degunt and Dovetail, are already setting up similar businesses here.
Smith argues we are seeing three technologies collide: cloud accounting, automated data feeds from financial institutions and smart scanning technology.
“What the three technologies together do is bring the ability for outsourcers to provide services effectively,” says Smith.
At the same time, he believes such services will see accountants reclaiming the bookkeeping role. Bench’s example suggests they will no longer be processing numbers but providing advice.
There are no guarantees Bench will succeed. But as technology reshapes services of all sorts, it or something like it could play a big role in the profession’s future.