Eilene Zimmerman for the NY Times writes: When Ian Crosby was in college six years ago in Vancouver, British Columbia, he really wanted to work at a video game company and got a job at one — as its bookkeeper. He learned two things: bookkeeping wasn’t a job he liked much and automating many of the bookkeeper’s tasks saved him a lot of time.
After college, he went to work as a strategy consultant for Bain & Company in Toronto and was asked to help a billion-dollar client with some accounting problems. Seeing all the technology this client used to automate bookkeeping tasks was a critical moment for Mr. Crosby. He said he realized that no small business, individually, could possibly afford the same thing. But what if a small business had access to a centralized accounting department and the technology that would make it more efficient?
In November 2010, Mr. Crosby and Jordan Menashy started 10sheet — a company whose software allowed small businesses to automate tasks like scanning receipts and invoices and extracting and importing information from those documents. The service, which also gave customers a Mint.com-like ability to incorporate information from bank and credit card accounts, would also include a human element: a live bookkeeper or accountant to manage the account and answer questions.
“The idea was to develop the technology and then build a service off of it, one that offered a real bookkeeper,” Mr. Menashy said.
By March 2012 they had added two more founders — Adam Saint and Pavel Rodionov — and were accepted by the start-up accelerator TechStars NYC. Mr. Menashy said the company got $118,000 through TechStars. Last June, 10sheet graduated from the program. As it invited more clients to try out its service, the founders discovered that the aspect of 10sheet’s service that clients valued most was the human interaction — so much so that the founders changed their model and put the live bookkeeper front and center, rather than as an add-on to the software.
On July 16, the company restarted as Bench and opened to the general public. Although there are many cloud-based accounting services for small businesses — think FreshBooks, Outright orKashoo — they don’t provide a live bookkeeper. Companies likeWave and Xero offer software with many of the same functions as Bench’s, but just provide a link to a listing of bookkeepers and accountants, not to an actual human being.
Finding those human beings can be a challenge. Bench is committed to having a team of accountants and bookkeepers based in North America — both from a customer service and a security standpoint — and finding qualified people is more difficult and more expensive than having a group of bookkeepers working remotely from another country, like India.
Mr. Menashy said Bench’s model is pretty novel in the world of small-business accounting software, but Daniel O’Leary, professor of accounting at the University of Southern California’s Leventhal School of Accounting, said most accounting firms offer lower-priced service packages for small businesses. “When I worked in the industry, we used to do this all the time,” he said.
Bench’s service is best suited to businesses that have $100,000 to $2.5 million in revenue, Mr. Menashy said.
Here are the nuts and bolts:
WHAT IT IS: Bench is an outsourced accounting service, providing both task automation and an actual accountant or bookkeeper. The service handles most bookkeeping tasks, including recording and categorizing expenses, recording income, reconciling checking accounts and working with a tax preparer.
HOW IT WORKS: After signing up on the Web site, business owners meet by phone with an accountant at Bench, who gets them set up with the service. Clients connect their bank and credit card accounts through the Bench Web app. This allows them to securely and automatically send bank and credit cards statements to their Bench bookkeeper. All receipts and supporting documents — including check images and invoices — are sent to Bench. Those can be sent three ways: photographed with a smartphone and e-mailed; scanned and uploaded to Bench; or sent to the company using a FedEx envelope, where they are scanned — with the help of Bench’s scanning partner, Shoeboxed — and uploaded. All that paperwork is then categorized and organized. “We do all that heavy lifting,” Mr. Menashy said.
Bench also generates two reports: an income statement and balance sheet. These are available and updated online in the business’s account and are interactive. A business owner, for instance, may see an expense of $300 for software and not remember the purchase, but can call up the original receipt to see where and when that money was spent. Those reports are needed for tax preparation, and a Bench accountant will also answer questions from a tax preparer.
THE PITCH: As a small business grows, an owner’s time is better spent on tasks other than accounting, Mr. Menashy said. “Entrepreneurs have so much competing for their attention. We remove bookkeeping from the list of distractions.”
WHAT IT COSTS: $100 a month for unlimited bookkeeping services and access to all of Bench’s app, which will soon include a mobile app for snapping photos of receipts and sending them in. Mr. Menashy said the businesses Bench works with report spending two to three times that amount on bookkeeping services. The FedEx ship and scan service costs $30 per envelope.
For that price, Mr. O’Leary at U.S.C. questioned what the accountants and bookkeepers were being paid and their level of experience. “One hundred dollars a month is pretty cheap,” he said. “What are you getting for that? Even if they do have highly efficient software, there’s potentially a lot of ambiguity in accounting. Receipts sometimes can’t be read, and their contents may need to be interpreted. And there are different income tax regulations relating to the deductibility of meals and other issues.”
COMING SOON: This fall, Bench will introduce its mobile app to simplify the small number of tasks clients have. The company says it is getting a lot of interest from accountants and payroll companies wanting to partner with it. “It would mean having a network of high-quality partners in areas that complement what we do,” Mr. Menashy said. “That would ensure any client that comes to us could have all their needs met, even if it’s something we don’t provide.”
What do you think? Do small businesses need more than cloud-based accounting software? And is the human element Bench offers worth the cost?
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