The North American small accounting practice sector ended 2024 with dramatic news: Bench Accounting shut down operations, only to be revived by an HR software provider days later.
Bench, a Canadian accounting firm serving small businesses, ceased operations on December 27, only to be acquired by Employer.com three days later. This disruption left their customers in a difficult position ahead of tax season.
This situation made me reflect.
Should an accounting firm be backed by venture?
Venture capital offers the promise of capital influx and market expansion, making it well-suited for accounting technology development. Such funding enables accounting technology firms to innovate rapidly, scale effectively, and meet the evolving needs of the profession. Accounting technology requires significant capital investments to innovate and scale effectively. This allows the profession to leverage cutting-edge tools that streamline operations, improve accuracy, and enhance client services. However, the unique demands of accounting services render VC funding less ideal for this sector.
Accounting services are inherently trust-based, deeply rooted in professional judgement, ethics, and integrity. These qualities ensure that the service not only meets regulatory standards but also fosters trust and long-term relationships with clients, setting it apart from many other fields. The service layer depends on human expertise, which should be guided by the profession itself to uphold standards and values. While external investors can contribute significantly to funding expensive tools or technology—much like investing in advanced medical equipment for clinics—their involvement must be limited to areas that do not compromise professional autonomy.
For example, just as a clinic with non-medical professionals dictating patient treatment decisions would quickly lose credibility, accounting services should not be subject to decision-making by those who do not fully understand the pursuit of excellence and the core values of the profession. Introducing too many external stakeholders can dilute the focus on quality, compromise the profession’s ethos, and ultimately erode the trust clients place in the field. To maintain trust and ethical integrity, accounting services must remain under the stewardship of professionals who understand and embody these values.
The role of automation in accounting
Automation has become a transformative force in accounting, promising efficiency, reduced manual work, and enhanced accuracy. Its purpose, however, should not be to enable price wars or cost competition, as this approach undermines the core benefits of automation in accounting in the long term. Automation empowers professionals by improving service quality, addressing evolving client needs, and supporting sustainable growth, ultimately helping the profession stay relevant in a rapidly changing landscape.
Any savings achieved through efficiency should be redirected into training programmes and initiatives to enhance staff happiness, such as eliminating overtime. This approach addresses a long-standing expectation in the profession and tackles one of the key reasons why accounting has been less preferred by many. Training helps the profession stay relevant in today’s fast-changing technological landscape, while a focus on staff well-being fosters a more sustainable and appealing career path for future accountants.
Additionally, automation creates the room for professionals to step back and think beyond the immediate tasks in front of them. This breathing space allows for reflection and the opportunity to create the value that the profession should provide.
Does predatory pricing work for accounting services?
Predatory pricing, or undercutting competitors to dominate the market, has been used in many industries, but it is ill-suited for the accounting profession and is clearly a practice inconsistent with the Code of Ethics for Professional Accountants. This practice has long-term consequences that erode the trust and ethical foundations upon which the profession is built. For practitioners, predatory pricing creates financial strain that undermines their ability to meet the rigorous standards. For clients, it jeopardises continuity and quality of service, reducing confidence in the profession as a whole.
Sustainable business practices should be emphasised in accounting more than in any other sector, as the profession’s core values are built on trust and ethics. While accounting technology may be commoditised, accounting services are not and should never be. The essence of accounting services lies in their trust-based, client-centric approach, which depends on ethical integrity and professional judgement. Predatory pricing undermines these values, making it increasingly difficult for practitioners to uphold the standards of the profession.
Furthermore, accounting services value continuity—a cornerstone of what clients expect and rely upon. Disrupting this continuity risks not only individual reputations but also the reputation of the profession as a whole. To uphold the integrity of the field and meet clients’ long-term expectations, maintaining sustainable practices is imperative for consistent, high-quality service delivery.
Additionally, accounting services value continuity—a quality that clients expect and rely upon. Disrupting this continuity not only risks individual reputations but also brings disrepute to the entire profession. Maintaining sustainable practices ensures that accounting professionals can deliver consistent, high-quality services that uphold the integrity of the field and meet the long-term expectations of clients.
Conclusion
The dramatic events surrounding Bench’s closure and revival highlight the vulnerabilities and complexities of running an accounting firm in today’s market. I hope this episode serves as a lesson for us here in Singapore—in how we view the industry and approach our go-to-market strategies. We should focus on sustainable business practices and ensure that decisions align with the core values of trust and professionalism.