The Accounting Podcast

JPMorgan's RTO Drama, VC Love for Accounting and the Fall of Bench

Jan 21, 2025

Dive into the drama of Bench's bankruptcy, uncovering their surprising spending habits and the pitfalls of their business model. Explore the rising venture capital interest in accounting, fueled by AI's promises of efficiency. The conversation heats up with a lively debate on JP Morgan's return-to-office policy, revealing stark divides in workplace flexibility preferences. Discover the intertwining future of AI and accounting, where human connection remains essential despite technology's encroachment.

01:13:40

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Quick takeaways

Bench's bankruptcy highlights significant financial mismanagement, with a stark contrast between its assets and overwhelming liabilities totaling around $43 million.

Venture capital's keen interest in accounting firms is driven by AI advancements, aiming to enhance client efficiency by potentially doubling their client load without additional staffing.

The backlash against JPMorgan's return-to-office mandate underscores employees' desire for workplace flexibility, challenging the notion that productivity relies solely on in-person presence.

Deep dives

The Bench Bankruptcy Overview

Bench, a bookkeeping startup, filed for bankruptcy on December 27, revealing significant financial distress. The company had reported assets of approximately $5 million against liabilities totaling around $43 million, with only $500,000 in cash remaining at the time of filing. The bankruptcy documents indicated that poor management, lack of working capital, and ineffective marketing strategies were primary reasons for their downfall. Notably, the company owed various creditors large sums, including $240,000 to Gusto and over $700,000 to an Indian staffing agency, highlighting their unsustainable operational costs.

Intro

3min

Exploring Sponsorships and Continuing Education Opportunities

2min

Unraveling Bankruptcy Dynamics

12min

Financial Challenges and the Rise of AI in Accounting

4min

Venture Capital and the Accounting Dilemma

8min

Simplifying Business Banking with Relay

2min

AI and the Future of Accounting

18min

The Human Touch in Bookkeeping and Office Dynamics

6min

The Impact of Return-to-Office Policies on Employee Well-Being

7min

10.

Accounting Firms' Resilience and Controversies in Financial Services

4min

11.

Ineffectiveness of Regulatory Fines in Audit Practices

4min

12.

Addressing Accountability in Accounting and Streamlining Firm Management

3min

Blake and David examine Bench's bankruptcy filing, revealing fascinating details about their spending patterns and challenges with the business model. They also explore venture capital's growing interest in accounting firms, particularly focusing on AI automation claims and their potential impact on the profession, and there's a lively discussion about JP Morgan's controversial return-to-office mandate and its implications for workplace flexibility, sparked by Blake's viral tweet that garnered nearly 5 million views.

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Chapters

(01:23) - Bench Accounting Bankruptcy Deep Dive
(02:17) - Venture Capital's Interest in Accounting
(02:42) - JP Morgan's Return to Office Policy
(04:04) - Continuing Professional Education Credits
(05:05) - Bench Bankruptcy Filing Details
(05:50) - Bench's Financial Breakdown
(07:42) - Bench's Customer Acquisition Strategy
(10:55) - Bench's Development and Management Costs
(13:17) - Operations and Outsourcing at Bench
(16:07) - Service Delivery and Refunds
(19:47) - Venture Capital and AI in Accounting
(29:16) - Relay: The Small Business Bank
(35:28) - AI-Powered Bookkeeping: A New Frontier
(36:44) - Debating the Future of Software Costs
(41:14) - AI's Impact on Job Markets
(45:15) - Challenges in Replacing Human Jobs with AI
(50:57) - The Remote Work Debate
(01:02:05) - Corporate Accountability and Legal Issues
(01:12:03) - Closing Remarks and Future Topics

Show Notes

AI Has Venture Investors Excited About (Yes) Accounting Firms

https://www.wsj.com/articles/ai-has-venture-investors-excited-about-yes-accounting-firms-3b9b3226

Bench Accounting, Inc. and 10Sheet Services, Inc.
https://www.ksvadvisory.com/experience/case/bench

JPMorgan tells all its employees they must return to office full-time

https://finance.yahoo.com/news/jpmorgan-tells-employees-must-return-140000800.html

Work From Home Policies and Practices

https://pearlmeyer.com/insights-and-research/research-report/work-from-home-policies-and-practices

Workplace Policies and Pay Transparency

https://pearlmeyer.com/insights-and-research/research-report/workplace-policies-and-pay-transparency

H&R Block Agrees to $7M FTC Settlement and Will Make Downgrading Tax Tiers Easier

https://www.cnet.com/personal-finance/taxes/h-r-block-agrees-to-7m-ftc-settlement-and-will-make-downgrading-tax-tiers-easier/

Capital One sued by CFPB over alleged deception on savings account interest rates

https://www.msn.com/en-us/money/personalfinance/capital-one-sued-by-cfpb-over-alleged-deception-on-savings-account-interest-rates/ar-BB1rr4nY

Imposing a $500,000 Fine, PCAOB Sanctions Baker Tilly US, LLP for Quality Control Violations

https://pcaobus.org/news-events/news-releases/news-release-detail/imposing-a--500-000-fine--pcaob-sanctions-baker-tilly-us--llp-for-quality-control-violations

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Transcripts

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The Accounting Podcast

JPMorgan's RTO Drama, VC Love for Accounting and the Fall of Bench

Podcast summary created with Snipd AI

Quick takeaways

Deep dives

The Bench Bankruptcy Overview

Venture Capital's Interest in Accounting

The Challenges of Client Relationships

Return to Office Policies and Employee Sentiment

Regulatory Actions in the Accounting Sector

Remember Everything You Learn from Podcasts