When Bench suddenly ceased operations and left thousands of businesses stranded, it reignited an important conversation about the tools we choose to keep our businesses running. Bench was known for its proprietary accounting system, which unfortunately became an obstacle for its clients during the transition. This event underscores an essential lesson for every business owner and entrepreneur—choosing the right accounting system can make or break your operations.
This post explores the differences between proprietary and standardized accounting systems, emphasizing why widely supported systems are often the safer, smarter choice. From seamless integrations to scalability and minimized vendor lock-in risks, here’s everything you need to know before making your decision.
Proprietary vs. Standardized Systems
What Is a Proprietary Accounting System?
A proprietary accounting system is a custom-built software solution developed specifically by and for a single company. These systems are unique and highly tailored to meet the specific needs of the vendor or their users. However, the vendor retains full control over the system, meaning clients are dependent on that vendor for updates, modifications, and ongoing support.
What Is a Standardized Accounting System?
Standardized accounting systems, on the other hand, are widely known and supported platforms such as QuickBooks or NetSuite. These systems adhere to industry standards and are designed to be compatible with third-party tools. Being open and accessible, they allow integration across various business functions.
The Key Differences
- Accessibility: Standardized systems are supported by multiple vendors, offering wider access to training, troubleshooting, and service providers. Proprietary systems limit you to the original vendor.
- Flexibility: Standardized systems often allow for customization and integration with other tools. Proprietary systems can lack this flexibility—everything is dependent on the vendor.
- Longevity: Should the proprietary vendor shut down (like Bench), clients are left in a lurch. With standardized systems, businesses can more easily transition between service providers without losing crucial data.
The Perks of Integrated Systems
One major advantage of standardized accounting systems is their ability to integrate seamlessly with other business software.
Unified Data Across Platforms
An integrated system ensures financial data flows effortlessly between accounting software, CRM tools, inventory management platforms, and even payroll systems. This creates one source of truth, reducing human error and boosting productivity.
Automation Made Simple
Standardized systems offer built-in features that automate repetitive tasks, such as invoice generation and tax calculations. Some even include add-ons from third-party developers, allowing businesses to further streamline operations.
Real-Time Reporting
With multiple systems synchronized, real-time reports provide better insights into a company’s financial health. You can instantly generate profit-and-loss statements or evaluate cash flow without piecing data together manually.
Scalability for Growing Businesses
A key consideration for any business owner is whether their chosen accounting system will scale with their needs.
Proprietary Systems Can Be Restrictive
While they often work well for fixed business models, proprietary systems are rarely agile. Growth—whether it’s expanding to new markets, increasing transaction volumes, or managing more employees—can highlight the limitations of a rigid system.
Standardized Systems Deliver Agility
Standardized platforms like QuickBooks Online and NetSuite offer tiered pricing plans and scalable features designed to grow alongside your business. Adding users and unlocking advanced features requires only a few clicks.
With these systems, companies can confidently handle higher transaction volumes, expand reporting capabilities, and even consolidate financial data from multiple global locations in one place.
Reduced Risk of Vendor Lock-In
Vendor lock-in is every business owner’s nightmare. The idea that switching away from a platform means losing access to years of critical data or building new workflows from scratch can feel like a trap.
Proprietary Risks
With proprietary systems, vendor lock-in happens by design. All your customizations and workflows are tied to the vendor, and leaving either results in losing functionality or incurring significant migration costs.
Empowerment With Standardized Solutions
Standardized systems are intentionally designed to give you more control. Open APIs and widespread support from third-party providers mean you’re never reliant on a single vendor. Switching to a different service, if necessary, is far simpler and retains most of your workflows and data continuity.
Making the Right Choice for Your Business
When choosing an accounting system, the long-term risks and rewards weigh heavily on your decision. Here are a few pointers to help you choose wisely:
- Look Beyond Start-Up Costs: Factor in scalability, maintenance, and migration costs while evaluating systems.
- Prioritize Integration: Ensure the platform works with your existing tools, or offers integration capabilities.
- Research Vendor Reputation: Check for reviews, customer experiences, and support offered by vendors holding your chosen platform.
- Evaluate Long-Term Viability: Ask whether the system will work for your business in 5 or even 10 years.
The Bench shutdown serves as a cautionary tale about relying on proprietary accounting systems. Opting for a widely supported standardized platform isn’t just about functionality—it’s about future-proofing your business.
Set your company up for operational excellence and peace of mind by choosing the right system from the start.
