Dr. Jackie Meyer is CEO/founder of The Concierge CPA Consulting and TaxPlanIQ, a SaaS tax-planning software for accountants.
The sudden shutdown of Bench Accounting at the end of 2024 left thousands of businesses scrambling. Bench, once a trusted name in bookkeeping, ceased operations without warning, underscoring a critical issue: Private companies—especially those leveraging buzzwords like “AI” and “raising millions”—are often not held accountable for transparency.
As the founder of a software-as-a-service (SaaS) company in the tax advisory space, I’ve seen firsthand how the allure of artificial intelligence (AI) and the lack of oversight can create a perfect storm for customer and investor disappointment. Let’s pull back the curtain on the risks, realities and the need for greater accountability in the private sector.
What Private Companies Don’t Have To Tell You
Private companies operate in an accountability gray area. Unlike public companies, they’re not required to file quarterly earnings reports or disclose significant risks to the public. While private firms must provide accurate information to investors, their customers and the broader community are often left in the dark. This is particularly troubling in industries where the services offered are foundational to clients’ operations—like financial management or tax advisory.
For example, Bench reportedly onboarded clients into annual contracts shortly before its closure. If true, this raises ethical concerns about whether the company’s leadership acted with integrity and provided investors and customers with a clear picture of its financial health.
Meanwhile, some companies are using emerging technologies like AI as a selling point, often overstating their capabilities or outright misleading stakeholders. The result? Overpromises that lead to underdelivery, eroding trust and risking financial ruin for both the companies and their clients.
The Reality Of AI In SaaS: Lessons I’ve Learned
The hype around AI is undeniable, but the reality is often far less glamorous. At my company, we spent much of 2023 exploring AI integrations to enhance our tax strategy suggestions. Our vision was ambitious: use AI to auto-suggest dozens of actionable tax strategies from a single 1040 form within seconds.
After partnering with three separate AI service providers, we discovered the harsh truth: AI was too unreliable for this critical task. Responses were inconsistent, and when using application programming interfaces (APIs) from leading providers, the technology evolved so rapidly that it became impossible to maintain stability. Our users need precision, not an ever-shifting algorithm.
Ultimately, we reverted to logical programming—good old-fashioned if-then formulas—and tapped into the expertise of myself and other CPAs to build a more robust and reliable solution. This wasn’t a failure; it was a hard-earned lesson. Today, our company is thriving because we’ve embraced what works: expertise, hard work and ethical innovation. AI still plays a role in our chatbot and customer service tools, but we’ve learned not to rely on it for the heavy lifting.
What’s troubling is that not all companies are this transparent. Some continue to market their services as AI-driven when much of the work is manual or human-supported. This raises ethical questions: If a company claims to be using AI but isn’t, what else might it be hiding?
Misleading AI Claims: A Growing Problem
The overuse (and misuse) of AI as a marketing buzzword is rampant. Companies often tout “AI-driven” solutions to attract funding and customers, even when the actual implementation is minimal or nonexistent. Here’s why this is problematic:
Customer expectations are mismanaged.
When businesses invest in AI-driven tools, they expect efficiency, accuracy and reliability. Failing to deliver on these promises can damage client operations and trust.
Investor confidence is undermined.
Investors fund innovation, not smoke and mirrors. Misleading AI claims can lead to funding based on false premises, risking legal and reputational consequences.
The industry’s credibility takes a hit.
As more companies overpromise and underdeliver, skepticism around AI grows, hindering adoption and innovation for those using it responsibly.
Why Transparency In Private Companies Matters
Company shutdowns and misleading AI claims expose a glaring need for better accountability from private companies. Here’s why it matters:
Customer Trust: Customers rely on private companies to deliver essential services. Sudden closures or exaggerated capabilities erode trust and create widespread disruption.
Investor Confidence: Ethical transparency is key to attracting and retaining investors who support long-term growth.
Industry Integrity: Transparency helps separate responsible companies from those prioritizing short-term gains over sustainable success.
But how do we create a framework for accountability without stifling innovation?
Toward A Culture Of Accountability
Here’s what needs to happen to foster a more transparent and ethical private sector:
Disclose material risks.
Private companies raising significant funds should be required to disclose material risks, including financial losses or operational challenges. This doesn’t mean revealing trade secrets but ensuring stakeholders aren’t blindsided by major developments.
Define clear standards for AI claims.
Regulatory bodies or industry groups should establish guidelines for marketing AI capabilities. If a solution isn’t fully automated, companies must disclose the extent of human involvement.
Focus on cash flow management.
Leadership teams must prioritize financial health over growth-at-all-costs. At my company, we ate the cost of our AI experiments but maintained cash flow discipline to avoid jeopardizing our operations. Responsible management matters.
Encourage customer education.
Customers should be empowered to ask hard questions about the companies they rely on. Transparency should be a selling point, not an afterthought.
Reevaluate BOI rules.
The beneficial ownership information (BOI) reporting rules require small-business owners to disclose details that arguably pale in comparison to the risks posed by private companies raising millions with little oversight. If small businesses must report their ownership, shouldn’t larger companies also face scrutiny for risks to customers and investors?
A Final Word
At my company, we’ve learned that innovation and transparency can coexist. By pivoting from AI hype to reliable, expert-driven solutions, we’ve built a stronger, more trusted platform. But not every company takes this approach, and that’s why we need industrywide accountability.
Let’s start the conversation: How do we ensure private companies disclose material risks? What should the standards for AI claims be? And how can we create a culture of trust in the private sector?
The tech world is moving fast, but ethics and transparency must keep pace. Customers, investors and industries deserve nothing less.
The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.
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