With so many small and medium businesses using e-conomic, it’s essential for us here at e-conomic to know as much as possible about the priorities, concerns and wishes of businesses when doing their accounting. This applies not only to us as their accounting system provider, but also to their accountants.

That’s why we have recently done a survey asking business owners what they would most of all like their accountants to do better.

The most common answer? Higher availability.

Moving accounting online

A mobile world

As one of the business owners said: “I’m on the move all the time and rely on my smartphone and netbook– it would help if more accountants did the same rather than relying on face to face meetings.  I haven’t got the time – or appetite for that really”.

There is no getting around it: The world is now mobile. It has already become completely natural to us to work on the move and have all data available around the clock.

For accountants, this means that their clients are now increasingly expecting them to communicate and interact using modern technology – and to use this technology to be more easily available.

More advice and fixed fees

Another popular request from small and medium businesses was for more general business advice from accountants. “While I accept that my accountant has to do the number crunching and get that absolutely right – it would also be useful to have them as  a sounding board when I am thinking of ways  in which to grow and improve the business,” said one business owner.

Fixed fees rather than billable hours was also high on the list of frequent replies. And in the category for miscellaneous issues were answers like “Getting a decent bottle of wine at Christmas rather than cheap plonk” and “It would be nice if they spelled my name correctly on correspondence!”

Cloud-computing for accountants

At e-conomic, we have of course been stressing the benefits of online accounting – not only for clients, but also for accountants – for a long time. By using a cloud-based accounting system, accountants can fully exploit and market online accounting in their pursuit of more efficiency and a more dynamic customer approach.

As an accountant you can use a system like ours to interact much more closely and quickly with your clients since you both have access to the same data and can make real-time changes that are immediately visible to all parties.

So, instead of insisting on face to face meetings, you can use an online accounting system to look at the same screen as your clients – allowing you to save time and make your clients happy.

Last week, I was interviewed in the Danish business media about my experience with banks and obtaining loans as a growth company.

Here, I described our paradoxical situation: We can present excellent results over the past years in terms of both growth and profitability (hence our newly-awarded title as Most Profitable Gazelle in the Copenhagen region), our number of customers is increasing rapidly, and we have a well-proven business case – yet, our credit in the bank has gone down by 50% over the past three years.

The explanation from the bank? Everything about our company looks fine, except that we don’t have a physical stock or real estate to offer as collateral.

Flawed argument

This is a flawed argument on at least two grounds:

First, no matter how well software companies like us perform we will by definition never be able to meet this requirement, yet no-one will dispute that software companies can be very profitable businesses nonetheless (in fact, the general consensus is that IT and other knowledge industries is one of the main opportunities for growth in Denmark).

And second, as the financial recession of the past years has made it very clear, physical collateral such as real estate really doesn’t constitute the security that the bank sector still seem to think it does.

Identifying sustainable businesses

 A bit cheekily, but also seriously, I would suggest that bank staff with decision-making responsibilities become better educated and equipped at identifying and supporting sustainable businesses. In fact, they could start by simply taking a look at other authorities’ evaluation of growth companies.

In our case, we can point to an AAA credit rating, held by only 5% of companies in Denmark.

Furthermore, we have a DKK 10 million guarantee from Vækstfonden (the Danish state investment fund) in place, based on their evaluation of the conditions and sustainability of our company.

This guarantee means that Vækstfonden will cover 75% of losses from our loan, thus minimizing the risk that banks will run.

Change the system

Yet these factors have not been enough to convince banks to even maintain our credit level. For the bank sector, the overriding concern is to cut down costs and reduce losses, to a large extent as a way of meeting the demands of the government’s Bank Packages.

So, if the government really wants to ensure that sustainable growth companies can thrive, the system needs to be changed.

How to move forward

The way I see it, what is required is for the government to play a more active role in helping growth companies.

One way to do this is for the state to act as a bank proper and lend money to companies through Finansiel Stability A/S (state-owned financial institution).

Another way is by actively forcing banks to accept guarantees from Vækstfonden so that companies can use these as vouchers that enable them to obtain a bank loan with the full amount from the guarantee.

If you have any other ideas or suggestions for how to improve this situation, please let me know by leaving a comment.