About the 1C situation
A few thoughts on the 1C situation, though competitors are not talked about out loud.
On the one hand, it seems that yesterday the state dug a hole for 1C, and they are our competitors, and I, as the head of the Smart Accounting project, should be happy and cheerfully take a piece of the accounting market for individual entrepreneurs. But I am not happy — I believe that strong competitors allow us to grow and develop faster and more logically. And 1C today is the only adequate player in the accounting market. And 1C’s monopoly position in the market is not a consequence of collusion and administrative resources, but a consequence of the availability of management accounting and compliance with regularly changing legislation.
Many will say: there are a million alternatives à la SAP, but in everything made in Europe and the United States, the very concept of management accounting is absent as a class. They simply don’t work there with schemes and “off the books”, and therefore don’t automate these processes. And today, unfortunately, this is the reality of Ukraine, and without liberalization of tax legislation, the economy will not come out of the shadows. By the way, a note to the Presidential Administration: liberalization should have been the starting point.
Thus, for now everyone needs management accounting, which is not available in products for the European market. Therefore, I assert: there are no products for legal entities on the general taxation system in Ukraine today. Now about the victory speeches and statements that tomorrow national Ukrainian solutions will appear. We have spent more than one year to create and maintain a convenient product for a very narrow niche of individual entrepreneurs on simplified taxation, and we understand that the market capacity of accounting products for Ukraine is negligible by world standards, and the cost of programmers who can just as well write products for Europe and the USA is very high.
And with the expansion of the product to the segment of legal entities on the general system, the complexity of the product — and as a consequence, the development time — grows exponentially. Legislation in Ukraine changes with every change of power and exclusively in the interests of whoever is at the top of the food chain in Ukrainian politics at the moment. And supporting the product at such a speed of changes to the tax code, in such a small market as Ukraine, is possible only when Ukraine is 25% of the total product market, and all the other 75% of the market have approximately the same taxation system as ours.
Therefore, I do not believe that someone will go write a national product with a very real probability of tomorrow running into a new tax code and wasted money and time. As European taxation standards are established and business adapts to tax responsibility and increasingly strives for accounting according to IFRS standards (so if we go to Europe, we liberalize and bring the country’s tax system to European standards, teach business to pay taxes), major European players come in — SAP for example — and then 1C gradually loses its position (after all, 1C has no market share in Germany). But it’s silly to start from the end.
And the situation with 1C will not affect Smart Accounting, Smart Showcase and Smart Help for entrepreneurs in any way, because for individual entrepreneurs on simplified taxation, 1C was never really there and never will be, because 1C is primarily for the accountant, and we are primarily for the entrepreneur.