ERP Systems in Russia – 1C vs. SAP

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By Thomas Titsch, Director ERP

When a foreign company wants to enter the Russian market, they need to answer the question of which system to use for accounting and enterprise resources planning. Usually, this means either rolling out the corporate template they are using at home or setting up a local solution. In reality, in the vast
majority of cases, this comes down to a decision between the most common systems in the Western
corporate world: SAP and the Russian 1C.

What to consider?

When you are just about to start your business in Russia, 1C has a lot of advantages. The system is well adapted to the Russian legal requirements and common practices in the market. Hence, the system can be implemented within a short time frame. In Russia, 1C is nearly an industry standard for accounting and ERP; virtually every Russian accountant is skilled in using the system. In case the legal requirements change, the system is updated very quickly and can be implemented in a very
short time.

By comparison, SAP is strong in facilitating harmonized business processes for companies
working around the whole world. It is also known for it’s capabilities in logistics, production planning,
handling large volumes of data. These features combined are a precondition for “just in time”
production, and integrating into global supply chains.
The trade-off for this flexibility is more complexity in the system setup: its wealth of options may become
a burden. Even with simple business processes, an SAP roll out could take four to six months plus
one to two months post go-live support. SAP may also require additional coding to keep the existing
SAP template running under the conditions of the Russian market.

Transparency and Compliance

Other strengths of SAP are transparency and compliance. Once an accounting entry is made, only some text description can be changed. All financially relevant fields are fixed. If there is a mistake, an accounting entry needs to be reversed and entered again.
In 1C, this can be achieved only by organizational means and authorizations. Otherwise, as long as
the accounting period is open, you could change financially relevant information in a posting later on
or just delete the entire accounting entry.
In SAP, there is a clear distinction between the document date (e.g. the date printed on an invoice
received), the posting date (date, when a document is put into the books), and the system date (i.e. the
date and time of the actual data entry). In other words, when you doubt whether a particular
document was entered when it should be, in SAP you can see exactly when it happened. 1C does not
make this distinction.
Besides that, the SAP authorization concept allows a sophisticated set up of roles and access rights allowing a clear segregation of duties andSOX compliance according to Western standards.

Last but not least, language matters. 1C supports Russian by default. There are some more or less
comprehensive English translations by third party providers on the market. SAP supports basically all relevant languages (including Russian).

Not without professional support

Given the points above, if the business reaches a certain size with respect to revenue, data volume or
number of users, companies have a clear tendency towards SAP.
When moving from 1C to an SAP system, you should ensure the support of consultants, who are experienced in Russia and know the differences between legal requirements and common practice.
Another advantage that cannot be valued highly enough is the participation of accountants that know both worlds, 1C and SAP. They are able to reassure your employees, explaining the differences between the systems in a way that is understandable for your accountants and thus ease the parting from the “beloved” legacy system.

We at SCHNEIDER GROUP consult and provide our international clients with the back office services they need to expand their business into or within Russia, Kazakhstan, Belarus, Ukraine, Poland and Germany. Our services include accounting outsourcing, tax consulting, import, EPR systems and support in legal matters. To increase their efficiency and profit, we implement and develop modern technology and constantly improve processes and workflows. We have been utilising the very solutions we provide for over a decade among our 500 experts.

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