Free accounting software is no competition for leading softwaredeveloping firms. Accounting software developers aspire to customize their products to serve clients better and save them costs.
Around one year ago, an announcement from Számviteli Innovációs Iroda Kft. caused a huge uproar by promising to disrupt the accounting industry. With the help of massive EU funds, the company came up with an online platform that offered corporate clients not only the use of accounting software, but also related accounting services free-of-charge. True enough, local SMEs are notoriously price-sensitive. However, according to Ida Szabó, software consultant at Kulcs-Soft Számítástechnika Nyrt., if a company thinks long-term and counts on ballooning turnover, free-of-charge services will soon reach their limits. “Enterprises would like to make sure that their confidential business data is in the best hands. Stable, permanently up-todate and reliable operations and support are key aspects; it is not necessarily the cheapest solution that is sought,” she told the Budapest Business Journal.
Money-for-value rules on the Hungarian market: “Clients strive to get the cheapest solutions that best suit their needs,” Szabó noted. “Young firms tend to have little insight of how their register-related tasks would evolve in the future and the overall ‘business administration culture’ is far from perfect. All this drives companies wishing to develop to find a partner that supports them with advisory and support services. And that is where a developer partner firm with a solid track record can help enormously with its decades-long expertise.” As Szilárd Ocskay, managing director of NEXON, the market leader in the segment, pointed out: “In the area of HR management, free software does not pose competition since it is typically used by micro companies. Tax regulations are extremely complex, they can change many
times over the year and failure to meet deadlines results in heavy fines. We’ve got 50 colleagues that continuously work on updating and making software compliant with the effective laws.” Ocskay thinks that in order to acquire and keep customers, it won’t do if software simply complies with the law. The bar is set a lot higher; expectations include userfriendly, intuitive platforms or innovative technology. “We are keeping up with the latest trends. As a result, a self-helpbased e-HR system has been developed that allows employers and employees to manage their own HR-related matters,” Ocskay said.
Fast working and efficient customer service also plays a key role in earning long-term trust, according to Richárd Varga, senior sales manager at VT-SOFT Software Kft., a subsidiary of UNIT4, a global leader in offering business software. But tailor-making products for customer needs is equally important. “UNIT4 is unique in its effort to develop software where changes can be configured which ensures in the mid-term the best TCO for its partners. Customized configurations substantially boost efficiency, employee cooperation and satisfaction,” Varga said. “By using our financial solutions, clients can adapt to business changes on their own; they can, for instance, add new processes or controlling analytics without any additional development.” Customizing software may require cooperation on the part of clients as well, though. “It may occur that companies’ own management processes can or must be simplified,” Szabó pointed out. “In such cases standardized package solutions available on the market are perfectly fine to start with, as they can then be tailormade to a great extent. On other occasions, special software needs to be developed from scratch if those standardized packages don’t satisfy customer needs. That is rather typical for larger corporations.”
Tax software could aid compliance
Unlike many developed market economies, Hungary has virtually no specialized tax software – though it could contribute to more efficient and accurate tax payments.
Using software to optimize the corporate tax bill is more than widespread in developed market economies. Whereas general accounting software packages are used to keep track of business activities such as daily sales, inventories or payroll, all the final balances of profits, costs and the sort are normally transferred to tax account software. Such specialized products then help calculate the most ideal tax scenario.
According to a recent World Bank Group report, such tools even tend to be overused in some parts of the world; in Hungary, however, they are virtually unknown.
“There is no such thing in the sense as applied in the West. You have accounting and payroll solutions that help keep track of overhead costs or prepare returns. But the actual tax optimizing does not take place in an automated fashion. They engage human expertise instead for that purpose,” the CEO of a company that has been on the software development market for more than two decades, but who asked to remain unnamed, told the Budapest Business Journal.
“Executives prefer to consult their accountants or tax advisors when they need tips as to how to save on taxes. Their involvement seems to be overwhelmingly predominant and there’s no sign whatsoever that things might move into the direction of automation any time soon,” the company executive said
Yearning for stability
The reason why no market has developed for specialized tax software lies mainly in the fact that, like it or not, Hungary has never been famous for a stable and transparent tax framework. “With rules changing all the time, you can’t expect software firms to invest into developing such products, and clients wouldn’t look for them for the same reason,” the expert pointed out.
Small- and mid-sized firms are reluctant to pay for any software in the first place and if they do, they opt for material specializing in accounting. “They want to make sure that in the case of a tax inspection they have a button to press which then provides them with the data requested by the authority. But that’s where their interest ends.
”The popularity of tax software elsewhere would suggest that reducing the amount of manual work or human engagement in tax accounting should benefit businesses. Tax compliance in Hungary could definitely use an upgrade through the widespread introduction of specialized tax software. In order to encourage firms to move into that direction, a predictable legal environment must come into play.