"It's a special moment – two forces are coming together, which will have a huge impact on Poland's SMEs. One is digitalisation – Poland is nowhere near the top league when it comes to business digitalisation. It's currently in 25th place out of 28 EU member states. Over 85% of Polish SMEs are not fully digitised.
"There are reasons behind this. In the past, the Polish labour market was very deep; entrepreneurs could ‘enjoy’ the benefits of a high unemployment rate – you didn’t have to digitalise when you could take on an extra pair of hands. But today, the Polish economy is creating more work than its labour market can supply. Ukrainian emigrants are coming to work in Poland to fill gaps, so the time to subsidise lack of IT systems is over."
Mr Ciski's message to Polish entrepreneurs is stark: "Don’t complain about the labour market – salaries will continue to grow, get used to it." GDP growth and demographics are making rapid change inevitable. "An economic slowdown will make going digital more difficult. This is the last call to automate repeatable processes in your enterprise. We are behind, now is the time to catch up."
"Many old-fashioned businesses are asking how to digitalise. The global economy is lapping at their feet. 'What should I start with? How should I start?', they are asking. 'Why should I change? I’ve been successful so far...' The quick answer is 'It has to be well-delivered and repeatable'."
"There is a need to change to stay competitive in Poland and globally. Unless you are delivering ever-more complex, more advanced solutions, someone, somewhere will take your place."
The second force – my second message – is that Polish entrepreneurs need to get ready for legal changes and for TaxTech. "Tax is getting digital and becoming more complex. There used to be one tax declaration to be completed, once a month. Now there’s one per transaction. Declarations are becoming more detailed, offering ever more granularity. The future will be real-time tax reconciliation. Every transaction will have its own electronic reflection. This is real time reporting, and it will require a big change in accounting mentality."
From 1 April, new regulations will make mandatory the integration of sales and accounting systems. "This will be big burden on business, a bit like the implementation of JPK – Single Audit File (Tax) – first big corporations, then mid-sized firms, then smaller ones, finally micro-businesses employing one to nine employees. The Polish government's future financial needs will require the tax system to be sealed, and not leaking. The way this will happen is that each transaction needs to be assigned to a category to the Ministry of Finance – not into the accounts systems but in the sales systems. This will affect vendors of sales platforms and makers of digital fiscal registers (kasy fiskalne). Bridges will need to be built between specialised sales systems to reconcile transactions generated out of the accounts system – and this will have to be done quickly to allow for sales made after 1 April to comply with the new requirements."
"Tax is quite advanced in Poland in terms of the technology. Here, Poland is one of top countries. But it should learn from the UK certain ways of interaction between the tax authorities, the entrepreneur and the tax software companies. We are rapidly moving from physical audits, when tax inspectors would enter buildings to look at the books, to purely digital interaction. This requires a culture change. A revolution.
"In the past, a bill would go from the Ministry of Finance, through Sejm, and become law. The chief finance officer would then have 30 days to learn how to fill in the monthly tax declaration according to the new rules. But today, there is an intermediary sitting between the authorities and the entrepreneur, a third player in a triangle – the tax software company. Sage is one such intermediary. Thirty days is not enough time to prepare the technology for a new online tax declaration form. Three months is needed. How fast can tax software companies adopt the new law into new systems?
"Yet the status of tax software companies such as ourselves is not recognised at all – how well do the legislators understand the systems and goodwill between ourselves and our clients? A cooperating culture is needed. It is the prime responsibility of the Ministry of Finance to educate the business community as to forthcoming changes. Countries leading the way here are the UK and Portugal, where the implementation of SAF-T first established close cooperation between the finance ministries and tax software companies. Certification here is key – software that is certified by the Ministry of Finance as being up-to-date with the latest changes.
We have talked about the demographic aspect of the labour market. But there's another important demographic turning point ahead, coinciding with the forces of digitalisation and regulation. Between 1988 and 1990, 1.4 million businesses were set up to fill the void left by the collapsing state sector. "Today, many of those first-time, first-generation Polish entrepreneurs are looking to give up their businesses and retire. For Polish independent family businesses, succession is a hot topic. For some business owners there will be a natural path, but for many others, their children may have other goals, and so these entrepreneurs will have to seek outside help."
"More than ever, the Polish entrepreneur needs to be guided, like a ship avoiding a collision course. But who stands ready to help? There is a big problem with trust. Many business owners are not ready to let an outsider into their business. In the UK, with its traditions of openness in business, it's much easier. There are many mentors willing to help, and many consultancies specialising in working with SMEs. In Poland there is a shortage of consultants ready to help, especially in smaller towns outside the big cities.
"For Polish family businesses there's a spectrum of advisors – decide what colour you need, define your business model, document your workflow, manage your production. Pan Kazimierz knows how to run your production line, but one day he might not show up your the factory. So his knowledge, his recipes for your production line system need to be replicated into your systems so that one day, you can substitute them for the lack of such a guy.
"Small consultants might be ex-Big Four in regional centres, freelancers with the capacity to take on up to a maximum of three clients. But generally, the Polish economy needs smaller, cheaper, more agile consulting companies to guide SMEs through the automation processes. Consultants have tended to be expensive; entrepreneurs still see little value in external advice, education is needed.
"In Poland today, business angels are either looking for the big deals or for new businesses with the potential to quickly scale up. Existing small and medium-sized businesses in traditional sectors of the economy are of little interest to them. And there are not enough consultants, mentors or business angels to go around.
In Germany , there is a natural process of consolidation going on. A good example can been seen within the network of Sage resellers; as one reseller considers retiring from the market, neighbouring resellers look to grow their customer base by acquiring the businesses whose owners are leaving the market. This is not happening in Poland.
"The main indicators of the economy do not change – GDP, inflation, unemployment. But business models do change. Polish entrepreneurs have to decide how to invest and what to invest in. How to digitise. Find your hotspot and drive your ideas. If Poland is to be successful and competitive as a nation, its small- and medium-sized business must deliver complex goods and services in a fast-changing global economy. The best business model can be nicely replicated."