Digital de-occupation: how to migrate from 1C to Microsoft Dynamics 365 Business Central

April, 2026

We are in Innoware We appreciate and are grateful to our Information Partner - the publication «"Computer Review"» for a responsible and principled position on the need to replace 1C/BAS and other software of Russian origin to safe alternative solutions. We are happy to share expert article editorial prepared based on the results webinar «"From Dependence to Control: Why Ukrainian Businesses Are Rejecting Russian Accounting Systems and Choosing Microsoft Dynamics 365 Business Central", organized by companies Innoware and Promise Group

Against the backdrop of the Russian Federation's military aggression against Ukraine, the issue of digital hygiene and the rejection of software from the aggressor country has moved from the category of "desirable" to the status of "critically necessary" for the survival of domestic business.

Company Innoware, which will celebrate its 25th anniversary this year and has over 500 successful projects implementing ERP and CRM systems for corporate customers in different parts of the world – from Europe to Africa, – held webinar, dedicated to the transformation of accounting systems.

Head of Microsoft Dynamics 365 Business Central at Innoware – Olena Chernets During her speech, she emphasized that migration is now not just a change in interface, but a strategic choice between isolation and integration into the global economy.

Toxic legacy and the illusion of a «safe» BAS

The main message of the meeting was an uncompromising position on 1C and BAS products. Many entrepreneurs still harbor the illusion that switching to Business Automation Software (BAS) is a sufficient step to diversify risks, since the brand is nominally registered in Poland. However, Olena Chernets dispelled this myth: «Switching from 1C to BAS is not a rejection of Russian software. Despite the fact that BAS is nominally registered in Poland, the beneficiaries, owners and investors of this product are the same people who own 1C.» This fact is also confirmed at the state level: in January, the State Service for Special Communications officially included both systems in the list of prohibited software for the public sector, and experts are confident that similar restrictions will later affect private companies.

Using software with Russian roots today is a direct sponsorship of war and a huge operational risk. «By switching from 1C to BAS, we continue to sponsor war and expose ourselves to danger,» warns Olena. Among the critical threats, she highlighted sudden data loss (there have already been recorded cases of inability to connect to systems), espionage of employees’ personal data, and reputational losses.

The Microsoft Ecosystem: More than Just Automation

The world is moving away from the concept of isolated solutions in favor of global ecosystems. Microsoft Dynamics 365 Business Central is the core of such an ecosystem that combines ERP, CRM and supply chain management systems. The main value lies in seamless integration: the user can upload data to Excel or Word, edit it and return it, send invoices directly from Outlook or Teams. Thanks to the Azure platform and Power Platform tools, companies get access to Copilot artificial intelligence, which helps automate routine tasks, and Power BI for deep analytics.

As Olena Chernets noted: «This platform provides many advantages because you use all the applications together. You can send any information quickly to Teams and view it immediately.» This provides businesses with the flexibility to scale: from a small startup to a corporation with thousands of employees, without restrictions on the number of companies within one environment.

IW Localization

The traditional barrier to implementing Western accounting systems was once their incompatibility with Ukrainian legislation. Innoware solved this problem by creating its own extension IW Localization. This solution fully covers VAT accounting requirements, including the "first event" rule, and adds specific printed forms, such as reconciliation acts, commissioning acts, and write-offs of fixed assets, which are missing in the standard version.

The module deserves special attention IW HR&Payroll, which provides a full personnel cycle: from vacation or mobilization orders to complex payroll calculations and tax withholding. «The modules were developed and completed so that the Ukrainian accountant could find familiar processes in a familiar format,» the speaker explained. In addition, integration with the MEDoc service has been implemented: the accountant can create the necessary forms in Microsoft Dynamics 365 Business Central, upload them to XML and upload them to Medoc for reporting.

Transition strategies: from Li packagesght to turnkey projects«

Implementing an ERP system is a long game. Olena Chernets compared this process to the most complex business operations: «ERP system implementation projects are among the most complex projects in principle, only mergers and acquisitions are more complex.» For success, it is critical to form an internal team of «progress drivers» and choose a partner you can trust.

Innoware offers three approaches to migration. The first is package solution (Light/Basic) – optimal for small and medium businesses. The price starts from $400, and deployment takes up to one week. However, this requires maximum involvement of the customer, who must independently process the training materials and transfer the leftovers.

The second is a classic turnkey implementation for large companies with hundreds of users. It includes a stage of in-depth analysis, interviews with process owners, and the creation of "design documents" that capture the concept of implementing each process in the new system.

Finally, the third is a combined approach - a combination of package settings for standard areas with individual training and developments for specific areas, for example, complex production.

Financial model and update issues

Microsoft Dynamics 365 Business Central operates on a subscription model (SaaS), which frees the company from the costs of servers and SQL licenses. «Microsoft does the copying and backup for you,» the expert notes. The cost of the basic Essentials license is $80 per user per month, and Premium (required for production) is $110. There is also a savings option - a Team Member license for $8 for management, which only needs to view reports, or a «device» license for shared computers in production.

Ukrainian localization is paid separately: $27 for accounting and $20 for personnel accounting. Payment for licenses guarantees constant receipt of updates from Microsoft and Innoware, but their termination leads to loss of access to the environment after two months.

Data migration and parallel accounting

Technically, the transition from 1C is carried out by filling out Excel templates, since "there is no automatic process that would allow you to simply transfer data" due to the huge number of individual changes in each database. Innoware recommends downloading only directories and initial balances, since transferring the entire history of operations requires too expensive development.

After the system is launched, the period of parallel accounting is critically important. «A month, two or three is the maximum period of parallel accounting. This is good for increasing the level of trust of end users, but it is important not to delay it due to the enormous burden on them,» advises Olena Chernets.

Experience of leaders: Orbico and Leoni

The real effectiveness of Microsoft Dynamics 365 Business Central is confirmed by cases of major players. The international group Orbico, which unites 18 companies in 20 countries, has been using the system for over seven years, receiving support from Innoware in Ukraine and Moldova. Leoni Company, which employs over 4,000 people in Ukraine, cooperates with Innoware since 2003. Interestingly, Leoni uses a hybrid model: finances are managed in corporate SAP, and HR and payroll are managed in Microsoft Dynamics 365 Business Central with IW HR&Payroll localization. «This is an argument that you can start with some part of the functionality, it is not necessary to switch to everything at once,» the speaker summarized.

As a conclusion

Transition to Microsoft Dynamics 365 Business Central is an investment in digital independence. The system allows you to keep records according to PSBO and IFRS, integrates with any external services via API and is preparing for the implementation of SAF-T electronic reporting standards. In times when every hryvnia paid for Russian software turns into a weapon against us, choosing a global and secure platform becomes the only sure way for the development of Ukrainian business.

The original article is on KO.