Do you really need ERP software for small businesses?
If you're a growing business with multiple entities, you probably already know, either from research or firsthand experience, that an entry-level accounting solution like QuickBooks or Sage 50 isn't sufficient for handling your financials. You may be thinking about heading in the other direction, toward enterprise resource planning (ERP) software for your businesses, even though it probably has more functionality than your small- to medium-sized business really needs.
And you can end up purchasing an accounting solution that is more than you need. The good news is, there are accounting solutions on the market — specifically Gravity Software — that provide much of the same functionality as a large-scale ERP but without the drawbacks associated with a system that's too big for your business.
What type of financial tracking system does your business truly need?
ERP systems are attractive because they tie many aspects of an organization together into a single source of truth, increasing interdepartmental transparency while providing opportunities to increase productivity through automation and collaboration. Many include customer relationship management software, distribution and manufacturing, sales management software and more.
ERP systems are large-scale solutions designed to fulfill needs a small- to medium-sized business might not have. When deciding whether your business could benefit from an ERP system, there are several points to consider, but two should be top of mind.
Your company as it stands now
What are your company's current needs, strengths and weaknesses? Do you really need an ERP system to solve your problems and fulfill your requirements, or would a targeted middle-market accounting system work equally well? If your business is a concierge healthcare company in which individual practices handle hiring, terminations and other personnel concerns, for example, then seeking out an ERP system for its human resources capabilities doesn't make sense. Individual entities handle that on a scale too small to warrant an ERP. Bear in mind that in a survey of companies seeking an ERP system, 89% of respondents listed accounting as the most critical function.
Your company's near future
Based on a realistic view of your company's trajectory and any concrete plans you have for the next 5-10 years (note the terms "realistic" and "concrete"), what are the capabilities you need from an accounting solution? Avoid "just in case" thinking. If your eCommerce enterprise just broke ground on its own factory, it makes sense to look for a manufacturing-specific ERP system, but don't purchase a manufacturing ERP because you might possibly want to build your own factory someday.
Companies that commit to a large-scale ERP system when it's not the appropriate choice take several risks. Here are a few of them.
It must be the money – or maybe it's the time
You get what you pay for – but you also pay for what you get, even if you get more than you'll actually use. Notwithstanding hidden costs like hiring a consultant or customizing your software, ERP systems are expensive, and purchasing one you don't need is tantamount to throwing your shareholders’ money in the trash. In a family office, for instance, there will never come a day that you need software to help manage a sales team, and the family you serve won't thank you for wasting funds that could otherwise have been invested in future generations.
How much money would you be wasting? While acknowledging that determining the price of an ERP system is notoriously difficult because pricing depends on factors like company size and desired add-ons, the review site Software Connect estimates that, on average, an ERP system costs anywhere from $1,740 to more than $9,000 per month. This doesn't include implementation, support or training, and some ERP vendors charge a per-user cost in addition to a base subscription rate.
As for time, it's not out of the question for an ERP implementation to take, from planning stages to go-live date, as much as a year – that is, if it happens at all. The process of initializing an ERP system can be so cumbersome, it's estimated that 50% of ERP implementations fail the first time. Some ERP failures have been so disastrous as to result in lawsuits.
Why Gravity is a good alternative to ERP software for small to medium business
Gravity Software's pricing structure is designed to be affordable and flexible. Additional users incur lower costs, and Gravity provides limited-access and read-only versions tailored for stakeholders who need real-time information but don't need to be full-fledged users.
But lest you think you're sacrificing functionality in exchange for affordability and a faster timeline, consider this:
- Gravity is a multi-entity accounting solution that comes with multi-currency, inventory management, investment management capabilities and more, as well as options to add subscription billing and automatic revenue recognition.
- Gravity offers inter-company billing and consolidated financial reporting, just as you'd expect from an ERP system.
- Gravity users have access to the Microsoft Power Platform on which the solution is natively built, providing numerous opportunities for increasing productivity, visibility and collaboration via Power Automate and Power BI.
- Gravity seamlessly integrates with Microsoft Dynamics 365 Sales to give you a robust customer relationship management option. It also has built-in integrations with other business-enhancing software and applications including Jet Reports and Bill.com.
Another good reason to go with Gravity — it’s easier to learn and teach others to use.
G2 confirms that the learning curve and lack of user-friendliness are repeated complaints about ERP software systems such as NetSuite and Sage Intacct. You might even need to take prior experience with a particular ERP system into account in your hiring decisions.
Solid customer support can go a long way toward helping team members navigate a new software system, but that can sometimes be difficult to come by among large-scale ERP developers. Many companies end up working with an ERP consultant to help usher them through the implementation process and beyond. Some ERP developers, in fact, only sell their products through licensed vendors.
Even the best consultants can't change the fact that an overly complex ERP can affect your system operations and page load times. An extra few seconds to load a screen doesn't seem like a big deal in theory, but for team members who access the system dozens of times per day, those seconds add up to minutes and the minutes add up to productivity-crushing hours.
Why reinvent the wheel when taking advantage of an existing platform means additional user-friendliness and more flexibility as well as the backing of a globally renowned company? Gravity is intuitive, especially for users already familiar with Microsoft products. If your company could benefit from onboarding and training support, Gravity’s channel partners are happy to help.
A more user-friendly ERP alternative product doesn't mean a less innovative one, however. Gravity's newest features are proof that we consistently strive to incorporate cutting-edge technologies, seamlessly aligning with the capabilities of complex, large-scale ERP systems. They include:
- Accounts payable automation powered by AI.
- Automated bank book reconciliation.
- Multi-dimensional budgeting with the ability to categorize each expense or revenue stream.
- An online payment portal which, when coupled with Gravity's existing in-solution ACH and credit card processing, provides customers with a convenient, secure payment experience.
Schedule a demo today to learn how Gravity Software can give your company the benefits of an ERP system, minus the complexity and expense.
Better. Smarter. Accounting