Enterprise resource planning (ERP software) for small businesses gives you an affordable, easy-to-use, and secure way to manage business operations, financials, and sales. ERP systems typically include modules that you can choose from based on your company’s needs. For smaller businesses, it’s important to only choose the modules you really need to cut down on costs - you can always add more modules on as your business grows.
|Human Resources Management||Automate payroll processing, track time and attendance, and manage employee records like performance reviews, payroll benefits, and scheduling. Self-service functionalities allow employees to request time off or view their attendance record.|
|Financial Management||Track income and expenses and record transactions and account structures. Create financial documents like profit and loss statements and balance sheets.|
|Inventory Management||Track items you build, store, buy, or sell. Keep up-to-date stock records to avoid running out of items or buying items unnecessarily.|
|Customer Relationship Management (CRM)||Manage customer contact info, order histories, invoices, and quotes.|
|Supply Chain Management||Manage the flow of goods and services from raw material acquisition to delivery of the finished product to the customer.|
|Analytics and Reporting||Measure key performance indicators (KPIs) like income and expenses, top performing products, or open orders over a set period of time.|
Microsoft Dynamics 365 Business Central helps small to medium-sized businesses with business and financial management. Some features include financial reporting, supply chain management, customer relationship management, and project tracking. Microsoft Dynamics 365 starts at $70/user/month.
SAP Business One is a popular ERP solution for small to medium-sized businesses that can be deployed on the cloud or on-premise. Some functionalities include financial management, CRM, supply chain management, purchasing and procurement, and reporting and analytics. Pricing for SAP Business One is customized based on the number of users and the functionalities you need.
Sage Intacct is an online ERP system for small to medium-sized businesses. This solution assists with accounting and financial management, as well as order and inventory management. Sage Intacct is priced per month per user and is customized to your business needs.
The most common types of ERP software for small businesses includes:
Cloud-based ERP software is a popular choice among most small businesses due to the low upfront costs and lower monthly payments. Online software is easy to set up and scale with your business. As your business grows, you can add or remove modules as needed to customize the solution to your business’s needs.
Some ERP solutions are marketed as being only for small businesses. These solutions can be on-premise or web-based; though, web-based is more common for small businesses due to the generally lower upfront cost. ERP software for only small businesses is less complex and has limited functionality to cut costs and tailor to the needs of smaller companies.
Industries like discrete and process manufacturing, distribution, retail, and more use industry-specific ERP solutions to cater to their business’s unique needs. For example, small business manufacturers look for ERP with quality control functionality while construction contractors want project management capabilities. Examples of industry-specific ERP software that caters to small businesses include Apprise ERP for distributors, JustFoodERP for food manufacturers, and abas ERP for manufacturers.
Over the course of ownership, expect to invest between $25,000 to $150,000 on an ERP system for your small business. The price range varies greatly due to a variety of factors including the number of concurrent users, additional modules, implementation costs, ongoing maintenance, and training. Be aware of hidden costs that can make ERP software much more expensive. The ERP software vendor you choose should be able to help you choose only the functionalities you need to ensure your solution is cost-effective.
Most ERP solutions represented as free are meant to be more of a demo than a permanent solution. There are usually some costs associated with these systems to add functionality that are required for your business or installation and maintenance fees.
Some examples of free and open source small business ERP software include:
As a growing small business, you need to find an ERP system that will scale well with your business. You’ll likely need to be able to add more users or additional functionality as your business grows. When evaluating ERP solutions, don’t just rush into implementing a solution because it fits at the moment - think about the functionalities you will need in the next 3-5 years. As your business brings in more sales, you’ll need a more comprehensive system for managing orders, inventory, and invoices. As you bring on more employees, you’ll need to keep track of payroll, employee schedules, benefits, and tax information.
Many small business ERP systems allow you to add and remove modules as needed, as well as provides integration with other systems. Standalone software like business intelligence (BI) tools, CRM, and manufacturing execution systems (MES) might not be required now, but could be an important tool in the next few years. You can purchase a standalone system when you’re ready and integrate it with your ERP system without much trouble.