How much does an ERP cost? Pricing models and the real cost of ownership

Why the headline price is only the start

An ERP quote usually leads with a monthly figure per user. That number matters, but in the first year it may not be the biggest cost. Setting the system up, moving your data, training your team and the time your own people put in can each add up to a real sum.

Two quotes with the same monthly price can end up far apart once you add those in. Two quotes with very different monthly prices can end up close. The only fair comparison is the total over a sensible period, and three years is a good one: long enough to include the one-off costs, short enough to estimate honestly.

Before you start, it helps to be clear on what an ERP is and which modules you actually need. Pricing questions get much easier once you know the scope.

The common pricing models

Vendors mix and match these. Read each quote carefully to see which ones apply.

Per user

You pay a fee for each person who logs in, usually per month or per year. Look for:

• Named or concurrent users. Named means a licence per person. Concurrent means a licence per person logged in at the same time.
• User types. Some vendors charge less, or nothing, for people who only use self-service features such as leave requests, expense claims or payslips. Others charge everyone the same.
• Minimums. A minimum number of users, or a minimum contract value, can make a cheap per-user price expensive for a small team.

Per module

You pay for each functional area you switch on, such as accounting, inventory or payroll. This can look flexible, but adding a module later raises your bill. Ask what you would pay if you added the next two modules on your list.

Tiers or bundles

Plans with names like basic, standard and advanced, each with a set of features. Check which tier includes the features you need. A key feature such as multi-currency or approvals sometimes sits only in the top tier.

Usage-based charges

Some costs scale with activity rather than people: number of companies or legal entities, transactions, documents, storage or API calls. These are easy to miss because they start small.

Licence plus maintenance

Self-hosted systems may charge a one-off licence fee, then an annual maintenance fee for updates and support. You also pay for the servers, backups and the people who look after them.

The costs outside the subscription

These are the items that turn a reasonable quote into an over-budget project. Ask for each one in writing.

• Implementation. Configuring the system for your company. Ask whether it is a fixed fee or charged by the day, and what happens if it runs over.
• Data migration. Moving customers, suppliers, items, the chart of accounts and opening balances. Ask who does the work, and whether historical transactions are included or only balances.
• Customisation. Changes to how the product works for you alone. Customisations can also make future updates harder.
• Integrations. Connections to your bank, online store, payment providers or other tools. Ask whether they are built in, paid add-ons, or a project for a third party.
• Training. How your team learns the system, and in which languages.
• Support. What the standard support covers, the response times, and whether faster support costs extra.
• Add-ons. Payroll, e-invoicing, extra companies, AI features, chat or document storage can each be priced separately.
• Your own time. The hours your finance and operations people spend on the project, on top of their normal work.
• Price changes. How much the price can rise at renewal, and whether you can lock it.
• Exit. What it costs to get your data out if you leave, and in what format.

If you are coming from spreadsheets, our step-by-step migration checklist shows where the internal time tends to go.

Working out the three-year total

Build a simple table with one row per cost and one column per year. Put one-off costs in year one.

The example below uses invented figures, purely to show the arithmetic. They are not any vendor's prices, and the currency does not matter.

Say you start with 12 users at 50 per user per month, grow to 14 users in year two and 16 in year three, and the vendor allows a 5% rise at the start of year three. You also add a separate add-on for 20 people at 4 per person per month.

Three-year total: 16,660 + 9,360 + 11,040 = 37,060, or about 12,350 a year on average.

Now do the same for the way you work today. List every subscription and connector, your accountant's extra hours, and staff time spent re-keying and reconciling. Say two people spend three hours a week each on work a single system would remove. That is 300 hours a year. Multiply by what an hour of their time costs you and add it to the "today" column.

You now have two honest numbers to compare. Our free e-book, Outgrowing your accounting software, includes a printable cost worksheet laid out this way.

Questions to put to every vendor

1. What exactly is included in the per-user price, and which modules cost extra?
2. Do people who only use leave, claims or payslips need a paid licence?
3. Is there a minimum number of users or a minimum contract term?
4. Is implementation a fixed fee? What is not included?
5. Who moves our data, and what do we have to prepare?
6. Are extra companies, currencies or warehouses charged separately?
7. How much can the price rise at renewal?
8. What does monthly billing cost compared with yearly?
9. Which taxes apply to the invoice? This depends on where you and the vendor are based, so check your local rules.
10. How do we export all our data if we leave, and is there a charge?

Ask for the answers in the written proposal, not just on a call.

Ways to keep the cost down

• Start with fewer modules. Fix the most painful process first, usually finance, sales and stock, then add others once the first set is running.
• Clean your data before you move. Every duplicate customer or inconsistent item code you fix yourself is time you are not paying someone else for.
• Avoid customisation in year one. Use the system as it comes for a few months before you decide what really needs to change.
• Count your users carefully. Separate people who work in the system every day from those who only need self-service.
• Pick a sensible start date. Starting at the beginning of a month or financial year means fewer adjustments and less rework.

To see how different kinds of systems compare beyond price, look at our ERP comparison. And if you are still deciding whether to move at all, start with the signs you've outgrown your accounting software.

Where Nyra fits

Nyra puts accounting, sales, stock, HR and payroll in one database, so there are fewer separate subscriptions and connectors to pay for and keep running. You can run several companies in the same workspace, each with its own legal details and tax registrations, and every invoice, bill and journal tagged to its company, and work in any currency. Chat, mail, meetings and documents are a separate paid Workspace add-on, so include it in your comparison if you need it. Data comes in through an import wizard that reads spreadsheets and shows every row for review, and records such as customers, suppliers, items and journal entries can be exported again as CSV or XLSX files. Book a demo and bring the questions on this page with you.