4 Questions to Ask To Lower the Cost of Accounting Software User Licenses

When you are trying to determine the price of accounting software here are 4 questions to ask your accounting software vendor or VAR:

1)     How many accounting software licenses do I need?

To calculate the software license cost of accounting software, the first step is to determine the number of people (or users) that will need access to the system.  Remember, this can include people who may be outside the accounting department. For example, salespeople who manage orders may need access to look at invoices or purchasing history. People in the shipping area may need to see whether a particular order is paid and ready to be shipped.  A good software partner will guide you through this process and help you determine what type of access is needed by different users and how you can save money.  Of course, the fewer users you purchase access for, the lower the price. For example, if some people only need access to reports, consider publishing these on a web portal with limited access instead of buying an extra user license.

2)     Is the software sold by user-based pricing or module-based pricing?

User-based pricing means you will pay one license fee per user, which includes access to all modules in the system.

Module-based pricing means you buy the functionality you need (general ledger module, accounts payable module) on an a la carte basis, plus a small per user fee.  If you only need very limited functionality, both now and in the future, buying a module based system can sometimes save you money.  For most companies though, user-based pricing is often a better value and a better investment because you get more for your money.

Microsoft Dynamics GP ERP/accounting software is sold on a user based pricing model. For example, if you buy 1 user of the Business Essentials edition, that user can get access to every module in that version. (of course you can restrict this based on the security roles).

3)     Is the system priced by concurrent users or named users?

If a  system is sold by concurrent user this means that you only need to buy licenses for the number of people who will access the system at the same time.  So  if you have 10 people who use the system you can set them all up with credentials and security rights, but if only 5 of them need access at the same time, you only need to pay for 5 licenses. (the 6^th person who tries to login will be denied access until someone else signs out).

In named user pricing, you must pay a license fee for everyone you set up in the system.

4)     Will you give me the first three users for $1?

To get the deep functionality of Microsoft Dynamics GP the software cost is $2,250 for 1 users on the Business Essentials edition and  $3,980 for 1 user on the Advanced Management edition.  But until June 25, 2010 you can get those same users for just $1.  Essentially, if you need 1, 2, or 3 users you get the software for free.  If you need extra users you pay for those, but you have still save a big chunk of cash.   The only “catch” is that you must agree to pay the 18% maintenance fee on the normal system list price – for 3 years. (usually it is only required for one year).

If you have been considering Microsoft Dynamics GP, now is the time to make the investment, for a lot less cash that you would have paid yesterday. (Once that promo expires there are usually new Dynamics GP discounts available but I have never seen one this good.)

But do keep in mind, there is more to the cost of a Microsoft Dynamics GP system than just the price of the software.   To learn more about how to budget the cost of implementation services and hardware request our free white paper: “30 Questions Every CFO Must Ask About the Cost of Accounting Software” or “Beyond Software: How to Estimate the Cost of ERP Software Implementation Services”

By CAL Business Solutions, Connecticut Microsoft Dynamics GP Partner