3 Tips to Save Money When Buying Microsoft Dynamics GP ERP Software – Users, Editions and Maintenance Fees

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When a company decides to upgrade their ERP/Accounting software to a package like Microsoft Dynamics GP, the first question that comes to everyone’s minds is, “How much does Microsoft Dynamics GP software cost?” Unlike other purchases it is not as easy as finding a price tag on a box.  You can find the Dynamics GP software list price, but this is only one part of the total cost. You still need to calculate the cost of implementation, integration, customization, training and support and there can be many variables. So coming up with your total ERP software project cost will require some research and the best advice I can give is to work with a good reseller partner.

But while you are doing your homework and comparing costs, there are  ways you can save money.  Here are 3 tips you can use to save money when buying Microsoft Dynamics GP or any other midmarket ERP/accounting software:

1) How to Save Money on User Licenses

Usually ERP software is priced by user license. The lower the user count the lower the cost of both the software and the maintenance plan.  Licenses can be priced by concurrent users (people who access the software at the same time) or named users (everyone you set up in the system).  A concurrent user model can save you money because you could get away with buying less of them if you organize when people are accessing the system. (Microsoft Dynamics GP is sold on a concurrent user model).  Also, ask if you have the option to buy a less expensive Light User license for certain people that only need limited access to the system, such as viewing reports.  (Microsoft Dynamics GP offers Light Users). 

2) How to Save Money by Choosing the Right Edition of Dynamics GP

Many software vendors sell both a Basic (less expensive) and Advanced (more expensive) editions.  In the case of Microsoft Dynamics this is called Business Essentials Edition vs Advanced Management Editions.  If you need functionality that is not included in the Basic version, you may be able to save money by still buying the Basic edition and then supplementing the needed functionality with compatible third party add on ISV products.  For example, at CAL Business Solutions we often recommend this as an option for manufacturing companies. Buying Microsoft Dynamics GP Business Essentials with Horizons Manufacturing ISV modules can be less expensive than buying Microsoft Dynamics GP Advanced Management to get the advanced manufacturing modules. A good partner will be able to help you review your options and will not automatically recommend Advanced Management as the only option.

3) How to Save Money on Annual Maintenance Fees

An annual software maintenance plan has many benefits such as free updates, patches, access to techknowledge database, online training and more. It is a valuable investment but still an additional cost. For Microsoft Dynamics GP this plan is called the Business Ready Advantage Plan and the cost is calculated as 18% of the software list price and is required for the first year. (After the first year you can choose between several optional maintenance plans ranging from 16-25% of the software list price.)  The way you can save money is by buying in phases. For example, assume you have 5 financial users and 2 additional users on the HR and payroll team.  To start your project you could buy 5 concurrent users. Then 3 months later when the financial set up is complete, you could purchase the 2 additional users plus the HR/Payroll functionality (which is often an a la carte/additional fee purchase). The maintenance fee for these will be prorated to match your existing Plan’s expiration date. This way you save the 18% maintenance fee on those additional users and modules for the first 3 months. One caveat to this, if you are getting a discount on the initial purchase (and not on subsequent purchases) it may make sense to buy everything at once.

You can get more tips on how to save money and avoid hidden costs when buying ERP/accounting software in our white paper, “30 Questions Every CFO Must Ask About the Cost of Accounting Software.”

 If you are trying to budget the cost of a Microsoft Dynamics GP project, try out our free Microsoft Dynamics GP Quick Quote tool which calculates the software and maintenance price and a ballpark estimate for implementation and training too.

By CAL Business Solutions, Connecticut Microsoft Dynamics GP Partner

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