Show me the product, tell me how much it costs.
Many distribution companies realize that this is sometimes easier said than done. But you also know that customers need to know how to calculate the price early in the process to make sure your product is a viable option for them.
The price of Microsoft Dynamics GP financial accounting software systems for distributors can vary widely. You may need simple inventory tracking all the way up to a full warehouse management system (WMS). In order to start the conversation, and make sure we are all in the same ballpark, here are some guidelines.
Dynamics GP pricing always starts with 4 main categories:
- License Cost
- Annual Maintenance Fees
- Implementation/Set up Services
- Hardware (or hosting fees)
Here are further details specifically for distribution companies.
- License Cost: The license cost of Microsoft Dynamics GP is a set list price that is calculated per concurrent user (with a 3 user minimum). This price includes access to all the modules within the system including Distribution functions such as Inventory, Purchase Order Processing, Sales Order Processing and more.
While distribution companies can be successful using only the core modules that are included in Dynamics GP, we always recommend adding a tool called SalesPad. This adds functionality for sales and customer service that our distribution clients absolutely love. SalesPad user licenses cost less than Dynamics GP user licenses.
We can help you determine the number of Dynamics GP versus SalesPad users that your company needs. Typically you can buy fewer Dynamics GP licenses for your core accounting team only. The rest of your users, who enter orders and deal with customers, can use SalesPad licenses which still access the Dynamics GP financial data.
- Maintenance Fees: Microsoft requires that new customers enroll in the Business Ready Enhancement Plan, which is 18% of the full system list price. The following year it can go down to 16%. This gives you access to version updates, knowledgebase and much more.
If you choose to add SalesPad licenses they also have an annual maintenance plan. These fees are billed to you by your Dynamics GP partner, so you don’t need to worry about paying separate bills each year for the maintenance fee.
- Implementation/Set Up Services
While the first two costs are fixed and easy to calculate, implementation services charged by a Microsoft Dynamics GP partner are very difficult to estimate until you have gone further in the evaluation process and the Partner knows more about your project.In order to give you a price the Partner needs to determine:
- The level of functionality you need (for example, do you need barcode scanners, EDI, ecommerce, etc….).
- How data will be moved from your old system.
- Any integration that needs to be done to connect separate systems.
- How much work your team is prepared to do on their own.
A partner that is experienced working with Distribution companies, like CAL Business Solutions, will be able to give you an accurate quote for implementation services after speaking with you about your needs.
If a company gives you a price without asking enough questions, beware. Only companies who truly understand your industry will be able to ask you the right questions and really determine an accurate price for this category of implementation services. Taking the time to make a proper evaluation in advance will save you money later
Your software needs somewhere to run, either on servers at your office or hosted on servers in the cloud. Purchasing hardware is a larger upfront cost. And you have to do your own server maintenance. Paying a predictable monthly fee to have your Dynamics GP system hosted online at a secure data center is less hassle, but may cost more money over time. An honest Microsoft Dynamics GP partner will help you weigh the pros and cons of a hosted system.
Note: Most Dynamics GP partners do not sell hardware. As this is part of your larger IT strategy you should speak with your current IT services provider, or ask for a referral.
Dynamics GP pricing is not overly complex if you work with someone who knows the right questions to ask.
We work with distribution companies every day. After a short discovery call we can give you an accurate estimate of the license, maintenance, implementation service and hosting fees. After a lengthier discussion with your team, often including a personalized demo, we can give you a firm price for the entire project.
A full distribution software system may be more affordable than you think. Contact CAL Business Solutions today to learn more about Microsoft Dynamics GP pricing for distribution companies.
Pricing is just one of the questions you should ask before you choose the right software system.
Download the white paper, “10 Questions Every Distribution Company Needs to Ask before Buying Accounting Software.”
If you are a small or mid-sized distribution company looking for similar benefits, contact CAL Business Solutions. 860-485-0910 x4 or [email protected]. We can help you evaluate your current systems, business processes, and goals to determine if Microsoft Dynamics GP is the right fit for you.
By CAL Business Solutions, Microsoft Dynamics GP Partner serving the Distribution industry, www.calszone.com/distribution