Choosing an ERP for a 5–10 Million Dollar Business: What Actually Matters

If your business turns over somewhere between $5m and $10m, the right ERP is the one that handles the work your current systems can't (usually stock, jobs, purchasing or more than one company) without forcing you to change everything at once. At this size, the product name matters less than three things: whether it fits how you actually run orders, jobs and stock; what it will really cost once implementation, data migration and connections to your other systems are added; and whether you need an ERP yet, or whether fixing a few processes and connections would solve the problem for less. This guide covers each in plain English.

An ERP (enterprise resource planning system) is one system that runs stock, purchasing, sales, jobs or production and the finance side together, so the same information isn't kept in several places.

Signs you've outgrown accounting software and spreadsheets

Most businesses in this range started on accounting software plus spreadsheets, and it worked well for years. The signs it has stopped working are usually about information, not features:

• The same information is typed in more than once. Orders go into one system, then the accounts, then a spreadsheet. This is double data entry (the same information typed into two systems), and it's where most errors start.
• Nobody trusts the stock figure. The stock system, the accounts and the warehouse spreadsheet all say different things.
• Job or product margin arrives too late. You only find out a job lost money, or a product line slipped, weeks after month-end.
• Month-end depends on one person's spreadsheet. If they're away, the numbers wait.
• You've added a second company or location and are combining results by hand.
• Purchasing runs on email and memory. Nobody can quickly see what's on order, what's been received and what hasn't been billed yet.
• Add-on apps are multiplying. Each one solves a problem, but now information is stuck in separate systems (data silos) and the connections between them keep breaking.

If two or three of these sound familiar, it's worth looking at an ERP. If only one does, a targeted fix may be the better first step (more on that below).

What an ERP must handle at this size

Don't start with a feature list from a vendor. Start with the parts of your business that cause the most retyping and the latest numbers, and make sure the ERP handles those properly.

• Stock. Multiple warehouses or locations, units of measure, batch or serial numbers if you need them, landed cost (purchase price plus freight, duty and other costs to get stock on your shelf), and stock value that agrees with the accounts.
• Jobs or projects. If you do project or contract work: budgets, costs as they happen, progress billing, and margin by job while it's still running.
• Purchasing. Purchase orders, approvals, goods receipts and matching supplier invoices to what was ordered and received.
• Sales and customer pricing. Customer-specific price lists, quotes to orders to invoices, and back orders.
• Manufacturing, if relevant. Bills of materials, work orders, and the real cost of what you made compared with what you expected.
• More than one company. If you run several entities: transactions between them, and combined reporting without a spreadsheet in the middle. Our multi-entity consolidation page covers this.
• Reporting. The reports your managers use every week, not just the standard financial reports.

Write down your five or six most important day-to-day processes in your own words, for example "a trade customer emails an order, we pick it from two warehouses and invoice on dispatch". Ask every vendor to show those processes working in a demo, using your examples.

Cloud ERP options for mid-sized Australian businesses

There are plenty of products that suit a business at this size. In general terms, the ones Australian businesses most often look at include:

• NetSuite. A cloud ERP that covers finance, stock and more, popular with businesses that expect to grow or add entities.
• Microsoft Dynamics 365 Business Central. A cloud ERP from Microsoft, sold and set up through partners, often chosen by businesses already using Microsoft products.
• Acumatica. A cloud ERP with editions for distribution, manufacturing and construction.
• MYOB Advanced. MYOB's cloud ERP for larger and growing businesses, built on the Acumatica platform.
• Pronto Xi. An Australian ERP with a long history in distribution, manufacturing and service businesses.
• Odoo. A modular system where you choose the apps you need; there are free and paid editions.
• ERPNext. An open-source system covering stock, manufacturing, projects, purchasing and CRM, which can run alongside the accounting software you already use.

Each of these can be a good fit or a poor fit depending on your processes, who implements it and how well it connects to the rest of your systems. We don't rank them, because the right answer depends on your business. Licence pricing changes often and depends on users and modules, so get current quotes directly. If you're comparing two open-source options, our ERPNext vs Odoo comparison goes into detail, and our guide to choosing an ERP system covers the wider selection process.

The real cost is more than the licence

Licence fees are the easiest number to compare and usually not the biggest one over the first few years. When you compare options, ask for a figure for each of these:

• Implementation. Setting the system up for your processes, configuring approvals, and training your team.
• Data migration. Moving customers, suppliers, products, open orders, stock on hand and balances across, and checking they reconcile. Old data is often messier than anyone expects.
• Integrations. Connecting the ERP to the systems it won't replace: your online store, freight, payroll, banking, a job or field system, or customer portals.
• Reports. Rebuilding the reports your managers relied on in the old spreadsheets.
• Support after go-live. Who fixes things in the first few months, and what that costs.
• Your own team's time. The people who know your processes will spend a lot of time on testing and decisions during the project.

Our guide to the parts of ERP implementation your vendor won't do explains where these gaps usually show up and what to ask about each.

Keep your accounting system or replace it?

Many ERPs include a full finance side, and some businesses move everything into the ERP. Others keep their existing accounting software for the general ledger, payroll and BAS, and use the ERP for operations: stock, orders, purchasing, jobs and production. Both approaches work. The questions to ask are:

• Is your accountant and finance team happy with the current accounting software, and would replacing it add risk without a clear benefit?
• Does the ERP you're looking at connect cleanly to your accounting software, and which system owns each piece of information (customers, suppliers, invoices, stock value)?
• Would running two systems mean more reconciling, or less, than you do today?

ERPNext alongside your accounting software is one option for businesses that want to keep their accounts where they are. ERPNext runs operations (stock, manufacturing, projects, purchasing and workflows) and sends the financial transactions to the accounting system, so your accountant keeps working the way they do now. It isn't the right fit for everyone, but it's worth knowing the option exists. Our ERP implementation page explains how we help, whichever system you choose.

A short ERP selection checklist

Before you sign anything:

1. List your key processes in your own words, and the reports you need each week.
2. Name the systems the ERP must connect to, and the ones it will replace.
3. Decide who owns each piece of information (for example, customers in the ERP, payroll in the accounting system).
4. Shortlist two or three products that fit those processes, not the longest feature list.
5. Ask for a scripted demo using your own examples, not the vendor's standard demo.
6. Get a full cost covering licences, implementation, data migration, integrations, reports and support.
7. Ask who does the data migration and reconciliation, and how you'll check the numbers before go-live.
8. Talk to a reference customer with a business like yours.
9. Check how you'd get your data out if you ever left.

There's a longer version in our ERP selection checklist.

When NOT to buy an ERP yet

An ERP is a big project for a business of this size. Sometimes the real problem is smaller and cheaper to fix:

• If the problem is one broken process, such as orders being retyped or purchase approvals happening by email, fixing that process and connecting the systems involved can solve it without replacing anything.
• If your systems each work well but don't talk to each other, connecting them may give you one set of numbers everyone trusts, without the cost and disruption of a new system.
• If nobody agrees how the process should work, an ERP will just make the disagreement more expensive. Agree the process first.
• If your data is a mess, clean it up first. Moving messy data into a new system gives you a new system with messy data.

What it looks like when it's fixed, either way: on Monday morning you can see last week's sales, margin and stock position from one place, and nobody has had to build a spreadsheet to get there.

If you're not sure which camp you're in, our paid $5,000 Process & Systems Audit maps your processes and systems and gives you a written report on what to fix first, whether that's an ERP or not.

Frequently asked questions

What is the best ERP software for a 5–10 million dollar company?

There isn't one best product for every business at this size. The right ERP is the one that handles your key processes (stock, jobs, purchasing, manufacturing or several companies), connects to the systems you're keeping, and has a total cost you can live with once implementation and data migration are included. Shortlist two or three and test them with your own examples.

How do I know if my business needs an ERP?

Look for repeated retyping between systems, stock or job figures nobody trusts, month-end that depends on spreadsheets, and margin you only see weeks later. If several of these apply, an ERP is worth considering. If only one does, a targeted fix may be enough.

Can we keep our accounting software and add an ERP?

Yes. Many businesses keep their accounting software for the ledger, payroll and BAS, and use an ERP for stock, orders, purchasing and jobs, with the two connected. ERPNext alongside your accounting software is one way to do this.

What does an ERP cost for a business this size?

Costs vary widely depending on the size of the business, how many systems are involved and how much needs to be custom-built. Licences are only part of it: implementation, data migration, integrations, reports and support often add more. Get a full figure from each vendor before comparing.

How long does an ERP implementation take?

It depends on how many processes, locations and entities are involved, how clean your data is, and how much time your team can give the project. Ask each vendor for a realistic plan that includes data migration, testing and training, not just the software set-up.

Should we use an independent adviser to choose an ERP?

It can help, especially if you're comparing several products. An adviser who doesn't sell software can help you define your processes, run fair demos and check the full cost. Our software selection service covers this.

If you're weighing up an ERP and want a second opinion on whether it's the right step, book a free initial chat and we'll talk through how your business runs today and what would make the biggest difference.