An ERP system is business software that connects processes such as purchasing, stock, sales and accounts. Teams use shared data, allowing an order to move through delivery and invoicing without being typed in again at each stage. Our guide to custom software puts ERP in the context of your wider software choices; AFAS versus custom software looks more closely at what to do when a standard package doesn’t quite fit.
What does ERP mean and what does it do?
ERP stands for Enterprise Resource Planning. The name suggests a scheduling tool, but its scope is wider. It connects the work you sell, the resources needed to deliver it and the records that follow. SAP describes ERP as software connecting an organisation’s core business processes.
Suppose sales confirms an order. Stock management needs to know which items are required, purchasing needs to see shortages and accounts needs to know what can be invoiced. An ERP setup defines those relationships. The actual steps depend on the business: a project-based firm works differently from a wholesaler.
Shared data doesn’t mean everyone should see everything. A warehouse employee needs different information from someone running payroll. Microsoft’s Business Central guidance explains access controls involving licences, security groups and permissions. Make this part of your configuration, even when the supplier describes the package as one central environment.
How does ERP work with an actual order?
Take this hypothetical example: a wholesaler receives an order but can’t supply every item immediately. The customer asks for the available goods to be sent ahead. A partial delivery like this tells you more about ERP than a dashboard full of green ticks.
Sales needs to record the agreement. The warehouse needs to see what can ship now and what remains outstanding. Purchasing investigates the missing stock. Accounts invoices according to the agreed terms, without accidentally treating the undelivered goods as complete.
The awkward part isn’t the entry form. It’s what a status means. Is a partially delivered order complete for sales but still open for the warehouse? What happens if the customer cancels the remainder? Can someone later find out why the invoice differs from the original amount?
Ask a supplier to work through your example. Include a correction, rather than showing only the expected sequence. Find out who performs each action, which records change and where the next employee sees the result. This shows whether the package supports your process or still needs a separate list to make it work.
A screen displaying all the information doesn’t prove that the underlying transactions are handled correctly. A reservation, a physical stock movement and an invoice mean different things. Agree those meanings before expecting departments to work from the same figures.
Which modules might an ERP package contain?
ERP software often has components for different business functions. The module list varies by supplier and product edition. Don’t buy a list of names: ask each supplier to show which tasks a module handles for your team.
| Area | Examples of work | What to ask for in a demo |
|---|---|---|
| Sales | Recording quotes and orders | An amended order with previously agreed prices |
| Purchasing | Managing supplier orders | A delayed delivery and its effect on customer orders |
| Inventory | Tracking items and stock movements | Reserved stock compared with goods physically available |
| Finance | Processing invoices, payments and entries | A correction that remains linked to the original transaction |
| Projects | Connecting work, resources and hours to a project | Additional work that needs approval first |
These areas appear, for example, in the Business Central documentation. The situations in the final column are our suggested selection questions. They aren’t a promise that every product edition handles them in the same way.
Sometimes a specialist application is a better home for a task. It might be a planning tool or a configurator through which customers specify a complex product. That’s a valid choice. Agree which system holds the authoritative customer details, prices and orders, and how the other software receives changes.
How is ERP different from CRM and accounting software?
CRM focuses on customer relationships: contacts, sales opportunities and follow-up. Accounting software focuses on financial records. ERP connects several business functions, potentially including CRM and accounting. Microsoft explains the ERP and CRM distinction.
In practice, the boundaries overlap. An accounting package may offer inventory functions, and an ERP product may have its own CRM module. The product label therefore tells you less than the work it can actually handle.
Look at where your problem starts. If sales loses track of prospects while delivery and accounts work well, better use of CRM may be enough. If mistakes happen between orders, warehouse activity and invoices, you need to examine that whole sequence. A new CRM screen won’t fix an incorrect stock reservation.
Which ERP systems could you investigate?
Microsoft Dynamics 365 Business Central, SAP’s ERP products and AFAS are examples you may encounter during selection. This isn’t a ranking. A useful comparison puts concrete proposals for your situation side by side, including configuration and any required extensions.
Business Central documents functions for finance, sales, purchasing, inventory and projects. AFAS lists CRM, financial administration, HRM, payroll, order management, projects and time recording within its ERP offering. That establishes the areas the suppliers cover. It doesn’t tell you which package handles your exceptions most comfortably.
SAP isn’t the name of a general software category, either. SAP is the supplier; ERP is the type of system. Ask which product a proposal refers to. Apply the same question to Dynamics 365: have the specific application and licence written into the offer.
Examples and the functions mentioned were checked in September 2026. Check product documentation and your quotation for changes and exact coverage.
Ask suppliers to give the same demonstration. Use the same order, amendment and access question. Otherwise, you’re comparing one provider’s best presentation with another provider’s hardest exception. Record separately what works as standard, what needs configuration and what still needs to be developed.
When do you need ERP, and when can it wait?
ERP is worth investigating when work depends on information that gets lost between departments. Sales might promise delivery using a different stock list from the warehouse. Or invoices might sit unfinished because nobody can tell whether a project stage has been completed.
There’s no headcount threshold that makes sense for every business. Look at the handovers, the consequences of mistakes and the effort required to reconcile information. A small organisation with complicated goods movements can have different needs from a larger consultancy.
But don’t replace a system just because someone uses a spreadsheet. A temporary analysis or a personal task list can reasonably sit outside ERP. The situation changes when that spreadsheet is the only record of delivery agreements, while everyone else relies on different information.
Find out why staff work outside the current software. Is a function missing? Does a routine action take too many steps? Was the system configured for a process the business no longer follows? Your answer determines whether a new package will help. Reconfiguration can sometimes be less disruptive and easier to justify than replacement.
What changes with cloud ERP or your own server?
Cloud ERP is supplied as a managed service. With an installation on your own infrastructure, you or a support provider organise more of the technical environment. The offer and service agreement should say exactly who is responsible for what. SAP describes these ERP deployment approaches.
For a cloud proposal, ask how updates are handled, how you can export data and what happens if a connection fails after a change. With your own infrastructure, establish who updates the platform and restores it after an outage. “We have a backup” doesn’t tell you who will carry out the recovery.
Keep the discussion specific, rather than asking which approach is safer in general. Who can use an administrator account? Where do you report an incident? How is a recovery checked? The same package can be managed differently in practice, depending on the agreement and the parties involved.
What does ERP cost beyond the licence?
A licence price doesn’t tell you what a usable setup will cost. Your comparison should also cover process configuration, data cleanup and migration, integrations, training and the time your own employees need to contribute. Ask for those items to be visible separately in the quotation.
Include the period after launch. Who accommodates a new order type? Who updates an integration when another system changes? How much help does the support agreement cover when employees can’t correct a mistake themselves?
Have assumptions written down. One offer may look inexpensive because it assumes clean product records and standard processes, while another already allows for your exceptions. Those are different assignments. Make the scope comparable before deciding on the total.
We haven’t attached a generic ERP budget here: without the users, modules, data quality and implementation scope, it would say little. For any additional development, our guide to custom software costs explains which decisions shape the work involved.
When should you use standard ERP or a custom extension?
Start with what an existing package handles well. Rebuilding accounting or ordinary purchase orders has little appeal if available software already supports your requirements. The decision changes when a particular part of the business repeatedly falls outside that setup.
| Approach | When should you investigate it? | What needs checking first? |
|---|---|---|
| Configure a standard package | Available functions fit your processes | Required settings and changes to working practices |
| Connect existing systems | Functions exist, but people re-enter data | Which information takes precedence and how errors are handled |
| Add a custom extension | A defined process is missing, but the ERP otherwise works | Whether interfaces, licences and support allow the addition |
| Replace the ERP | Gaps affect the foundations of many activities | How to move without losing orders or accounting records |
An extension could provide a dedicated intake or planning screen. The ERP would remain the agreed home for master records and transactions, while the additional application handles work that doesn’t fit comfortably there. Our article on connecting software explains the arrangements that a connection needs.
Don’t create a competing source of truth. If staff can change prices in both systems without clear rules, you’ve moved the problem. Specify where a change starts, who approves it and how its successful processing is visible. Allow for partial failure too: the extra app may accept a request that the ERP later rejects.
If you commission custom software development for this, agree maintenance and handover alongside the functions. The code is and remains yours. That doesn’t remove dependencies on an ERP licence or the supplier’s interfaces; you need to assess those terms separately.
How do you actually get started?
Take a recent order or completed project and trace it from enquiry to payment. Record where someone enters data again, asks a colleague for confirmation or consults another list to find out what was agreed. Include the people who carry out those steps every day.
Then distinguish a missing function from a poor handover or an unclear working agreement. Match the response to the cause: add a missing function, improve an integration or agree how the work should be done. Involve someone from accounts in the demonstration as well, so a nicer entry screen doesn’t quietly create more correction work further down the process.
That gives you a useful starting point for selecting a package or adding a focused extension. Want to discuss the choice with us? Book a call and bring the process that’s getting stuck.
