Just about every software vendor will require you to pay an annual fee based on a percentage of the software list price. This fee has various aliases such as maintenance fee or enhancement plan. (For Microsoft Dynamics GP, the cost of the “Advantage Plan” is 18% of the original software list price and is built into your first year costs.) The percentage can lower after the first year. The plan may not always be required, but it is always strongly recommended. In addition, your Partner may have their own annual maintenance plan for support calls, preventative maintenance checks or other services. Every maintenance plan is different – so it is important to find out what you are paying for to maximize the benefits.

Analysis

For example, many customers are never told that Microsoft offers unlimited free online training for all Advantage Plan customers, plus a set number of free support calls. This particular plan also gives you access to an online portal which includes a support “techknowledge” database.

The biggest benefit of paying for the maintenance plan is that you receive all the new software releases and updates. Companies stuck with old versions risk losing support from the vendor or having compatibility issues with newer technology. Plus, each release is packed with useful new features.

You might be tempted to let your maintenance contract lapse with plans to sign up again when the next version is released. Make sure you understand any penalty fees involved so you can determine whether this will really save you money. Remember, if you cancel your maintenance plan you may not be eligible for promotions offered. If you are using payroll modules make sure you can still access annual payroll and tax updates if you let your plan lapse.

The cost of the maintenance plan is usually set in stone by the software vendor. Even when the software price is heavily discounted, usually you still have to pay the same maintenance % on the original non-discounted price. But there are a few ways to save money if you plan ahead and ask the right questions:

3 Questions to Ask Before You Buy Accounting Software:

Ask: In addition to new releases, what else is included in my maintenance plan?

Ask: When was the last release and when is the next release scheduled?

Ask: What is the policy or penalty if I let my maintenance plan lapse and want to join again later?

2 Ways to Save Money on Accounting Software Maintenance Fees:

Save: Ask your most tech-savvy employee to search knowledge databases for answers to basic issues and save money on support costs.

Save: Buy only what you need for Phase 1 of your project. The lower your initial software list price, the less money you will pay for maintenance. If you buy something you don’t implement for another year, you just wasted money on the maintenance fee.

Conclusion

Maintenance fees are like insurance. We all wish we didn’t have to pay it, but when we need it, we’re sure glad it’s there. So, just add the maintenance fee into your annual budget and leave it there.

Disclosures and References

Anya Ciecierski is a marketing manager at CAL Business Solutions - a Connecticut Microsoft Dynamics GP Partner - and has been working with accounting software for more than 10 years.

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