What makes open-source ERP such a great option in your ERP software search? We’re glad you asked.
This article showcases the best open-source software, how it differs from free ERP software, its pros and cons, pricing considerations, and more. Let’s dive in!
Compare Top ERP Software Leaders
Table of Contents
Our team of writers and analysts at SelectHub is committed to giving you the best recommendations based on our data. To make our list, products had to meet two criteria:
- Closely match the topic
- Earn a top-5 analyst score in our selection platform
Our analyst scores are based on an in-depth research process using primary and secondary sources. This includes SelectHub Analyst Briefings, direct communication with vendors, and reviewing materials such as user reviews, product brochures, specification sheets, case studies, user manuals, and technical documentation.
Our platform’s Scoring Engine processes the research and computes the analyst score. The score also factors in platform settings such as industry and company size.
Best Open-Source ERP Software
Although not exhaustive, this comprehensive list of the best open-source ERP software covers top features, benefits and limitations.
Compare Top ERP Software Leaders
ERPNext
First released in 2008 by India-based company Frappe, ERPNext is a popular and comprehensive open-source ERP system. The framework consists of Python and Javascript for maximum customization options.
The community forum has more than 1,000 people on the discussion forum. Top features include stock management, CRM, sales, purchases, accounting and more.
An example of ERPNext’s financial capabilities.
Top Benefits
- Pinpoint and Resolve Bottlenecks: Develop delivery trips to document deliveries in a single vehicle to catch and rectify bottlenecks. Add multiple stops and tag delivery submission notes to specific customers.
- Strengthen Consumer Demand Forecasting: Analyze the sales funnel and quantify prospect numbers for all sales and marketing phases to understand better and predict customer demand.
- Improve Employee Filing System: This accessory tracks employee attendance, salaries, loans and other information with detailed reports for better centralization and organization.
- Boost Accuracy: Track actual project fees and produce time logs based on exact task durations for strengthened precision.
- Enhance Quality Verifications: Assess a product’s completeness and adherence to standards based on particular formations while establishing protocols and regulations for better, high-quality products.
Primary Features
- Stock Management: Use hierarchical location trees, stock movements, serial numbers and batches.
- CRM: Track presale operations such as lead capturing, open opportunities, calls and emails.
- Purchases: Supervise material requisition, supplier quotes, purchase orders and other workflows.
- HR Management: Maintain leave and attendance tracking, expense claims, salary and payroll, recruitment, performance, and other employee data.
- Multi-Currency Accounting: Create accounting entries in several currencies. Establish bank accounts in foreign regions and transact in that area’s currency.
Limitations
- Lacks batch processing.
- Accounting module lacks offset tools.
- Production planning tool isn’t user-friendly.
Platform:
Company Size Suitability: S M L
Odoo
This ERP open-source system provides paid subscriptions and services. Odoo caters to the agriculture, automotive, cleaning and hygiene, and construction industries.
Odoo is available in three versions: two are free to download and deployed on-premise, and the third is cloud-based for users who want to pay for using the system with support.
A preview of Odoo’s expenses tool.
Top Benefits
- Improve Cross-Department Communication: Link devices to the Odoo database via Wi-Fi, Bluetooth, USB or HDMI to merge current business workflows, departments and practices through IoT.
- Boost Company Visibility: Work with drag-and-drop tools to build websites for eCommerce, customer portals, events, blogs, call-to-actions, newsletters and more for improved visibility and readership.
- Strengthen File Management: Send, sign and confirm files, prepare contracts with drag-and-drop blocks, submit signature requests, and track sent document statuses for better document management.
- Increase Efficiency: Automate numerous tasks such as moving leads through sales funnels, allocating prospects to the sales team, updating records, and implementing if/then actions to conduct specific functions after an email is opened, clicked on or received a reply.
- Enhance Client Shipments: Merge operations with the Amazon Connector when clients install their Amazon credentials. Automatically complete sales orders with Amazon’s information and manage fulfillment by merchant (FBM) and fulfillment by Amazon (FBA) options for improved deliveries.
Primary Features
- CRM: Track leads, close possibilities and obtain estimates. Gain insights, produce tailored dashboards, and offer real-time reports and flowcharts. Establish activity schedules based on sales scripts from meetings, calls, quotes and mail.
- Documents Management: Share, deliver, arrange and archive scanned documents. Produce vendor bills, assignments and manufacturing product sheets. The email gateway component creates statements automatically from scanned documents or a vendor’s email and assigns documents to colleagues, customers or vendors.
- Field Service Management: Schedule appointments, distribute responsibilities to workers, plan routes, track working time, sell goods, produce custom worksheets, handle invoice services and offer quotations.
- Manufacturing Management: Gain MRP, quality, maintenance and PLM tools in one centralized solution. Display worksheets and quality notifications for employees during production. Use API to chronicle real-time.
- Point-of-Sale (POS): Access this tool on mobile devices and industrial machines via the internet. Automatically input any POS transactions into inventory. Review real-time availability of products and integrate this module with Odoo eCommerce.
Limitations
- Doesn’t merge with social networks.
- Lacks wholesale operation tools.
- Website builder lacks sandbox configuration and production instances via Odoo Cloud.
Platform:
Company Size Suitability: S M L
Flectra
This opensource ERP system is available for on-premise and cloud deployments. It serves all company sizes and works on Mac and Windows operating systems. Pricing packages include Starter, Professional and Enterprise; they also offer a free trial for new users.
Top features include CRM, purchase management, sales, accounting and more.
An example of Flectra’s interface.
Top Benefits
- Obtain Swift Answers to Queries: Access centralized ticketing, knowledge management, issues resolution, change management, customer interaction and performance management to simplify client support. Resolve tickets on a priority basis to ensure you address emergency issues first.
- Improve Workforce Decision-Making: Gauge employee performance to make more informed choices.
- Strengthen Talent: Allocate suggested training sessions to employees in the feedback system to sharpen skills.
- Boost Visibility: Allow employees to access HR-related data with a self-service portal available on multiple devices for better visibility.
- Enhance Customer Retention: Merge email marketing, CRM and analytics in one location for consolidated conversion management to improve customer preservation. Sort prospects, leads, and customers while producing target emails with automatic messages for new signups, birthdays, anniversaries, top blog posts, event reminders, and more.
Primary Features
- CRM: Track leads, meetings and calls effortlessly.
- Project Management: Merge planning, management and project execution with custom operations. Break down assignments into more manageable duties and subtasks. Rank, allocate and craft operation blueprints for each job.
- Accounting: Simplify all money management procedures and receive a transparent snapshot of the company’s expenses, revenue, budgets, invoices and so on. Create invoices, automate follow-ups, reconcile several payments, incorporate payment terms and draft invoices.
- Multi-Country Support: Use the centralized accounting system for companies with several global locations. Obtain multi-currency and multi-company support with diverse subsidiary and division integrations. Support multiple users with pre-set roles and hierarchies.
- Leave Management: Let workers access and examine the number of leaves in their accounts and apply for time off days. Managers obtain a consolidated view of the employee’s account and approve or deny requests.
Limitations
- Lacks live bank feed tools.
- Lacks barcode support.
- Lacks Voice Over Internet Protocol (VoIP) integrations, digital sign and eBay connector.
Platform:
Company Size Suitability: S M L
Dolibarr
This open-source ERP software combines ERP and CRM functionalities while offering external add-ons for download. Dolibarr is available for anyone to download for free. Several thousand developers, testers, translators and end users work on the project.
Top features include billing and payments, prospects/customers, employees and users, and more.
A preview of Dolibarr’s project management tools.
Top Benefits
- Increase Business Transparency: Integrate with traditional shops, bars and restaurants to form a database. Establish floors, rooms and tables with simple drag-and-drop functionalities on a touchscreen. Distribute orders or invoices to a specific table while updating inventory in real time.
- Consolidate Accounting Data: Define accounting and dispatch existing data for products, sales, purchases, expense reports, salaries and more into ledger tables. Use a pre-set or customizable chart of accounts and determine accounting numbers. Create proper setup pages when users create a new profile, vendor, product, bank account, vat rate or expense report template.
- Align System With Business Objectives: Use Dolibarr APIs, triggers or hooks to merge with other ERP systems. The REST APIs extract or insert information and delete records for better customization preferences to meet your company’s needs.
- Boost Time Management Accuracy: Complete timesheets with week or day grids from a specific project or assigned task. If you establish an hourly rate on a user record, the time spent automatically converts into the user’s currency, adding to the project’s overview profit for more precise time management.
- Supervise Integrated Tools: The marketplace is available to all developers and organizations to consolidate hundreds of external add-ons in one place. Use the module builder assistant or make custom developments.
Primary Features
- Prospects/Customers: Create prospect or customer profiles by adding names, emails and other valuable details to the database. Generate alternative addresses and contacts for each candidate or current customer. Establish the status or potential of prospective clients.
- Employees and Users: Construct employee accounts and allow them to obtain data and interact with third-party features, business documents and more tools that align with their permissions. Determine job positions, genders, notes, external file attachments and statuses.
- CMS: Draft a company’s public website or a private intranet. Use current website templates to craft webpage content via the editor tool. Gain HTML or CSS-embedded editor capabilities to create websites.
- Products/Services: Build and maintain product or service catalogs and reuse them with other features, including proposals, quotations, orders, invoices and stocks. Use native data on products and service cards, such as sale prices, tax rates, durations, dimensions, cost prices, bookkeeping accounts, stock notes or personalized fields.
- Billing and Payments: Utilize this module to create several invoice types, such as down payments, freehand or customer sheet credit notes, module proposals, contracts and more. Allow automatic invoice creations with repetitive templates.
Limitations
- Finnish translation tools need improvement.
- Lacks open office templates.
- Lacks direct delivery note creations.
Platform:
Company Size Suitability: S M L
ADempiere
This open-source ERP system is a 100% free, cloud-based program that runs on PCs, tablets or smartphones. This system combines ERP, CRM and supply chain management (SCM) support in one platform.
ADempiere caters to the manufacturing, distribution, retail, government, agribusiness and education sectors. Top features include trade management, workflows, BOMs and formulas, resource management, and more.
An example of ADempiere’s interface. Source
Top Benefits
- Strengthen Overall Security: Manage safety controls based on user roles, access control windows, reports and procedures. The user must provide a username, password and optional language role before accessing data.
- Detect and Address Issues: Repeat or recreate all transactions. The system pinpoints most failures, and users can solve problems. The error is isolated, and the rest of the system will work if unresolvable.
- Ensure Better Performance: Use this system’s Smalltalk MVC Architecture, consisting of a model-view-controller approach and the explicit rules engine to handle intricate transaction logics and enact safe-fail recoveries. Each object is as independent as possible from other things, such as transactional deviation.
- Boost Financial Monitoring: Supervise banks and bank accounts in different currencies and handle all payment types, checkbook controls, document printings, batch check processing and bank reconciliations. Manage multiple payment and deposit types like cash, transfers, third-party checks and more.
Primary Features
- Manufacturing Management: Obtain real-time transparency of expected demand and production plans. Develop timely requisitions and manufacturing orders, review open orders and adapt to supply and demand changes. The solution also pinpoints variations between standard and actual expenses.
- Resource Management: Predict capacities and choose different resources, including workstations, production lines, workshops or plants usually integrated between them. Compare capacity calculations against existing resources to evaluate your production plan’s sustainability.
- Bill of Materials (BOMs) and Formulas: Work with several BOM templates and reports that provide a clear snapshot of parts and raw materials.
- Cost Management: Supervise fees for organizations, accounting schemes, warehouses, resources, product groups and more.
- Human Capital: Gain availability details from employees and establish training visions. Craft career development plans and goals for workers. Automate recurring calculations, overtime processing, loan management, tax processing, income taxes and employee contributions.
Limitations
- Lacks free trials.
The control and freedom of choice are what sets open-source ERP apart from proprietary software. Additionally, a proprietary software vendor rarely releases the source code, so users need to coordinate with and pay their vendor to generate custom features.
Platform:
Company Size Suitability: S M L
Difference Between Open-Source and Free ERP
Now that you’ve seen the best open-source ERP, let’s talk about the difference between open-source and free ERP.
Open-source ERP is a system that allows you to tailor its coding with features and attributes to meet your company’s needs.
Free ERP is a solution that doesn’t have any licensing or upfront fees attached. The source code isn’t readily available, either.
Virginia Miller, marketing coordinator for Simpl Fulfillment, described the advantages of open-source ERP.
Distinct from free ERP, open-source ERP is essentially a treasure trove of coding that businesses manipulate to suit their operations, while free ERP is basically what you see is what you get. In terms of customization authority, open-source ERP really shines. By allowing businesses to experiment with and modify the source code, they can bring about bespoke solutions that align perfectly with their processes.”
Vladimir Terekhov, CEO of Attract Group, said free ERP is a limited adaptation of the paid system.
Free software may not cost anything to use, but it often comes with limitations or may be a stripped-down version of a paid product. Open-source software, while sometimes free, is more about the accessibility of the source code.”
Mark McShane, managing director of AED, said free ERP solutions aren’t always free.
While free ERPs may waive initial fees, they often mask hidden costs for support, maintenance and extra features. Conversely, open-source ERPs signify more than mere exemption from license charges. Understanding the freedom to inspect, modify and enhance software is essential for businesses as they make their decisions.”
Pros and Cons
Open-source ERP – a publicly available, mostly- cheap and customizable software – sounds like a dream. While it certainly does have many advantages, it comes with downsides, too.
Miller discussed opensource ERP’s cost-effectiveness and risk.
Open-source ERP’s cost-effectiveness springs from its versatility. A business can often avoid expensive add-ons or modifications by simply tweaking the open-source code as per their requirements. However, this does introduce potential risks. Instances of faulty code or security gaps, for example. Therefore, security and regular maintenance should be high on your agenda.”
Terekhov explained that an open-source ERP’s public-access code garners risks and benefits.
Without a centralized authority overseeing the code, vulnerabilities may go unnoticed. However, with a vigilant community and proper security practices, these risks can be mitigated.”
Let’s dive deeper into the pros and cons of open-source ERP software.
Pros
Free Source Code
Open-source ERP can cost some, but the open-source code is typically cost-effective.
For those who don’t want to manage their system, you can find a vendor that offers a software-as-a-service (SaaS) solution. Typically, these systems have monthly billing and pricing, but it depends on what services you select and how many users you have.
McShane described how competitive an ERP open-source system market can get.
Companies can bypass steep license fees and redirect finances toward customization and process optimization. Moreover, the model fosters a competitive market for support and services.”
Highly Scalable
When gathering your ERP software requirements, it’s essential to consider what your business will look like in the future. Adding features or users down the road requires expensive re-implementations.
However, with the scalability of an open-source system, a growing business has the flexibility to make changes to its ERP system as needed.
Authority Over Customization
Direct access to source code allows users to be the sole authority over their system customizations. With this control, users can reach a whole new level of personalization.
Access to Community Support
Vibrant user communities support many open-source platforms – the support is experimental and transparent. For IT professionals who love immersing themselves in this environment, open-source can be a good solution.
These communities are known to quickly tackle system bugs, share their pre-built customizations or modules and more.
Independence From Vendors
From infinite flexibility to endless opportunities for innovation, independence from vendors can open many doors for software users. Think about it: open-source software users can always conduct business on their terms and schedules.
Compare Top ERP Software Leaders
Cons
Requires Knowledgeable IT Team
With an open-source ERP implementation, you become the software professional on the project.
This responsibility is a significant roadblock, and it can automatically deter companies without access to a tech-savvy team of people from giving these systems a shot.
Overly Complex
All ERP implementation projects are complicated, but open-source implementations take the cake for complexity. Free-reign on customizations can get out of hand and become counterproductive if you don’t have a set plan in place.
Potential for Increased Risk
Highly established and financially stable open-source software vendors aren’t widely available on the market today. Some may consider it a business risk to work with companies that are still in their infancy.
Lack of Proprietary Engineering
One of the things that companies pay for with proprietary products is specific software engineering that serves their goals.
For example, all of the research and development that a proprietary vendor has done on their products can support less downtime, reduce different kinds of failure rates and increase ease of use, which supports the you-get-what-you-pay-for notion.
Independence From Vendors
Let’s revisit this one – while independence from vendors can serve as a perk, it comes with great responsibility. Open-source ERP users can only rely on themselves and their user community for support.
Less-Qualified/Knowledgeable Support
Proprietary ERP vendors and companies typically have a well-versed support team to rectify issues if any arise. Open-source software relies more on community forums and your IT staff to fix problems or bugs.
These forums can be a disadvantage because if you receive complex bugs, malware, spyware or viruses that are hard for your IT personnel to fix, how will you resolve the issue?
If someone in the support forum hasn’t faced this problem or doesn’t know how to rectify it, how will you reach a resolution?
Miller described that some open-source ERP support teams don’t fully know their terrain like those on a regular ERP system.
One can argue [this instance as] a case of depth versus breadth. [Open source ERP support] is less about having a structured support team and more about having access to a vast, diverse community of users and developers.”
McShane said open-source ERP system’s diverse community support can offer a wealth of knowledge, but often leads to “erratic customer service experiences.”
Compare Top ERP Software Leaders
Pricing Considerations
While debating between regular and open-source ERP software, consider these pricing factors before you begin your search.
What’s the ideal deployment option?
Are you interested in cloud, on-premise or a combination of both? Picking the deployment choice that best accentuates your company is critical to choosing the ideal solution.
Cloud programs enable you to host the software and data on a third-party vendor while giving you real-time access on mobile devices. Review bank statements during lunch breaks or check invoice statuses before your next stakeholder meeting.
Conversely, on-premise strictly holds your software and data on your company servers, typically in one location, depending on your license. This option is usually ideal for small businesses.
Hybrid merges cloud and on-premise qualities into one option.
What are the company’s most requested requirements?
Develop a thorough list of requirements for your software.
Gather all of your department leaders for accounting, HR, marketing automation (MA) and more in one setting and poll them on what they need. Then rate how your ideal vendors’ solutions perform these requirements based on their data and demos.
How big is the company?
Are you a small business looking to expand into a Fortune 500 within the next five to 10 years? Are you an enterprise with national and global partners, stakeholders and clients? Are you looking to downsize in the next few years?
These and other questions are something to think over regarding company size. Some solutions can scale with your company as you add more employees, sectors, facilities and more. When choosing software, size does matter.
A new system or add-ons?
If your current system doesn’t work because it’s outdated and slow, it’s best to invest in a new program. It’s common sense. However, if you like your current system, you can purchase integrations and add-ons, saving you money.
For example, you have an ideal accounting platform, but you need to manage manufacturing, enterprise reporting and professional services automation (PSA). You can purchase separate solutions or get add-ons that integrate with your current platform.
Compare Top ERP Software Leaders
FAQs
Open source software is a solution that offers you access to its source code to customize and add features for your company’s needs.
There are several ways to choose the right ERP open-source system. We offer a nine-step methodology called Lean Selection that helps you find the best software for your specific company size and industry.
Yes. A free ERP is a system that is free of licensing fees but may have hidden costs or limited functionality of a paid version.
SAP does offer an open-source product called SAP Cloud Application Programming Model (CAPM).
Unlike Odoo, Dolibarr, ERPNext or the other products mentioned above, NetSuite ERP is not an open-source ERP system.
There are several reasons to use open-source ERP. Some reasons include:
- Free source codes for maximum customizations
- Scalability
- Community support access
Some pros and cons of open-source ERP software include:
Pros
- Accessible source codes
- Software vendor independence
- Higher customization authority
Cons
- Overly complex
- Increased risks
- Less knowledgeable or qualified support teams
Terekhov explained that open-source ERP isn’t ideal for all organizations.
[Open-source ERP] requires a certain level of technical expertise to implement and maintain effectively. Companies should assess their in-house capabilities or consider partnering with a knowledgeable IT provider when opting for an open-source solution.”
Miller suggested it’s best to weigh the advantages and disadvantages of an open-source ERP system before pushing for acquisition.
While daunting for some, open-source ERP can offer a powerful, flexible tool to those willing to master its intricacies or invest in suitable resources. As with any technology, understanding the pros and cons of open-source ERP software is crucial to fully leverage its potential.”
Compare Top ERP Software Leaders
Next Steps
There you have it. Open-source ERP has pros (and cons) that can help you maximize productivity, boost profits and enhance customer satisfaction. Finding a system that best aligns with your company’s goals is vital.
Ready to take the next step? Review our free, in-depth comparison guide for an unbiased, apples-to-apples stack-up of numerous ERP systems.
How has open-source ERP benefited your company? Share with us in the comments!
SME Contributors
Mark McShane, managing director of AED Training, owns multiple businesses and multi-million-pound operations across heating, training, first aid, solar and digital PR niches. McShane was featured in PHAM News, Electrical Times, Heating & Ventilating Review and other publications. He also earned the Gold Feefo Customer Service Award in 2021 and 2020.
Virginia Miller is the newly appointed marketing coordinator at Simpl Fulfillment, an innovative third-party logistics provider for eCommerce brands. In her role, she combines her extensive industry experience with a flair for creative marketing strategies, enhancing the company’s engagement and presence in the dynamic eCommerce sector. In her spare time, Miller is a passionate pastry chef and an avid pickleball enthusiast. She enjoys relaxing in Austin with her two dogs.
Vladimir Terekhov is the CEO of Attract Group, a company specializing in custom software development, including ERP and PLM systems. Terekhov is an experienced IT entrepreneur specializing in digital transformation and managing software development teams. He earned master’s degrees in computer systems and networks and innovations management from Donetsk National University.
Analyst-Picked Related Content
Pricing Guide: Discover the true cost of ERP software
Comparison Report: An interactive analyst report with comparison ratings, reviews and pricing for ERP software