Enterprise Resource Planning (ERP) systems have been the cornerstone of operations for many UK small and mid-sized companies for years. Systems such as Sage 200, Microsoft Dynamics NAV, and even Pegasus have handled everything from order management to stock-level tracking. However, as businesses expand, the shortcomings of these antiquated systems become clearer, especially in finance. 

Many businesses are preserving their current ERP and integrating it with modern accounting software that leverages artificial intelligence instead of discarding a system that is still running. Without overhauling the whole software stack, this mix enables financial teams to work smarter, faster, and more accurately.

The Problem with Older ERP Systems in 2025  

Legacy ERP systems were built in a different period. Reliability and control were prioritised back then, and that’s exactly what they did. These systems battled to keep up as businesses sought faster reporting, more flexibility, and better user interfaces over time. 

Running month-end reports often requires assistance from IT or exporting data into spreadsheets. Approval systems depend on either manual sign-off sheets or email threads. Handling VAT, multi-currency transactions, and intercompany transfers has also become a regular pain as more businesses grow internationally or use mixed business models. 

These issues do not mean the ERP should be changed; it is still effectively performing its main tasks. However, they imply that the finance function needs some enhancement outside the ERP context. 

What Modern Accounting Tools Offer  

Cloud-based accounting programs have evolved over the past few years. They offer far more than just basic automation. Dext, ApprovalMax, Telleroo, and AutoEntry are a few popular names. Many are powered by machine learning; hence, the more you use them, the better. For instance, whereas forecasting systems may model future cash flow using previous activity and live bank inputs, invoice scanning programs now learn how to identify costs based on past activity. 

These platforms offer a better user interface with more nuance. Built to interact with other programs, they are quick to set up and easy to use. This makes them perfect partners for older ERP systems that were not created with contemporary APIs or cloud operations in mind. 

More importantly, they enable the finance staff to devote more time to value-adding activities, such as forecasting, performance analysis, or supporting capital rounds, rather than redundant tasks. 

Why Integration Matters More Than Ever 

The true breakthrough occurs when these platforms link straight to your ERP. It’s about developing a workflow whereby every system performs what it is best for, not only for data sharing. See the ERP as your primary ledger, where the truth resides. Working around it, the AI helps feed in data and insights that the ERP cannot create on its own. 

Consider invoice approvals as an example. Integrating Dext and ApprovalMax will automate the entire workflow if your staff is still sending PDFs for sign-off. Pre-defined rules guide the capture, classification, and routing of invoices to the correct individual. Once approved, payment instructions can be sent to a platform like Telleroo, which executes the payment and updates the ledger. 

Although the ERP records the outcome, the entire process from invoice to payment happens faster, more efficiently. This keeps everyone in the loop, helps avoid mistakes, and reduces delays. 

Useful Case Studies from UK Small Businesses 

One middle-sized company in Leeds still running Sage 200 for basic accounting recently layered in Dext for invoice management and ApprovalMax for workflow approvals. Within three months, the financial team cut their month-end close by two days. Another company, a wholesale distributor with multiple regional offices—used Pulse to link ERP with sales order data and bank feeds. The result: A real-time cashflow dashboard that replaced a clunky Excel sheet updated once a week. 

These examples demonstrate how, with the correct tools, your ERP—which is no longer cutting edge—can nevertheless be used to enable high-level competitiveness. 

Creating the Appropriate Integration Strategy 

Success in this field isn’t just about technology; it’s about adopting a thoughtful approach. Businesses that work well with this type of approach begin by determining whether financial operations are slow, prone to errors, or overly manual. They next look at which instruments would be most suited to enhance those particular areas. 

Nothing has to be completely overhauled all at once. Gradual changes make much more sense. Beginning with something simple, like cash flow forecasting or invoice capture, builds confidence and produces fast results. Expanding to other areas gets easier as the team understands the advantages at hand. 

Selecting software that supports UK compliance, including VAT complexity and MTD rules, is also vital. Open APIs, which ensure the new solutions can interact with your ERP without difficulties, are another must-have. 

Finally, IT and financial leaders must cooperate to ensure the configuration is trackable, well-documented, and secure. Automation will only be beneficial if it is also auditable. 

Potential Challenges and How to Handle Them 

Integrating AI-powered solutions with your ERP does carry some risk, much like any technological upgrade. Sometimes, data does not sync precisely. Other times, people return to old behaviours or underuse new technologies because they weren’t introduced with enough support. 

One common mistake is adding too many tools at once. Without a clear integration plan, this might lead to redundant data, contradicting reports, or doubt about the actual location of the “source files”. Businesses should keep integrations simple, use middleware when needed, and stick to technologies that offer transparent, bidirectional syncing.  

Change management is as vital. Although the tools are intuitive, they still depend on people utilising them correctly. This implies giving staff time to adapt, investing in training, and including the finance team in the decision-making process from the beginning. 

How Does This Approach Give You a Competitive Edge 

SMEs that adopt this layered, integrated approach achieve more than just automating processes; they help make their finance departments more strategic. Month-end reporting moves faster now. The view of cash flow gets better. Real-time data drives decision-making: old reports become obsolete.  

All of this goes on without upsetting your existing ERP or reengineering your company. You are improving how you use your system, not substituting it for another one. And in the current environment, where agility sometimes separates winners from survivors, such development is worth its weight in gold. 

SMEs can also consider leveraging SaaS companies like Pulse. Pulse offers cloud-based solutions that help businesses automate, streamline and optimise processes. For example, Pulse’s cash flow forecasting tool, aiPredict, can help small businesses leverage AI-powered cash flow forecasts and scenario models. Similarly, small businesses can leverage DebtorIQ to take full control of accounts receivable. The best part is that Pulse offers seamless integration with existing systems, ERPs and accounting packages. Pulse can serve as the ideal conduit for small businesses who are looking to leverage the power of AI, machine learning, and real-time data without spending a fortune or replacing existing systems. To learn more, book a demo today. 

Conclusion: A Smarter Way To Modernise 

For many UK-based SMEs, the problem right now is not whether their ERP system is outdated but rather if it hinders the finance function from operating as effectively as it ought to. The good news is that you can use new tools and keep your current ERP at the same time, instead of having to decide between them. 

Including AI-powered accounting software in your present setup will significantly increase accuracy, speed, and control without compromising current processes. This is a better way to modernise, helping businesses across the United Kingdom to remain competitive, future-ready, and compliant.