Microsoft Dynamics Deep Dive: Understanding Business Central Licensing and Functionality

November 1, 2021

For businesses looking to deploy new cloud-based ERP technologies or to support their current technical infrastructure, Dynamics 365 Business Central is a powerful, cost-effective, and proven solution. However, given the impressive list of features, modular add-ons (called ‘extensions’), and deployment options, determining the fit and best approach for your business and team can be overwhelming. 

Dynamics 365 Business Central centralizes all the financial and process management you need to build, manage, and grow a business. It’s truly a flexible, intuitive solution that every modern business can leverage to thrive in a highly digital environment. As Microsoft’s flagship ERP system for SMBs, Business Central merges the forward-thinking technology of the widely popular Dynamics NAV with Microsoft Azure. The result is an architecture that covers the demands of all your operations—affordable, robust, fully connected, and infinitely scalable. 

In this blog, we’ll detail the different functions of Business Central to give you the knowledge you need to decide on what works best for your organization. Our team of experts has compiled a full breakdown of Business Central features, licensing, and pricing.  

Spotlight on Business Central 

Before jumping into Business Central’s specific features and functionality, we’re going to cover some of the main concepts and benefits behind the ERP platform. 

Business Central is Microsoft’s cherry-picked list of essentials from the Dynamics 365 apps that are packaged together to offer specific functionality for managing financial data, sales, service, and daily operations. 

Microsoft Dynamics 365 Business Central is a one-stop solution built specifically for the small-to-midsized business—aggregating intelligent applications that are designed to help you run your entire business. Enjoy finance, sales, inventory, warehouse, payroll, HR, customer, operations, and distribution management, all through a platform that is connected in the cloud for seamless integration, anywhere access, real-time reporting, analytics, and more. 

Since Business Central is in the cloud, you experience immediate cost, efficiency, and digital security advantages associated with highly mobile platforms. To begin using and taking advantage of Business Central, you will only need internet-connected devices. Enjoy a quick installation, ease-of-access, automatic updates, and enterprise-grade security without introducing new hardware costs or requiring more IT staff to manage it. 

In addition to lower monthly licensing costs through a simple pricing structure (versus larger, annual renewals and disruptive, costly upgrades for an on-premise ERP software), Business Central connects your users with an easy-to-use platform that is adaptable to your unique business processes.  

Standard Business Central Functionality 

When we say “all-in-one,” it warrants a closer look at the features and functionality that make up Business Central. 

The platform is an end-to-end business management solution that aids in common business processes for small and medium-sized organizations. While the default is primarily suited for wholesale and professional services, more complex functionality for processes like assembly, manufacturing, service, and warehouse management are available with an upgraded license or collection of extensions. 

Below is an overview of the core, ‘Essentials’ functionality available through Business Central alone: 

FINANCIAL MANAGEMENT
Manage payments and cash flow, defer income and revenue, prepare year-end closing documents, and manage fixed assets. Includes account receivables/payables, bank reconciliation, fixed asset management, multi-currency, and month-end/year-end closing. 

INVENTORY MANAGEMENT 
Register inventory or service-type items, categorize items for streamlined searches, manually or automatically adjust inventory levels, and perform inventory costing tasks. Includes forecasting, inventory control, shipment and distribution, returns, and cancellations. 

PURCHASING
Manage purchasing processes and information such as invoices, orders, returns, and vendor accounts. Direct purchase items from sales documents. Includes procurement, purchase line discounting, purchase order management, and robust vendor management. 

PROJECT MANAGEMENT
Create jobs and schedule resources for individual projects. Manage job budgets, monitor progress, and track machine and employee time. Includes capacity planning, budgets and estimates, ongoing job and process costing, and resource management tools. 

CUSTOMER RELATIONSHIP MANAGEMENT
Manage important contacts, relationships, interactions, segments, sales opportunities, marketing campaigns, and sales processes. Complete quote generation, sales invoicing, payment processing, orders, returns, and customer accounts, all in-platform. This CRM Integrates with Microsoft’s Dynamics 365 Sales for seamless integration in the lead-to-cash pipeline. 

SUPPLY CHAIN MANAGEMENT
Assemble items (assembly Bill of Materials) that integrate with existing features, such as sales, planning, reservations, and warehousing. Supports organizations that provide assembled products to their customers by combining components in simple processes without the need for complex manufacturing functionality. 

HUMAN RESOURCE MANAGEMENT
Keep detailed records of your employees, absences, and work records for actionable feedback. 

WAREHOUSE MANAGEMENT
Ensures an effective flow of goods during receiving and shipping. 

Below is an overview of the ‘Premium’ functionality available through Business Central alone: 

SERVICE ORDER MANAGEMENT
Schedule service calls, set up repeatable service orders, track repair parts, and manage supplies. 

MANUFACTURING
Define unique shop floor resources and their capacity. From there, schedule operations, pull production components, and execute production operations. 

Additional Functionality in Business Central Licensing 

In addition to these core function areas, Business Central also includes built-in business intelligence and workflow optimization across all fields. Within Business Central, you can gain valuable insight into business activity performance metrics through budgets, account schedules, and detailed analysis. 

When it comes to requesting and granting approvals to create or post documents, you can easily set up and use workflows that connect tasks performed by different users or by the system—reducing overall work hours, minimizing processing errors, and improving interdepartmental communication. 

By purchasing an additional license, businesses have access to full versions of the Microsoft Power Platform. Additionally, users gain access to a high-productivity platform that includes various tools that connect to Business Central, Office 365, and many other software systems and databases. A Business Central license, by default, offers only a “light” version of these services. 

The Power Platform includes Power Apps, Power Automate, and Power BI, which allows you to customize applications, automate business processes, and streamline workflows. 

Add-Ons, Extensions, and Dynamics 365 Business Central Flexibility 

What truly sets Business Central apart from other ERPs is the ability to integrate with industry and function-based business applications that tailor your operational management abilities to what you need and without compromising the integrity of your core system.  

Businesses with needs beyond the core capabilities of Business Central have access to thousands of third-party ‘extensions’ available on Microsoft AppSource. From local banking and eCommerce to industry-specific applications, this software is developed to enhance Business Central’s functionality and optimize your business. Since extensions are built using the Common Data Model, they are easy to download and integrate seamlessly into your Business Central system without affecting or inhibiting updates. Best of all, most offer trials before you purchase.  

Business Central and its extensions are hosted on Microsoft Azure’s cloud platform and include their industry-leading security, 99.5% uptime SLA, and full access to Microsoft 365. Furthermore, Business Central licensing offers Microsoft’s intelligent technologies, support, automatic software updates, and full control over permissions and access—perfect for hybrid work environments. 

Business Central Licensing 

Now that you understand what Microsoft Dynamics 365 Business Central and its extensions can offer your business, we’ll look at licensing and how it can grant access to users at different levels within your organization. For the purposes of this guide, we want to concentrate on the most common and widely directed licensing of Business Central for the subscription SaaS (software as a service) model and Microsoft Azure hosting. 

As a SaaS solution, Business Central’s functionality is offered through monthly subscription licenses that include secure storage, cloud hosting, and uninterrupted access to your business data and applications. It does not require hardware, infrastructure storage, or maintenance. 

There are two Business Central versions that you can choose between—each will determine your out-of-the-box functionality before integrating add-ons. Additionally, Business Central uses a “named user” model, which means that anybody who will use the software needs their own license. This is a diversion from the ‘concurrent’ license model of Business Central’s predecessor, Dynamics NAV.  

That doesn’t mean your software costs will skyrocket—this simply means that you must identify who in your organization gets a full user license and what other additional user licenses you will require at a lower cost. 

MICROSOFT DYNAMICS 365 BUSINESS CENTRAL ESSENTIALS MICROSOFT DYNAMICS 365 BUSINESS CENTRAL PREMIUM
The “base-model”, including all core functionality listed under “Business Central Functionality” above. A premium service that includes all Essentials functionality, with added capability for manufacturing and service order.
$70 user/month $100 user/month

Prices above reflect ‘Full’ licensing, but not all employees may require this. Additional packages for such lower-priority users are as follows: 

Team Member License Device License
A limited, read-only license for Business Central. Subscribers can read anything on the platform but cannot post transactions, update existing entries, or submit new data.

Includes limited access to approvals.
A device license grants device-specific access to Business Central—typically in cases where multiple users require access to the same device. Any number of users can access the device with unique logins but will not require separate user licenses. Device Licenses include Point of Sale, Store Management Devices, Shop Floor Management Devices, and Warehouse Device Management Devices.
$8 user/month $40 device/month

Keep in mind that the above licensing and pricing does not include the cost of any extensions from Microsoft AppSource, extensions that are custom built by a certified developer to tailor Business Central to your processes, implementation, configuration, training, consulting, or services.  

To determine the scale of these needs for your organization, you should speak with a trusted Microsoft Dynamics 365 implementing partner who can outline and roadmap the best approach for your requirements and budget. 

Business Central Multi-Tenant Options 

While the licensing and packages reviewed above are straightforward, some multi-tenant SaaS licensing options are available for businesses. These are usually offered to third-party hosting companies, accounting firms, and service providers that are looking to share deployments of Business Central with other companies but segment client data separately.  

Generally, multi-tenant eliminates the ability to add customizations or extensions discussed earlier. If you are considering either of these outlier options, you should contact a Wye Core expert to dive deeper into the pricing and details of these unique deployments. 

Make the Move to Business Central with Wye Core 

For any small-to-medium-sized company moving from basic accounting software or upgrading from another system, Microsoft Dynamics 365 Business Central offers powerful and scalable solutions. 

A Wye Core, we deliver Microsoft cloud business applications for any sized business. By focusing on the people that allow your business to thrive and the user learning experience, we are changing the face of how companies use technology to secure exponential growth.  

Now that you know more about the Business Central solution, we are here to help you dive into specific questions about how it will work within your operations, as well as what features are most required to secure impactful and lasting results. 

Book a demo with our experienced team of Business Central and ERP experts today—we can answer your questions and give you an interactive demonstration of what you can expect when migrating to the Business Central suite and a custom quote.