September 28, 2022

    Microsoft Dynamics 365 Business Central Licensing: What You Need to Know

    Microsoft Dynamics 365 Business Central (BC) is a robust, all-in-one ERP system for small to mid-sized businesses (SMBs). It enables companies to manage finance, supply chain, manufacturing, warehousing, service orders and more, all from a central platform. This is similar to Microsoft Dynamics GP (Great Plains) in that GP also includes a wide range of features and functionality. That makes Dynamics 365 Business Central a good fit for many organizations looking to move to a SaaS solution. As a solution hosted in Microsoft’s public Cloud, it means that organizations must become familiar with BC’s licensing model.   

    On-premises legacy solutions like Dynamics GP had an initial purchase cost and ongoing annual enhancement costs. BC is a hosted, subscription-based solution, and the monthly user fee includes both the software and management of the hosting environment. The automatic updates to BC, along with the removal of the on-premises infrastructure maintenance, means that in the long run, for many organizations, BC is less expensive than GP.   

    Microsoft Dynamics 365 Business Central’s payment structure can be challenging to navigate, especially for businesses migrating from legacy systems. For instance, how do you know what level of licensing you need? How much do licenses cost? And, is migrating from GP to Dynamics 365 Business Central worth the price of a monthly subscription?  

    Below, we will look at the types of BC licenses, associated costs and how to determine what level of licensing your business needs. 

    Types of Business Central Licenses 

    The two licensing options for Dynamics 365 Business Central are Essentials and Premium. Each provides access to a wide range of features and capabilities. Once you determine the functionality that’ll accommodate your business needs, all your user licenses will be under that option. In other words, all your full users will either be Essentials users or Premium users. 

    When considering how many user licenses you need, there’s an important distinction between the GP model and BC licensing. GP user licenses are concurrent which limits the number of users who can be logged into the system at any one time. BC licenses are named users and each person who logs into the system must have their own user license. When you think about how many BC licenses to buy, review your entire list of GP users to determine how many people will need a BC license.  

    Dynamics 365 Business Central Essentials License 

    Essentials licenses are the first level of Dynamics 365 Business Central user licenses, and a broad variety of organizations find that this meets their business needs. Essentials licenses are $70 per user per month. The Essentials license includes the following capabilities: 

    • Financial Management 
    • Supply Chain Management 
    • Human Resources Management 
    • Warehouse Management and Inventory 
    • Project Management 
    • Customer Relationship Management 

    Dynamics 365 Business Central Premium License 

    Premium licenses build upon the Essentials license and are $100 per user per month. The capabilities include all the same features as the Essentials license, plus the following: 

    • Service Order Management 
    • Manufacturing 

    Dynamics 365 Business Central Team Member License 

    There’s an additional license to consider called the Team Member license. Users who require read-only access, or who approve or reject workflows assigned to them in Dynamics 365 Business Central, can utilize a Team Member license. For users who don’t need a full Essentials or Premium user license, the Team Member license is a good alternative. Team Member licenses are $8 per user per month. Consider your GP Limited and Self-service users when deciding who needs a Team Member License; the access is similar. 

    Migrating from GP to BCIs it Worth the Cost? 

    Because the payment structure between GP and D365 Business Central is so different, some businesses are hesitant to migrate. But BC offers a wide variety of cost-saving features that make the new subscription program well worth the cost.  

    For instance, Business Central is a Cloud-based ERP within the Dynamics 365 family of programs. When you migrate to the Cloud, you gain access to Microsoft’s robust security measures, data storage, bug fixes and regular updates. This means that, once you migrate your systems and data to the Cloud, you no longer need to maintain any in-house infrastructure.  

    In addition, once you migrate to Dynamics 365 Business Central, you’ll be able to connect with a broader range of Independent Software Vendor (ISV) solutions, and your teams will have access to more streamlined workflows and automation, enabling them to be more productive and effective.  

    For most SMBs, the benefits of BC far outweigh the monthly subscription feesespecially if you have a trusted Microsoft partner to walk you through your migration.  

    How Do You Know What Licenses You Need? 

    It can be challenging to determine what licenses you need for your organization. Do you need Essentials or Premium licenses for full access users? What about Team Member licenses?  

    A certified Microsoft partner can help you explore various licensing options and find the best plan for your company. By working with a partner, you can ensure you have the features you need without overpaying for unnecessary functionality.  

    Discover how your GP environment would migrate to Business Central with our free, five-minute migration assessment tool. 


    Carolyn Newell-Robbins

    Carolyn has 20 years of experience implementing Dynamics GP and related ISV solutions. In the last several years she has been in a Solution Architect role for Dynamics GP and D365 Business Central, advising and guiding clients on their roadmap for the future.

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