Everything you need to know about Business Central licensing

Understanding Dynamics 365 Business Central licensing is important for budgeting and strategic planning. Business Central is sold as a cloud subscription service, and there are multiple Business Central license types designed to fit different user roles and business needs. In this post, we explain what Business Central is, how its licensing works, the differences between Business Central licenses, and how Rand Group can help you choose the right option.

Microsoft Dynamics 365 Business Central is an all-in-one, cloud-based business management solution that helps small and medium-sized businesses streamline their operations. It integrates core business functions like finance, sales, customer service, supply chain, and more into a single system, giving organizations real-time insights and improved productivity. Business Central serves as a modern enterprise resource planning (ERP) system, delivered via the cloud. Instead of installing software on servers and purchasing perpetual licenses, companies subscribe to Business Central and access it through a web browser or app. This cloud-based model means a Business Central license is priced per user and renewed on a subscription basis, offering flexibility as your company grows or your needs change.

To learn more about what Business Central is, its capabilities, benefits, and more, read our blog on What is Business Central?

Dynamics 365 Business Central licensing is subscription-based and priced per named user (not concurrent users). Every individual using the system needs their own license. Organizations typically purchase licenses through a Microsoft partner and can choose different subscription terms:

• Monthly term: Allows paying month-to-month with the ability to reduce or cancel licenses more flexibly. However, monthly plans usually cost about 20% more than longer commitments. For example, the standard price for an Essentials user is $70 per month on an annual plan, but on a purely month-to-month plan, it would be roughly $84/month.
• Annual term: The most common option—you commit to a 12-month subscription for each user. Billing can be annual or monthly, but the key is that you are locked in for the year. Annual plans offer better pricing (no 20% premium) and price protection during the term. You can add additional users mid-term (prorated to the renewal date), but generally cannot drop licenses until the annual renewal.
• Multi–year term: For longer planning horizons, Microsoft also offers multi-year subscriptions (often 36 months) that lock in pricing and protect against future price increases. Some companies choose a three-year term for stability. Two-year terms may also be available. These longer commitments ensure a fixed cost per user over the period.

It is important to note that all subscriptions are named-user licenses. This means that each license is assigned to a specific user. If a person leaves the company, you can reassign their license to a new hire, but you cannot have two people sharing one license. Whether you opt for a monthly or annual agreement, you’ll be choosing a number of user licenses for each of the Business Central license categories.

Additionally, Microsoft has announced a price adjustment for Dynamics 365 Business Central, effective October 1, 2025. Essentials licenses will increase to $80 per user per month, and Premium will increase to $110 per user per month. To lock in the lower price before the price increase, contact us today.

There are three primary Business Central license types designed to accommodate different levels of functionality and user needs: Team Members, Essentials, and Premium. Each license type provides a different level of access to Business Central’s features at different price points.

• Essentials license (full user): Standard full-user license covering core ERP functions such as finance, sales, purchasing, inventory management, and basic project management; suitable for general business use, excluding advanced manufacturing and service management.
• Premium license (full user): Includes all Essentials functionality plus advanced manufacturing and service management features; necessary for businesses with production operations or complex field service needs.
• Team Members license: A “light use” license for viewing reports, approving workflows, and performing minor self-service tasks; cannot create new transactions or master records; ideal for executives or occasional users needing limited interaction.
• Device license: Intended for scenarios where multiple users share a single device, such as in retail point-of-sale systems, warehouses, or manufacturing shop floors. This license allows multiple individuals to access Business Central through a shared device without needing individual user licenses. It is cost-effective for environments with shared workstations.

The table below compares the two full-user license types—Essentials and Premium—and highlights which capabilities are included in each:

To learn more about the different types of licenses, read our blog on Business Central Essentials vs Premium.

While full users are assigned either Essentials or Premium licenses based on business needs, Microsoft also offers secondary license types for users with limited roles or those who access the system via shared workstations. The next table compares the two most common secondary licenses and outlines how each is typically used, what access they provide, and their limitations:

Rand Group is your trusted partner for navigating the complexities of Dynamics 365 Business Central licensing. Choosing the ideal licensing setup involves critical decisions around selecting D365 BC Essentials vs Premium and determining the number of licenses needed. Rand Group leverages decades of expertise to help organizations optimize their Business Central investment. Our proactive advisory services ensure your licensing strategy aligns with your business goals, user requirements, and budget constraints.

Our comprehensive services include:

• Guiding you through Essentials and Premium license selection
• Assessing your organizational needs and recommending the ideal licensing mix
• Configuring and deploying Business Central to match your business processes
• Managing subscription setup, including monthly, annual, or multi-year options
• Data migration and user training for smooth implementation
• Ongoing Business Central support to maximize your ERP investment

Rand Group’s approach ensures you have precisely the licenses you need, resulting in an optimized, cost-effective solution tailored specifically to your business.

With the right licensing strategy, Dynamics 365 Business Central can be a powerful and affordable solution for your organization. Rand Group’s experts are here to help you understand the options, choose the best Business Central license for each of your users, and successfully implement the system to drive value for your business. Whether you’re upgrading from a legacy system or evaluating Business Central for the first time, our advisory and implementation services will ensure you get the maximum benefit for the right licensing investment. Contact our team today to learn more.