How to Prepare for a Microsoft Dynamics 365 ERP Licensing Quote

Microsoft provides detailed licensing guides for download on the Dynamics web page. These were designed to help you determine what licenses you need. There is a separate guide for Dynamics 365 Finance & Supply Chain Management (F&SCM) and Business Central (BC). There is also a special guide targeted at existing Microsoft clients using GP, NAV, BC and AX, which addresses the migration discounts available. The licensing guides are quite difficult to navigate but are worth reading through at least once. 

Both BC and F&SCM are based on NAMED USERS. This is a different basis than GP and NAV were sold and new user counts will need to be determined. The licensing for AX2012 and F&SCM is similar (named users) but now, clients will need to determine whether their users need access to the Finance suite, the Supply Chain suite, or both.

For clients that buy their MSFT licenses directly from their partner, there is a program that provides for a “trade in” discount on the licenses you already own. For those who buy through an Enterprise Agreement (Finance & Supply Chain Management only), prices are supplied directly from Microsoft.

To work out your licenses, we recommend starting off by cracking open a spreadsheet!

A note on Multiplexing: Take special note of the multiplexing rules in the licensing guide if you are using integrated third-party (or custom built) integrated applications. The rules are the same for BC and F&SCM. Users of an integrated third-party WMS system, for example, may also need Dynamics licenses.

Key Takeaways

  • Its painful but has to be done! Download and study the Dynamics licensing guides from the Microsoft website.
  • Know the various ways you can purchase software and what the strengths and limitations are for each option.
  • Work out your named user counts.
  • Ask your partner to help with licensing and pricing. If you are eligible to buy F&SCM on a volume (Enterprise) agreement, speak to your Microsoft account manager.

Business Central Licensing

BC has two versions, Essentials and Premium. Essentials excludes Service Management and Manufacturing. The Full user license for BC Essentials on SaaS is $70*/per user per month (pupm). The Full user license for BC Premium is $100*/pupm. Development tools for BC SaaS are priced separately. There are two user types, a Full user and Team user. The TEAM user is for basic transaction entry for things like timesheets and expense claims. It also entitles the user to a READ ONLY access to the data. There is also a DEVICE** license, used for scenarios where multiple users share a single device, such as shared scanners in the warehouse or on the production floor, or POS terminals in a retail environment.

* Current at time of writing. Please refer to Microsoft Pricing online to verify.
** Only available for Cloud version.


F&SCM has three user types based on named users.

Dynamics 365 Finance and Supply Chain Full User

A F&SCM FULL user is $180*/user per month (pupm) for the first app (which can either be FINANCE or SUPPLY CHAIN). The second app (called an ATTACH SKU) is an additional $30*/pupm. A user must first have a full priced SKU if they are to be licensed to use the software. If they need access to functionality outside that SKU, the attach pricing applies.

Activity User

An ACTIVITY user is designed for transactional users that have limited system access (see user guide for details on what functionality these users can access). Note that there is an opportunity to reduce the overall subscription costs by changing role alignments and utilizing the Activity SKU wherever possible with F&SCM. In our experience, everyone on the Finance team will require a Supply Chain SKU, but many people using the Supply Chain SKU may not need access to Financials.

Team User

The TEAM user is for basic transaction entry for things like timesheets and expense claims. It also entitles the user to a READ ONLY access to the data.

Other Types of Users

There are also Device users (shared devices such as scanners or POS terminals) and Order Line licenses (a volume-based pricing mechanism which handles situation when a high volume of orders are not keyed but come into F&SCM though integration or interfaces with other systems).

How to Prepare for your quote

Make a list for ALL the users you want named

For each user, decide on whether they need access to FINANCE, SUPPLY CHAIN or BOTH. This task also needs to be performed for the Commerce solution and any other Dynamics applications (Sales, Marketing etc) being deployed.

Then again, for each user, determine whether they need a FULL, ACTIVITY or TEAM license. A user’s access will be tied to their security role. The security role determines what features they can access. Check out the security role details in the back of the Microsoft guide. Or ask your Partner. Many partners have Excel spreadsheets that might help with this.

Identify the number of device users

Determine whether you would benefit from the Order Lines license to support receiving of orders from external sources and also determine, under the multiplexing rules, you will need equivalent F&SCM licenses for the transactions entered in an integrated external system.

* Current at time of writing. Please refer to Microsoft Pricing online to verify.
** Only available for Cloud version.


When reviewing the license guides take note of what entitlements you get to use other Dynamics products (such as the power platform apps) and the limitations on those entitlements.


The above process is not intended to outline all pricing permutations (it doesn’t include sandboxes for example, or Azure consumption costs if you are going BC on-premise on Azure).


According to Gartner, 75% of ERP projects fail.  But with good planning and strong process organization, the most common pitfalls can be avoided.

Specifically made for companies interested in Dynamics 365, this comprehensive 72-page guide delivers expert advice from eight seasoned experts to help you reduce costs and lay the foundation for a successful project. 

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