How do you Choose the Right Business Companion: Dynamics 365 Business Central vs Finance

Marketing Team
Published on December 26, 2021

ERP, CRM, and BI (Enterprise Resource Planning, Customer Relationship Management, and Business Intelligence, respectively) are all integrated within Microsoft's Dynamics 365 (D365) platform. This implies that your people, processes, and technologies can all work together to provide you with the visibility you need to move your company ahead.

Within the D365 family, there are now two ERP solutions: D365 Business Central (previously NAV) and D365 Finance & Operations (formerly AX). What are the distinctions between them? And how do you know which option is best for your company? Let’s get into the details to help you choose the right business companion.

Microsoft Dynamics 365 Business Central

Small-to-medium-sized organizations can use Dynamics 365 Business Central to manage their finances, operations, sales, customer service, and more from a single cloud-based platform. BC gives end-to-end visibility, allowing organizations to see how their business is doing at a glance. You can embed Power BI charts across the platform for intelligent insights, and you can integrate with Excel and Outlook to streamline operations and communications. Users can also add CRM modules to the base plan to give certain teams, such as sales, customer support, or HR, access to sophisticated capabilities. They can use Customer Insights or Power BI to enrich the platform's insights. ISV solutions for Business Central can also be incorporated. For users of NAV and GP, Business Central is the "natural" upgrading path. That is if their business strategy hasn't changed significantly. Consider adding new locations, portfolio brands, or product lines to your portfolio. The Business Central comes with two modules – Essentials and Premium, with flexible licensing options.

Dynamics 365 Business Central Essentials includes:

  • Financial Management: A basic general ledger, budgets, bank account administration and reconciliation, account schedules, different currencies, and other features are included in this module. This module will cover any financial component of your business that you require assistance with.
  • Supply Chain Management: This is one of the larger modules, and it will help you manage invoicing, requisitions, basic inventory, budgets, and even sales tax/VAT.
  • Customer Relationship Management: With this module, you can easily manage your contacts, campaigns, connections, opportunities, and all client communications.
  • Human Resource Management: This module, maybe the most obvious, will assist you with all of your fundamental human resource needs.
  • Project Management: Here you'll find everything you need to handle individual projects, including work estimates, timesheets, and basic resources, among other things.
  • Warehouse Management: Automated data collection, internal picks and put away, and warehouse management systems make it simple to operate your warehouse.

Dynamics 365 Business Central Premium includes:

  • Everything in Essentials PLUS
  • Service Management: Service contract management, service item management, service order management, and service price management are all aspects of service management.
  • Manufacturing: Standard cost worksheets, production bill of materials, basic capacity planning, machine centers, version management, production orders, and finite loading are all examples of assembly management.

Microsoft Dynamics 365 Finance (formerly Finance & Operations)

Dynamics 365 Finance is the most advanced ERP solution in the Microsoft Dynamics ERP package, and it represents a move from Dynamics AX. While AX users will retain a lot of its functionality, Dynamics 365 Finance has a lot of new features and powerful capabilities like AI and machine learning. The modular application design of Dynamics 365 Finance will appeal to businesses searching for maximum power and flexibility. You can begin with your core financial management platform and then add on the features you require. It is ideal for medium to large enterprises, global companies, and businesses with particularly complex operations such as manufacturing, distribution, and supply chain management. While it is perfectly scalable to many businesses, it is best for medium to large enterprises, global companies, and businesses with particularly complex operations such as manufacturing, distribution, and supply chain management. Here are some of the other features Dynamics 365 Finance offers:

  • Supply Chain Management: Supply Chain Management is a collection of smart logistics management applications. These modules, which are based on artificial intelligence and can be readily linked with third-party IoT solutions, assist you in achieving maximum productivity.
  • Commerce: This category of modules is intended to improve the controllability and visibility of trade operations conducted through traditional retail, web malls, and linked commerce platforms. It provides multichannel interaction with partners and customers.
  • Human Resources: Human resources streamlines many routine recordkeeping tasks and automates several processes related to staffing your organization. It also provides a framework for human resources staff to manage areas of oversight.
  • Sales: This module was created to make sales easier, whether your firm is focused on B2B or B2C. It can be used to manage and develop a consistent sales process inside your organization. The sales module includes everything you'll need to turn your relationships into revenue.

What should you consider before choosing the right solution?

  • Process review & analysis: What are your objectives for this implementation? Strengths, limitations, pain points, and processes should all be identified and documented. What are your company objectives/requirements? What needs to happen for procedures to align with objectives?
  • Technical fit: Make sure the ERP is compatible with your infrastructure, and if it isn't, what do you need to improve or change to make that happen?
  • The total cost of ownership: You'll want to double-check that you're aware of all of the project's expenditures. You're not just paying for the subscription. You're also responsible for the price of implementation, training, consultants, and hardware upgrades, among other things.
  • Implementation plan: Create a realistic strategy that outlines all business needs, software, hardware, and tasks that will be involved in the implementation. How are you going to move your data and procedures to the new ERP? What strategy will you use for testing and training? Is your company "cloud-ready"? What will you need to do if that isn't the case?
  • System for tracking business impact: To get the most out of Dynamics 365, you'll need to create success metrics based on real-world business objectives. This will help you to assess the financial effect of various upgrades/features. It also makes it easy to identify crucial areas that need to be addressed.

What are the main differences between Business Central and Finance and Operations?

  • CodeBase: A system's codebase is the source code that was utilized to create the application. To put it another way, the code base is a system's framework or building elements. Both Dynamics 365 Business Central and Dynamics 365 Finance and Operations are based on the robust historical Dynamics ERP code base. Business Central is based on the Dynamics NAV codebase, whereas F&O is based on the Dynamics AX codebase. For years, Dynamics NAV has been a significant player in the ERP mid-market, while Dynamics AX was a strong player in the enterprise.
  • Target Company Size: When Microsoft first announced their cloud ERP products in 2017, it stated that BC was aimed at businesses with 10 to 250 people, while F&O was aimed at businesses with more than 250. Microsoft no longer offers this suggestion, presumably because the size of a firm isn't a strong indicator of which program should be utilized. Business Central is capable of handling operations for firms with more than 250 users. Mid-size businesses that require considerable adaptations and international localizations, on the other hand, can use F&O. If you're deciding between the two systems, consider the level of complexity and customization required in your business processes, not the size of your firm.
  • Competition: Who are Business Central's and F&O's main competitors? Oracle and SAP Enterprise are direct competitors of Dynamics 365 Finance and Operations. These technologies, as well as Dynamics 365 Finance and Operations, can cost upwards of a million dollars to implement. Meanwhile, NetSuite, Epicor, and SAP Business One compete directly with Business Central in the mid-market ERP space. These types of ERP solutions have a large market. A basic Business Central deployment can cost as little as $20,000, but a fully customized system can easily cost hundreds of thousands of dollars.
  • Deployment Time: The complexity of activities within a company, as well as the system itself, plays a big role in how an ERP program is deployed. Implementation projects for Dynamics 365 Finance and Operations might take anywhere from 6 to 36 months. This reflects the level of customization required to successfully install Dynamics 365 Finance, as well as the sheer magnitude of the enterprises doing so. Business Central installs, on the other hand, usually take only 2 to 8 months. Because of the ability to use the fundamental capabilities of Business Central out-of-the-box, these projects usually take less time. While Business Central is highly customizable, it is undeniably easier to get started with than Dynamics 365 Finance.
  • Functionality: You may get a sense of the market sectors that these applications operate in based on implementation pricing alone. Things get a little confusing in terms of functionality. Although F&O includes a few features that aren't available out of the box in Business Central, the vast majority of those features can be readily addressed with customization or add-on apps in Business Central. The way the two systems manage product setup is an illustration of this. Business Central does not have a built-in Product Configurator, although D365 F&O does. Business Central, on the other hand, can be enhanced with a variety of configurator apps. Continue for document capture, Charge Logic for credit card integration, and Binary Stream for multi-entity management are examples of Dynamics 365 Finance capabilities that may be achieved in Business Central utilizing add-ons. In reality, there are very few F&O capabilities for which Business Central does not have a ready-to-use app. These add-ons, together with BC customizations, provide the same capability for a fraction of the price.

 Dynamics 365 Business CentralDynamics 365 for Finance and Operations
User Minimum120
Price (per user, per month)Price available upon requestPrice available upon request
Target Organization Size50-250250+
CapabilityFinance, operations, supply chain, CRM, and project management are all core capabilities. The Premium package provides additional capabilities in service management and manufacturing.Finance, operations, manufacturing, and supply chain all have advanced capabilities. With the full Dynamics 365 plan, additional capabilities is offered in HR, sales, projects, and customer service across the entire Dynamics 365 range.
CRMCRM feature built-in, including Outlook integration, opportunity management, and customer service. Organizations looking for extra CRM capabilities can integrate with Dynamics 365 for Sales.Although there is no CRM feature, the full Dynamics 365 purchase plan includes Dynamics 365 for Sales. Sales and CRM capabilities are more advanced in Dynamics 365 for Sales than in Business Central.

What is the Similarity between Business Central and Finance & Operations?

Microsoft's choice for the future of the Dynamics ERP space is both Dynamics 365 Business Central and Dynamics 365 Finance. This means they have a lot in common in terms of construction. The sleek UI is the most appealing aspect. Both applications have a cutting-edge interface design that is immediately apparent. Microsoft has provided several deployment options for both programs. Both apps can be hosted on-premises, in the cloud (private or public), or in a hybrid approach. Microsoft prefers to keep the door open for companies that need to maintain their systems on-premises, despite the fact that the cloud is the way of the future. Their connectivity with Microsoft 365, power platform capabilities, and commitment to a solid mobile experience is also similar. The Google Play Store and the iOS App Store both have mobile apps for both systems, and the experience is surprisingly pleasant. You may not conduct accounting tasks on your phone on a daily basis, but you'd be amazed at how convenient it is to check on anything in your accounting system while on the go.