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Business Central licensing explained: Essentials vs Premium
Business Central licensing looks complicated from the outside, but it comes down to three questions. Who needs access? What does each person actually do? And does any part of the business manufacture or run service operations? Answer those and you pay for exactly what your team uses.
The model: per-user, named licences
Business Central is licensed per named user, not per device or per concurrent session. Each person who signs in needs their own licence assigned to their account. There is no shared login, and you cannot buy a pool of five licences for ten people who take turns.
Because licensing tracks people, the question is never “how many machines” but “how many distinct individuals need access”. That is a question you can answer from your org chart, which makes budgeting predictable.
What Essentials covers
Essentials is the full business-management tier and covers what most organisations need to run end to end:
- Financial management: general ledger, banking, fixed assets, budgets
- Sales and purchasing, with order processing and approvals
- Inventory and warehouse management
- Project and job management with time sheets
- Supply planning and basic relationship management
For a distributor, a services firm, a wholesaler or most SMBs, Essentials is the complete system. Nothing in the list above requires Premium.
What Premium adds
Premium includes everything in Essentials and adds exactly two functional modules:
- Manufacturing: production orders, bills of materials, routings, capacity planning, subcontracting
- Service Management: service orders, service contracts, dispatching and resource allocation for field or workshop service
If you do not make things and do not run a formal service operation, Premium gives you nothing extra to pay for. If you do either, Premium is the only tier that covers it; there is no à la carte add-on for just Manufacturing.
Team Member licences for light users
Not everyone needs full access. The Team Member licence is for people who consume data and perform light tasks: reading records, approving documents, entering time sheets, updating their own HR information. It is a fraction of the cost of a full licence.
A Team Member cannot do core transactional work; they will not process orders or post journals. The rule of thumb: full licences for the people who run a process, Team Member for the people who touch it occasionally.
Device licences and the free External Accountant
Two more licence types cover the edges. A Device licence is assigned to a shared machine rather than a person: a warehouse scanner, a shop-floor terminal, a point-of-sale station. Whoever is standing at that device uses it, which fits shift work where several people take turns on one screen and would otherwise each need a named licence.
And your accountant does not need a paid seat at all. The External Accountant licence is free and gives an external bookkeeper or auditor access to your Business Central to do their work. If you are paying for a full licence just so your accounting firm can log in, stop.
Everyone shares one tier
A single tenant runs on either Essentials or Premium for all of its full users. You cannot mix, giving the factory floor Premium and the back office Essentials on the same environment.
This is the decision that catches people out. If even one part of your business needs Manufacturing or Service Management, every full-licence user moves to Premium. Map that need before you commit, because it changes the whole-of-business cost, not just one team’s.
How to decide
The decision tree is short:
- Do you manufacture, or run service contracts and service orders? If yes, you need Premium.
- If no, Essentials covers you, and almost certainly always will.
- Count your full users, then identify who can be a Team Member instead, share a Device licence, or use the free External Accountant licence.
When in doubt, start on Essentials. Moving up to Premium later is straightforward; you are not locked in by your first choice.
Licence is not implementation
One last, important point. The licence fee is the right to use Business Central. It is entirely separate from the cost of implementing it: configuration, data migration, customisation, training and support. A common planning mistake is to budget the subscription and forget the project around it.
The licence is the smaller, predictable line item. The implementation is where the value, and the real planning, lives. Treat them as two separate budgets.
Not sure whether Essentials or Premium fits your business? Tell us your story and we will help you size it, with no pressure to over-licence.