A guide to efficient user license management in Dynamics 365 Finance and Operations

In an effort to maintain precise control, licensing compliance, and administration in Dynamics 365 Finance and Operations, Microsoft has declared that beginning August 30, 2025, all Dynamics 365 customers will be required to assign user licenses directly through the Microsoft 365 admin center.

This means customers using D365FO, which was previously on ethical licensing, will be moved to the user base licensing model and pay for what they use.

Microsoft recommends that its customers take measures to proactively review and assign appropriate licenses to users as per their application functionality access in advance. Users without assigned licenses will no longer have access to these applications and will instead receive prompts to request the appropriate licenses from their administrator for these applications:

1. Finance
2. Finance Premium
3. Supply Chain Management
4. Supply Chain Management Premium
5. Commerce
6. Project Operations (in Dynamics 365 Finance and Operations)
7. Human Resources

This blog covers the key changes in Dynamics 365 licensing and highlights the tools you can use to ensure your licensing aligns with organizational requirements and compliance standards.

Microsoft Dynamics 365 licensing overview

Below, we have provided an overview of Dynamics 365 application licenses by User, Device, or Tenant. An organization may have a mix of user, device, and tenant licenses based on its needs.

• User licenses: Grants access for a named user with personal login credentials, from any device.
• Device licenses: Grants access to a shared device using either assigned or shared logins.
• Tenant licenses: that provide access to a feature or service at the tenant level, regardless of the user or device involved.

We will briefly discuss “User licenses” that grant users full or limited access to a specific product area. Full-access user licenses are the most common. Those who require access to the full, feature-rich functionality of one or more Dynamics 365 application(s). Options for full-access users include Base and Attach licenses:

• Base license: If a single user needs to operate multiple Dynamics 365 applications (e.g., Finance, SCM, and Commerce), the first application license must be the highest-priced license (i.e., Finance or a.k.a. base license). Therefore, every full-access user must have a base license to operate the application.

• Attach license: Attach licenses may only be assigned to users with an appropriate “base license,” i.e., Finance, supply chain, or other type of base license. A user may have one or more attached licenses. For example, if a user has a base license of type “Finance” and wants to operate “SCM” or “Commerce” operations, then he is entitled to attach a license for “Supply chain” and “Commerce” to operate on it. Otherwise, the user must be attached to a base license before he/she is eligible for an attached license.

The figure below provides the base and attach user licenses subscription price per month for Dynamics 365 Finance and Operations and other applications.

How can organizations ensure license compliance and smooth transition?

Dynamics 365 F&O customers bear the burden of licensing compliance. Check out the D365 License guide for user licensing and product terms for minimum purchase requirements.

User license compliance will impact every customer, particularly when standard or custom security privileges are incorrectly mapped. Even a minor misclassification can trigger user license requirements that don’t match customer expectations and may lead to system warnings such as “Request the appropriate licenses from your administrator.”

To avoid such disruptions and maintain compliance, ensuring that all security roles are accurately defined and that the correct license types are attached to users within the system is essential. Organizations must take this opportunity to review security roles assigned to business users in the D365FO application and align the system roles with the user’s job description.

How can you stay compliant with user licensing requirements in Dynamics 365 F&O?

To comply with Microsoft licensing laws, organizations can now obtain clarity on user license type and count from the two reports listed below.

1. User licenses level overview (i.e., Power Platform Admin Center report)
2. User licenses estimator (i.e., Dynamics 365 Finance and Operations report)

Let’s understand both of these in detail.

User licenses level overview: Power Platform Admin Center Report

Power Platform Admin Center enables centralized visibility and management of “User license types and counts” for administrators in Dynamics 365 Finance and Operations (D365FO).

Step-by-step guide

Step 1: Access the Power Platform Admin Center

Log in to Power Platform Admin Center and navigate to Licenses > Finance and operations.

Step 2: Open the User License Level overview report

You will see “User license level overview report” that provides “User license levels, available, assigned, and required seats per license type and License utilization status”. As per the license level overview report summary (shown in Figure#2 below), the Total required seats are 49, whereas only 22 seats are assigned; therefore, there is a difference of 27 seats that shall be purchased. Now the question is how this report helps identify which license type and count to purchase. This is explained in the next steps.

Step 3: Evaluate User License utilization and gaps

For each user license level, the report compares Available, Assigned, and Required seats, highlighting how many more seats you are using under License utilization status. For example, under Base1 licenses (full user license), we can see that 20 user seats are available & assigned as well. However, 29 users are using full application features that require 9 more “base license” purchases, and assignment to users is required. To view required license details at user level, click View Users option which will list users to whom “base license” is not assigned, such users records are highlighted by “Warning icon” and required “license type (i.e. Finance, Supply Chain management and Commerce) is also highlighted under “Role license” column (as shown in Figure#3a).

Similarly, the Base2 license type tells that 7 users have no base license attached; therefore, they must be assigned a finance and operations base license. Click the View Users option under Base2 to see the list of users. You would have observed that “Any base” is mentioned under the “Role license” column (as shown highlighted in Figure#3b), which means any Finance and operations base license (i.e., Finance, Supply Chain management, Commerce, Project management, or HR management). Now the total count of “base license” required is 36, which is 29 (base1) + 7(base2).

Step 4: Check the Attach License Requirements

Similarly, “Attach user” indicates that three users are using more than one application (other than what is permitted by the base license), so it requires an “attach license.” Check for other user license levels and count requirements.

Figure 2: Power Platform Admin Center showing User license level overview.

Figure 3a: Power Platform Admin Center – Base1 shows a list of users without the “base license.”

Figure 3b: Power Platform Admin Center – Base2 showing list of users where “attach license” is missing.

User licenses estimator: Dynamics 365 Finance and Operations Report

Let’s compare and reconcile the user license types and counts in the Power Platform Admin Center “User license level overview” report with the Dynamics 365FO report named “User license estimator.” The D365FO report depends on a “Named user license count reports processing” batch job; the steps below will guide you through running the batch job and report to get the latest user license estimated stats.

Step 1: Launch the Dynamics 365 Finance and Operations application

Open the Dynamics 365 Finance and Operations application.

Go to System administration > Inquiries > batch jobs.

Search for “Named user license count reports processing” batch job and change the “scheduled start date/time” to yesterday or the day before yesterday (as shown in Figure#4 below).

Step 2: Reschedule and run the license count batch job

The batch job status will be changed to “executing.” Wait for it to finish, and it will return to “Waiting” status. Next, you shall run the “User license estimator report” and see the updated stats of “License types” and “license count.”

Go to System administration > Inquiries > License reports > User License estimator

The report dialog will open as shown in Figure#5 below. Click OK to run the report.

Step 3: Review the estimated license requirements

The “User license estimator” report shows license count for full-user licenses only; it doesn’t include other license requirements like Team member or Devices, etc. And the total license count in this report shows a total of 36 base licenses required (which is 36=28+5+1+2, see Total in the report end), which matches the sum of Base1 and Base2 licenses in the “User license level overview” report in Power Admin Center. Hence, both reports are reconciled and help environment admins to estimate the licenses required for compliance and smooth operations in Dynamics 365 Finance and Operations applications.

Figure 4: Shows the “Named user license count reports processing” batch job.

Figure 5: Shows the User license estimator report dialog under System administrator > inquiries > License reports.

Figure 6: The user license estimator report shows the full user license count, which should match the Base1 and Base2 licenses in the Power Admin Center report.

Conclusion

By leveraging the Power Platform Admin Center and Dynamics 365 Finance and Operations reports, environment admins can gain clarity on the types and quantities of licenses required. This helps ensure the right users are assigned the appropriate roles in supply chain, finance, or commerce, enabling smarter license purchasing decisions aligned with organizational needs.

Need help navigating Dynamics 365 licensing? Email us at marketing@confiz.com for more insights and queries on Dynamics 365 pricing and licensing.