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Microsoft has made it official: beginning November 1, 2025, Microsoft Dynamics 365 Finance and Supply Chain Management (F&SCM) users without proper licenses will be locked out of the system. Microsoft is enforcing stricter license compliance moving forward, which means no more honor system and no more overages without consequences!
This change marks the end of a leniency period, during which customers could use more user licenses than they had officially purchased.
If your organization is non-compliant, you might experience service disruptions, penalties, or both. Additionally, you won’t be able to add new users without the required licenses, potentially impacting operations and limiting business continuity.
This change has huge implications for organizations relying on Dynamics 365 F&SCM to run financial operations, supply chains, procurement, inventory, etc.
Our blog serves as a comprehensive guide to help you understand the Microsoft D365 F&SCM license enforcement in 2025, prepare your organization for compliance, avoid non-compliance risks, and take steps to prevent unnecessary licensing costs.
What’s changing and when?
Until now, Microsoft has allowed customers to exceed their licensed user count in Dynamics 365 F&SCM. That will no longer be the case. Starting:
- April 30, 2025 – License usage reports available: Organizations will begin reviewing detailed license usage reports in Lifecycle Services (LCS) to identify users without valid licenses and prepare for upcoming enforcement.
- September 1, 2025 – Soft enforcement begins: Also known as a “soft block,” this phase introduces in-app warning banners for users without valid licenses, alerting them to the issue without restricting access.
- November 1, 2025 – Full enforcement starts: Referred to as a “hard block,” this phase will deny platform access to any users who are not properly licensed.
This includes all Dynamics 365 Finance and Supply Chain Management apps (Finance, Supply Chain Management, Commerce, Project Operations, and HR).
Why does this licensing change matter?
The upcoming enforcement of D365 F&SCM licensing will have significant consequences for organizations that aren’t prepared. After November 1, 2025, any unlicensed user will be locked out of the system, jeopardizing access to critical business functions.
What are the penalties for non-compliance?
If an organization fails to comply with the license enforcement for Microsoft Dynamics 365 Finance and Supply Chain Management (F&SCM), it could face several consequences:
1: Loss of access
- Starting November 1, 2025, unlicensed users will be blocked from accessing Dynamics 365 applications.
- This could disrupt financial operations, supply chain workflows, and other business processes.
2: Financial risks
- Organizations may need to purchase additional licenses to regain access.
- Some companies have had to buy thousands of extra licenses due to misconfigured security roles.
3: Compliance issues
- Microsoft may conduct audits to ensure proper licensing.
- Non-compliance could lead to unexpected costs or contractual penalties.
4: Operational disruptions
- Employees unable to access critical applications may experience delays in processing financial transactions, inventory management, and reporting.
- IT teams may need to reconfigure security roles to meet compliance requirements urgently.
This change isn’t just about compliance but protecting your operations, financial stability, and internal controls. Now is the time to assess, plan, and act.
Who should take action?
This upcoming enforcement will affect any organization using Dynamics 365 Finance and Supply Chain Management, particularly those in:
- Manufacturing
- Distribution
- Retail
- Professional Services
If your business is approaching a Dynamics 365 license renewal or entering into an Enterprise Agreement (EA) negotiation, ensuring compliance is not optional – it’s critical.
Key stakeholders who need to get involved:
- CIOs and IT directors – for infrastructure readiness and license governance
- CFOs and finance leaders – to manage and forecast licensing costs accurately
- ERP admins and system owners – to ensure users are properly licensed and mapped to the right roles
What can you do?
To stay ahead of the enforcement deadline, organizations should take the following steps:
- Review security roles and license assignments to verify compliance and ensure all users have the correct permissions. Misconfigured roles can lead to unnecessary license costs.
- Use the Power Platform admin center to track available and assigned licenses. This will allow you to better visualize license usage and avoid last-minute disruptions.
- Optimize security role configurations to minimize unnecessary license requirements, ensuring that employees are assigned only the roles they truly need
How can Confiz help you prepare for the D365 F&SCM license enforcement 2025?
Still unsure where to begin? You’re not alone, and that’s where we come in. At Confiz, we partner with organizations to ensure they’re fully prepared for Microsoft’s upcoming licensing enforcement, minimizing disruption and risk. Here’s how we can support you:
1: Free license compliance assessment
We start with a no-cost, 60-minute consultation. Our certified Dynamics 365 consultants will review your current licensing landscape to:
- Identify unauthorized or misassigned users
- Detecting potential security role issues
- Highlight immediate red flags that may lead to non-compliance
This rapid assessment helps to uncover hidden risks that could result in access disruptions or unnecessary licensing costs.
2: In-depth audit and optimization plan
We go beyond a surface-level check. Our team performs a deep audit of your environment to match your current system usage with licensing requirements. This includes:
- Unlicensed user count – A detailed breakdown of users lacking valid licenses.
- Role optimization opportunities – Identifying over-permissioned or outdated roles that lead to misalignment.
- Estimated licensing needs – A tailored recommendation of the licenses you need, including opportunities to reduce costs with user type adjustments or reassignments.
You will receive a comprehensive report to help you make informed decisions.
3: Remediation and technical fixes
Once the audit is complete, we help you close compliance gaps by:
- Reconfiguring security roles to reflect only what users truly need
- Deactivating or removing inactive users who are unnecessarily consuming licenses
- Assigning correct licenses based on actual usage and access requirements
- Coordinating with Microsoft or your CSP for streamlined procurement or licensing adjustments
Our team ensures your technical and governance setup is airtight before enforcement begins.
4: Ongoing monitoring and support
Compliance isn’t a one-time task. We provide:
- Periodic license audits (quarterly or biannually) to detect new risks or usage changes
- Ongoing advisory support to help you adapt to future licensing changes
- Documentation and reporting support for EA/CSP renewals or internal audits
This ensures your organization remains secure, compliant, and cost-effective well beyond November 1, 2025.
Don’t wait until it’s too late!
The window to act is closing. October will be too late to prepare without stress, and by November 1, unlicensed users will be locked out, risking financial disruptions, delayed shipments, and compliance headaches.
Now is the ideal time to assess your current Dynamics 365 F&O SCM licensing setup, address compliance gaps, and prepare for long-term success. At Confiz, we offer a free License Compliance Assessment designed to help you understand where your organization stands and what steps are needed to stay compliant.
Our experts will analyze your license mix, review your security role design, and identify opportunities to avoid unnecessary licensing costs – all while ensuring alignment with your company’s compliance policies.
To get started, contact us at marketing@confiz.com and let our team guide you toward a more secure and cost-efficient licensing posture.
