Dynamics GP vs Dynamics 365 Business Central

Many of you might be wondering: which Dynamics ERP solution is right for me? Dynamics GP and Dynamics 365 Business Central are quite similar — but they have some notable differences.

Below I’ll give you an overview of each solution, a comparison table, and some special considerations for remote work.

Both of these products are aimed at small and medium-sized businesses, and are best suited for managing an organization’s core finances. But there are some key differences in licensing, hosting, upgrades/updates, and functionality.

Microsoft Dynamics GP

With Microsoft Dynamics GP, you have options in both licensing and hosting to choose your solution to suit your needs.

GP Licensing Options

  • Perpetual licensing — you own your licensing.
  • Subscription licensing — you have the flexibility of paying monthly.

GP Hosting Options

  • On-premise hosting — you maintain your own servers.
  • Cloud hosting — your servers are hosted through Infrastructure as a Service (Iaas).

With perpetual licensing, you pay the full licensing costs up-front, starting from $5,000 USD for 3 users (or $6,167 CAD). You also pay an annual fee to Microsoft after that. Encore customers typically pay 18% the first year and 16% after that. Subscription licensing avoids that large initial capital expense.

With cloud hosting, you save the cost and risk of upgrading your servers every 2–3 years. Cloud hosting also provides superior security and easier remote work options. Your Dynamics partner may also offer additional cloud perks such as 24-hour monitoring, weekly server updates, break-fix support, and automatic backups.

However, companies that have special data regulations or that are located in areas with weak Internet connectivity may find the on-premise option better suited for their needs.

GP Packs and Add-Ons

You can extend the functionality of Dynamics GP through 2 additional “packs” from Microsoft and a very deep pool of ISV add-ons that has built up over the years. However, Dynamics 365 Business Central has also added a lot of ways to extend its functionality since it was released in 2018.

For instance, you may have heard that one of the biggest functions that GP has that Business Central does not have out of the box is payroll. However, you can now purchase a Dynamics 365 app to fill this gap. An experienced partner can help you make a strategic decision as to what option is best for your company’s payroll needs, and how to implement that option most effectively.

Dynamics GP to Dynamics 365 Business Central: Build Your Own Package

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Is Microsoft Dynamics GP Going Away?

No, it is not going away. Microsoft has made it clear that it values all of its GP customers and isn’t forcing any company to move off of GP. The latest GP version was released October 2020, and there are regular service pack updates multiple times a year.

Microsoft Dynamics 365 Business Central

Dynamics 365 Business Central is Microsoft’s latest financial management software product. It is not replacing GP, but it is built for the same target market as GP.

The biggest thing to know is that Business Central is usually licensed on a full “SaaS” model (Software as a Service). A full SaaS model means that you pay monthly subscription licensing and you’re hosted in the Azure Cloud. The benefit of the SaaS model is that Microsoft automatically pushes out enhancements, bug-fixes, and updates for your solution — no more upgrades! There is also no up-front cost for hardware, servers, or other components, which is great for companies with little or no dedicated IT resources.

For companies that need it, there is also an option to have Business Central On-Premise. However, the data security is not as strong, and you do have to pay for servers, etc.

Business Central Licensing and Apps

Whereas GP has 2 packs from Microsoft that extend its functionality, Business Central lets you choose whether to license your users with essential or premium functionality. (All your users must be the same type.) See our Dynamics 365 Business Central | Licensing and Pricing blog for more information.

For 3rd-party extensions, Business Central has apps. From the user’s perspective, Business Central 3rd-party apps and GP add-ons are roughly equivalent. Read more about what happens to Dynamics GP add-ons in a transition to Dynamics 365 Business Central.

But the apps are much easier for 3rd parties to create and sell, so you can expect more and more of them to become available through Microsoft AppSource at an accelerating pace.

Overall, Business Central is “the future,” and will be receiving the lion’s share of Microsoft’s future development efforts and attention. Dynamics GP won’t be replaced, but if you are looking to adopt cutting-edge new features, these will be implemented in Business Central way before GP.

GP vs Business Central Functionality

Microsoft Dynamics GP and Dynamics 365 Business Central are quite similar when it comes to their functionality. Both offer ways to segment the general ledger account structure, budgeting, reporting, and support for fixed asset management and eBanking.

Below is a table with some comparisons between Dynamics GP and Dynamics 365 Business Central:

Product/Feature Dynamics GP Dynamics 365 Business Central
Hosting On-premise or IaaS (not included). Cloud (included). There is also an on-premise option.
Licensing Price Perpetual licensing starts from $5,000 USD for 3 users ($6,167 CAD). Subscription licensing starts from $65/user/month (USD or CAD). $70 USD/user/month
($89.60 CAD)
Upgrades/Updates GP 2019 October release and later — free service pack updates.
Earlier GP versions — manual upgrades.
Free and automated updates
Add-on Options Large pool of add-ons Large and rapidly growing pool of apps
Power BI Integration YES – some effort YES – little effort
Budgeting Setup and import Excel-based budgets. Advanced capabilities through ISVs. Create multiple budgets for financials, revisions, analysis, and dimensional reporting.
US & Canadian Payroll YES YES — through apps
Dynamics 365 Sales/CRM Integration YES — significant effort YES — little effort
Financial Reporting Management Reporter and Jet Reports Leverages account schedules and analysis views. Can also use Jet Reports.
GL Account Structure Multiple segments for structure Dimensional chart of accounts
Purchase Orders Requisitions, PO creation, separate inventory receipt, and 3-way PO invoice matching. PO creation, separate inventory receipt, and 3-way PO invoice matching. Does not have requisitions.

GP and Business Central provide similar functionality for

  • Bill of Materials
  • eBanking
  • Fixed Assets
  • Inter-company Processing
  • Inventory Tracking
  • Multiple Currencies
  • Multiple Entities
  • SQL Server Reporting Services

However, Business Central’s dimensional accounting makes analyzing your records simpler. Dimensions let you define analysis categories and then “tag” your data so you can quickly review, for instance, travel expenses across several different departments. See the features gained in Dynamics 365 Business Central and the benefits of a Cloud ERP in our infographic.

Remote Work Capabilities in GP and Business Central

Both GP and Business Central have remote work capabilities. How to best use those depends on how your ERP is deployed: on-premise or in the cloud.

If you have an on-premise deployment in either ERP, you can set your team up for remote work by, for instance, (1) setting up your team members’ RDP or VPN connections back to your head office, or (2) setting up an internet-facing deployment for your ERP.

If you have a cloud deployment in GP or Business Central, that’s faster to get started with remote work: connecting to your ERP is just like logging on to any webpage. (You authenticate using your Microsoft account.)

If you’re considering changing between ERPs, be aware that cloud deployment is easier with Business Central, although (as we stated above) it’s possible with GP too.

GP or Business Central: Which ERP Solution Is Best for You?

There is no single correct answer to this, as every company is different and has its own needs and requirements.

Should I Transition from Dynamics GP to Business Central?

Many current Dynamics GP customers are very tempted to switch from GP to Business Central. There is an easy learning curve for users because Business Central’s interface is so similar to GP’s.

If this is you, you may want to read more about the GP roadmap and check that you satisfy several of the following conditions:

  • You feel Dynamics GP is too expensive on a yearly basis.
  • You want to reduce cost and/or risk by hosting your data and application in the cloud.
  • Any critical business process for which you currently use a 3rd-party add-on has an equivalent Dynamics 365 app available in AppSource. (A partner can help you find and vet the apps for your needs.) Or it’s possible that the functionality is available out the box in Business Central and you may no longer need an add-on.
  • There is a particular difficulty in GP or a feature in Business Central that makes you want to switch. Here are 4 common ones:
    1. You want Business Central’s dimensional chart of accounts, which makes the reporting more meaningful and powerful than in GP.
    2. You want your finance team to work more smoothly with your operations team, using project accounting (“jobs”) in Business Central.
    3. You want faster and more flexible analysis of all your data.
    4. You want to let your staff configure their own interfaces without having to purchase add-ons or hire consultants.

If you’re interested in transitioning to Dynamics 365 Business Central, try out our Price Calculator. It’s a tool that allows you to easily create your customized fixed price package by selecting the capabilities you want in Dynamics 365 Business Central. Try it out now!

Why are Dynamics GP Clients Transitioning to Dynamics 365 Business Central in the Cloud?

Some of the main reasons Dynamics GP clients are transitioning to Dynamics 365 Business Central in the cloud include:

  • Predictable and flexible cost
  • Always on the latest version of the solution
  • No more infrastructure management
  • Security managed by Microsoft team
  • Seamless integration with other Microsoft products
  • Work from anywhere, on any device
  • Gain features in Dynamics 365 Business Central
  • Centralized data
  • Predictive analytics, AI, and data visualizations
  • Be ready for the future and what’s next

Predictable and flexible cost means that there is a predictable monthly price that includes maintenance and infrastructure costs. There are no more surprise upgrade costs. Customers can scale license types for current business needs which means you can add or remove users as needed.

Always on the latest version of the solution because two major updates are automatically pushed out during the year for Dynamics 365 Business Central, one in the spring and one in the fall. This eliminates the need to upgrade, which is something that cost additional time and expense in Dynamics GP.

No more infrastructure management with Dynamics 365 Business Central in the cloud. With cloud technology, you’ll never have to manage or purchase new infrastructure and you’ll never have to upgrade or patch your ERP solution.

Security managed by Microsoft team because your sensitive business data is stored in highly secure state-of-the-art data centers that are owned and managed by Microsoft. With a cloud solution, security monitoring and threat management are handled by the Microsoft team. This allows your business’s IT resources to focus their efforts elsewhere by decreasing the dependency on IT. There is peace of mind that your data will be there when you need it thanks to a 99.9% uptime service level agreement.

Seamless integration with other Microsoft products such as Excel, Outlook, Word, the Power Platform (Power BI, Power Automate, Power Apps, Power Virtual Agents), and other Dynamics 365 solutions such as Sales or Customer Service.

Work from anywhere, on any device. This empowers a mobile workforce with access to the same tools found in desktop application versions. The user experience is consistent and secure across all devices and operating systems (Android, iPhone, etc.). The user experience is consistent and secure across all devices.

Gain features in Dynamics 365 Business Central which include Dimensional Chart of Accounts, Financial reporting capabilities, search capabilities, Excel Publishing, and Microsoft 365 integration.

Centralized data from Accounting, Sales, Purchasing inventory and customer interactions to give an accurate end-to-end view of your business, spot trends, and deliver greater customer experiences.

Predictive analytics, AI, and data visualizations can help users analyze business data and make informed decisions.

Be ready for the future and what’s next because your system will always be current so you can take advantage of the latest technology.

Dynamics GP Is Still Powerful

Dynamics GP has strong business rules and a very intuitive interface. It’s simple and follows best practices from a business or finance perspective, especially for traditional businesses. It also offers a wide variety of options from many ISV providers for additional functionality. This is what makes — and will continue to make — Dynamics GP such a valuable tool.

Dynamics GP has been around for over 20 years and it’s one of the most popular ERP solutions there is today! Even though we are all excited about the introduction and future of Dynamics 365 Business Central, and even though Microsoft is focused on future SaaS offerings, Encore continues to support hundreds of customers on Dynamics GP.

If you would like more information or have any questions about what ERP solution is right for you, please contact us. If you are already an Encore customer, please reach out to your Account Manager or our Client Engagement team at clientservices@encorebusiness.com.


* All pricing is subject to change without notice. Always contact Encore for the most current product pricing.

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