Dynamics GP vs Dynamics 365 Business Central

Both Dynamics GP and Dynamics 365 Business Central are ERPs aimed at small and medium-sized businesses, and are well-suited for managing an organization’s core finances. But there are some key differences that business leaders should be aware of when it comes to licensing, hosting, upgrades/updates, functionality, and AI capabilities.

I’ve been working with clients on GP for over 25 years. And since the release of Business Central I’ve been having conversations with GP customers to help them compare their current solution to the Dynamics 365 alternative, or help them transition when they are ready.

In this article, I’ve included an overview of each solution, a comparison table, and reasons why some GP clients are transitioning to Business Central.

GP vs Business Central Comparison

The key difference between Microsoft Dynamics GP and Microsoft Dynamics 365 Business Central is that GP was built to be on-premise and Business Central was designed for the cloud. However, there is some overlap and a lot more detail to understand.

Let’s start with a quick table comparing them:

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 USD/user/month
($71.25 CAD).
Licensing starts at $70 USD/user/month
($95 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.
AI Capability Built-in generative AI with Copilot.

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

GP and Business Central provide similar functionality for:

  • Bill of Materials
  • eBanking
  • Fixed Assets
  • Intercompany Processing
  • Inventory Tracking
  • Sales Order Processing
  • Project Accounting (now called Jobs)
  • Manufacturing
  • Multiple Currencies
  • Multiple Entities
  • SQL Server Reporting Services

However, one of the most important differences in functionality is Business Central’s dimensional accounting. Dimensions in Dynamics 365 Business Central let you define analysis categories and then “tag” your data so you can quickly review, for instance, travel expenses across several different departments.

Microsoft Dynamics GP Overview

With Microsoft Dynamics GP, you have options in both licensing and hosting:

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 upfront, starting from $5,000 USD for 3 users (or $6,167 CAD). You also pay an annual maintenance fee to Microsoft after that. As of October 1, 2023, customers will typically pay 20% the first year and 18% after that. Subscription licensing avoids that large initial capital expense and the annual maintenance fee.

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 to 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, there are now several third-party payroll apps available. We recommend different solutions and help our clients implement them depending on their specific payroll needs.

Is Microsoft Dynamics GP Going Away?

No, it is not going away. Microsoft has made it clear that it values all its GP customers and isn’t forcing any company to move off of GP. Dynamics GP continues to be a widely used ERP solution.

With the October 2019 release, Microsoft announced that future releases of Dynamics GP will follow the Modern Lifecycle Policy, which is different from the Fixed Lifecycle Policy. The Modern Lifecycle Policy offers support and servicing, including bug fixes, new features, and tax updates, throughout the year.

To stay current, you must be on one of that year’s releases to be eligible to update to the next year’s releases. Our “Top Questions about Dynamics GP Versions” article has sections with more information for about the Modern Lifecycle Policy and which versions of GP are on the Fixed vs Modern Policy.

Microsoft Dynamics 365 Business Central Overview

Dynamics 365 Business Central is a newer financial management software product from Microsoft. 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 was built for the cloud. As such, it is usually licensed on a full “SaaS” model (Software as a Service). You pay monthly subscription licensing and your ERP is hosted in the Azure Cloud. The benefit here 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.) There are also Team licenses. See our Dynamics 365 Business Central Licensing and Pricing post for more information.

For 3rd-party or ISV solutions, Business Central has “apps.” From the user’s perspective, Business Central 3rd-party apps and GP add-ons are roughly equivalent. There is an active ISV community that creates these apps for Business Central, similar to what you are used to in GP. Your Dynamics partner should help you consider which of these apps will best suit your particular business needs and technical situation.

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. You should discuss your options with an experienced Dynamics Partner.

What Are the Benefits of Transitioning from Dynamics GP to Dynamics 365 Business Central in the Cloud?

The main benefits Dynamics GP clients can get by transitioning to Dynamics 365 Business Central in the cloud include:

  • Predictable and flexible cost
  • No more infrastructure management
  • Always on the latest version of the solution
  • 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 and data visualizations
  • Built-in generative AI
  • Be ready for the future

The benefit of 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.

There is also 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.

Overall, with Dynamics 365 Business Central in the cloud, the significant hidden costs of an on-premise solution (which are rarely included in a conventional cost analysis) are taken care of by the licensing.

Two trees above and below ground, to show the significant hidden "root" costs of on-premise as compared to cloud software.

You are 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 costs additional time and expense in Dynamics GP.

Security being managed by the Microsoft team means 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. There is peace of mind that your data will be there when you need it thanks to a 99.9% uptime service level agreement.

Dynamics 365 Business Central in the cloud offers seamless integration with other Microsoft products such as Excel, Outlook, Word, Teams, Power BI and the rest of the Power Platform, and other Dynamics 365 solutions such as Sales or Customer Service.

Being able to work from anywhere, on any device refers to the benefits your workforce receives because Dynamics 365 empowers your team with mobile access to the same tools found in the desktop application versions. The user experience is consistent and secure across all devices and operating systems (Android, iPhone, etc.).

You will also 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 will give you an accurate end-to-end view of your business, letting you spot trends and deliver better customer experiences.

Predictive analytics and data visualizations can help users analyze business data and make informed decisions. You can access, model, and analyze data across multiple dimensions.

By embracing built-in generative AI technology like Copilot with Dynamics 365 Business Central, users can see productivity gains and transform business processes. Companies can also safeguard their data privacy and compliance with Microsoft’s governance tools for responsible use of AI.

Dynamics 365 Business Central will help you be ready for the future, because your system will always be current so you can take advantage of the latest technology.

Encore has helped businesses digitally transform by migrating to the Cloud, empowering them to achieve their goals faster and more connected with Microsoft Dynamics 365 Business Central.

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 consistent with all Microsoft products.

If this is you, you may want to check that you satisfy several of the following conditions:

  • Your organization would like help in developing a cloud strategy for your ERP.
  • Any critical business process for which you currently use an ISV solution has an equivalent 3rd-party Dynamics 365 app available, or the functionality is available out of the box in Business Central. (Ask your Dynamics Partner for help assessing 3rd-party apps.)
  • 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 a fully cloud-enabled solution, meaning you’re always on the current build and you no longer need to do resource-heavy upgrades.
    3. You want faster and more flexible analysis of all your data.
    4. You want to better support remote work, staff mobility, and collaboration.

If you’re interested in transitioning to Dynamics 365 Business Central, please feel free to contact us. We’d love to talk.

GP vs Dynamics 365 Business Central Infographic

See the features gained in Dynamics 365 Business Central and the benefits of a cloud ERP in our New Approach to ERP infographic.

Infographic explaining how a modern, cloud-based ERP can help future-proof your business.

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 25 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. Based on the contract commitment, the per user per month price may differ from the price listed above. Always contact Encore for the most current product pricing.

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