Updates to License Management in Dynamics 365 Finance & Operations

Microsoft is simplifying the way organizations manage licenses for Dynamics 365 Finance & Operations — with enhanced tools that bring greater security, privacy, compliance and transparency to your licensing footprint.

 

Effective license management is essential for maintaining operational control, compliance, and cost efficiency. To ensure a smoother transition to per-user license validation, Microsoft has adjusted the rollout timeline. Validation will now be introduced gradually, aligned with each organization’s contract renewal or anniversary date, supported by new reporting capabilities designed to enhance transparency and simplify license management.

 

Starting in early 2026, new updates will help businesses stay compliant and efficient with less manual effort.

 

 What’s Changing

 

Enhanced Visibility and Reporting

 

Microsoft is enhancing the Power Platform admin center with better license insights. Admins now gain comprehensive visibility into license usage across security roles, enabling smarter, data-driven management of their licensing footprint.

 

Phased Rollout of License Validation

 

Starting January 15, 2026, license validation for Dynamics 365 Finance & Operations applications will begin for customers with contract renewals or anniversaries occurring after that date.

 

This phased approach allows organizations to review user counts and licensing needs ahead of time, make adjustments smoothly with minimal operational impact, and gain clear visibility into the validation timeline, helping administrators plan effectively.

 

Access Restrictions for Unlicensed Users

 

After validation, users without assigned licenses will lose access until licenses are assigned. During this time, they will be prompted to request the appropriate license from their administrator.

 

Preparing for a Smooth Transition

 

To help organizations navigate the upcoming license validation process, it’s important to take proactive steps to ensure a seamless transition.

 

• Understand Licensing Requirements— review how security roles, duties, and privileges map to license types.
• Review User Role & License Mapping— use admin tools to summarize active users and their license requirements.
• Role to License Optimization— identify and remove unnecessary permissions using the License Usage Summary Report.
• Align Licenses in Microsoft 365 Admin Center— ensure user licenses match report mappings and add extra licenses as required.

 

Key Takeaways

 

Preparing for the upcoming license validation doesn’t have to be complex.

 

With the right preparation, organizations can turn this transition into an opportunity to strengthen governance and improve operational efficiency. Our team can help you review your license setup, analyze usage patterns, and optimize your security roles — so you can enter 2026 fully compliant and disruption-free. These steps lay the foundation for smoother administration, clearer visibility, and more effective management of Dynamics 365 Finance & Operations environments.

 

Partner with AXM365

 

Get in touch with AXM365 to schedule a license readiness review and ensure your organization transitions smoothly.

Understanding Key Financial Terms in Microsoft Dynamics 365 Finance and Operations

For Functional Consultants and Financial Professionals

 

If you’re diving into the world of Microsoft Dynamics 365 Finance and Operations (D365 F&O), you’ll quickly encounter a variety of terms and concepts related to accounting and financial management.

 

 

Whether you’re a seasoned consultant or just getting started, it’s essential to have a solid understanding of key financial terms, like the General Ledger, Sub Ledger, General Journal, and Vouchers.

 

These are the building blocks that keep your financial data organized and transparent.

 

 

 

In this blog, we’ll break down these terms in a way that makes sense and helps you understand how they work together in D365 F&O.

 

General Ledger (GL): The Big Picture

 

The General Ledger is the heart of your financial system. Think of it as the primary record of your company’s financial health. It provides a high-level overview of all your company’s accounts, like Accounts Receivable, Accounts Payable, Cash Management, and more.

 

In essence, the GL holds the total balances for all these accounts. It gives you the snapshot of where your business stands financially at any given moment.

 

Whether you’re reviewing your year-end financials or preparing a report for a client, the General Ledger is your go-to source of truth for the overall financial position of the company.

 

Sub Ledger (Subsidiary Ledger): The Details Behind the Numbers

 

While the General Ledger provides the big picture, the Sub Ledger offers the finer details. The sub ledger is where individual transactions are recorded, offering more granularity than what’s available in the GL.

 

For example, in the Accounts Receivable (AR) sub ledger, you’ll see all transactions related to individual customers, like invoices, payments, and credits. Similarly, the Accounts Payable (AP) sub ledger keeps track of every vendor-related transaction, from invoices to payments.

 

In D365 F&O, these sub ledgers play a crucial role in ensuring that every transaction is accurately captured and linked back to the General Ledger. This makes it easy to reconcile and verify the financial data.

 

General Journal: The First Step in Recording Transactions

 

The General Journal is where transactions begin their journey. Whenever a financial transaction occurs, it is first recorded in the general journal before being summarized and posted to the General Ledger.

 

This is typically where you’ll record low-volume, non-repetitive transactions, such as adjustments, accruals, and manual entries. For example, if you’re entering a one-time expense or a journal entry for a payroll adjustment, it will likely go into the General Journal first.

 

After being reviewed and approved, the entries in the general journal are transferred to the General Ledger, where they are grouped with similar transactions.

 

Vouchers: Linking the Dots

 

A Voucher is like a bridge between the sub ledger and the general ledger. When you post transactions from the sub ledger to the GL, they are recorded as vouchers.

 

Vouchers ensure that each transaction is accurately linked and traceable. They act as a reference for detailed transaction information, allowing you to trace the transaction back to its origin in the sub ledger.

 

For example, if you’re looking at an entry in the GL, the voucher allows you to see the original document and details from the AR or AP sub ledger.

 

This is incredibly helpful for tracking and auditing purposes, ensuring that all financial data can be traced back to its source for clarity and verification.

 

Putting It All Together

 

Now that we’ve broken down each term, it’s clear how these financial components work together in D365 F&O:

 

• The General Ledger (GL) gives you the overall financial position.
• The Sub Ledgers provide specific transaction details within each major account (AR, AP, etc.).
• The General Journal is the starting point for entering low-volume transactions.
• Vouchers tie everything together by linking sub ledger transactions to the General Ledger.

 

Each of these components plays a crucial role in maintaining an organized, accurate, and auditable financial system. Understanding how they interact will help you navigate the complexities of D365FO more effectively, ensuring that your financial data is always in order.

 

Final Thoughts

 

As a consultant or financial professional working with Microsoft Dynamics 365 Finance and Operations, mastering these key financial terms will help you communicate more effectively with clients, navigate the system with ease, and ensure that financial records are always accurate and complete.

 

Whether you’re managing accounts, reviewing financial reports, or troubleshooting issues, having a solid grasp of the General Ledger, Sub Ledgers, General Journal, and Vouchers will set you up for success.

 

Location Blocking Causes Policy

Managing warehouse locations efficiently is crucial for smooth warehouse operations. Sometimes, the warehouse managers may decide that some of the locations must be temporarily blocked for inbound or outbound work operations.

 

The reasons can vary, ranging from maintenance and quality issues to utilization of the empty space.

 

In Dynamics 365 Finance & Operations (D365 F&O) versions prior to 10.0.40, there were multiple options for blocking locations, but none were straightforward or easy to use. The process often required a combination of multiple tools.

 

Starting from version 10.0.40, Microsoft introduced changes to the process. With the update, there’s a new policy feature that enhances how blocking causes are applied called Location blocking causes policy.

 

When using the blocking causes fields (Input blocked and Output blocked) on locations, a new Blocking cause policy needs to be assigned, one that determines if the blocking cause will be used when processing warehouse work or not. The policy not only visually informs the workers, but also blocks the location and prevents the system from processing work.

 

 

If the policy is set to Do not use for warehouse work, the locations blocked for this reason will not be blocked during warehouse work processing.

 

This means that the system will be able to assign this location when using the location directives and other rules from the setup.

 

However, if the policy is set to Also use for warehouse work, the associated locations for this blocking cause will also be blocked during warehouse work processing.

 

The second option is useful for preventing the system to create inbound put away work at the assigned location during the inbound receiving process.

 

A Big Step Forward for the Macedonian Food Giant: Vitaminka with a Successful Full Implementation of Dynamics 365 Finance and Operations

With the successful implementation of Dynamics 365 Finance and Operations, the Macedonian food giant opened the doors to full technological improvement and digitalization of the business.

 

Founded more than 66 years ago, Vitaminka is synonymous with quality, a company that cares to always satisfy the taste of its consumers, known for its audacity in introducing innovations and following innovation trends.

 

To make a big step forward in its operational efficiency, modernization of its operations, management, and implementation of best practices, Vitaminka decided to invest in the latest technologies, and as its partner in this significant step towards complete technological transformation chose Axapta Masters.

 

 

By joining forces, after an intensive period of work and cooperation, in January 2024 the implementation of D365 F&O was successfully completed. Today, Vitaminka has a fully integrated platform that unites the warehouse, production, and financial aspects of their work.

 

D365 F&O offers a fully integrated system, which allows companies complete control and visibility of all aspects of business operations.

 

Benefits of the Implementation

 

• Increased Efficiency: The system enables a significant improvement in operational efficiency, which will lead to a reduction in the time required to carry out certain activities and a reduction in costs.

 

• Accurate and Fast Financial Reports: The implementation of D365 F&O allows the generation of accurate financial reports in real time, which significantly improves the management of finances.

 

• Improvement of Warehouse Operations and Production Process: The system provides efficient management of the warehouse operation and production processes, which enables better control and monitoring of the real situation in the warehouse and production.

 

• Better User Experience and Growth Opportunities: D365 F&O will improve and facilitate the work process of teams in the company. The system is designed to adapt to the needs of companies, making it an ideal choice for businesses that are constantly growing and investing in innovation.

 

Dynamics 365 Finance and Operations is much more than just a sophisticated system. D365 F&O is the key to successful operations management and business growth in today’s digital age.

 

Therefore, with the successful implementation, Vitaminka remains a leader in its industry with innovative and technologically advanced solutions. This significant transformation will provide the company with not only an economic advantage, but also financial stability in the long term.

 

With Axapta Masters on its side, Vitaminka opened the way to new successes and heights in its successful Macedonian business story.

The Concept Behind Financial Dimensions and How to Make the Correct Setup

At the beginning of the new year, most companies perform year-end closing activities that close the fiscal year and bring out the profitability, losses, strengths, and weaknesses of the past year.

 

Usually, all of this can be seen through financial reports, but the depths of these reports can lead to inaccurate decisions due to the lack of information in the financial transactions.

 

 

Financial dimensions are standard feature in D365 that are based on strategic decisions and are used to get meaningful information from the transactions posted. This means that the transaction without the financial dimension will consist of the main account, amount, and date, but when the financial dimensions are added, then from the same transaction can be seen the business unit, division, and department.

 

This can provide the profitability of each location in the business. If the profit and cost center is added, then it can be easily concluded each expense or revenue from which stream comes from.

 

Another scenario is to add the fixed asset number, bank, customer, or vendor, that connects to the master data, and it is connected automatically (the main account from accounts receivable can now provide the information on which customer has ordered the most).

 

All these examples are standard in D365. However, based on the needs of the business, custom dimensions can be added and used in the same principle as the standard ones.

 

The Setup of the financial dimensions consists of several steps.

 

1. Create a Financial Dimension

 

Go to General ledger > Chart of accounts > Dimensions > Financial dimensions

 

 

Updates to a dimension will not take effect until dimension activation is run. The activation of dimensions is only allowed when the system is in maintenance mode. Maintenance mode can be enabled in this environment by running a maintenance job from LCS, or using Deployment Setup tool locally.

 

Ones the dimension has been created, the values of the dimension can be added through 

 

2. Financial Dimensions in the Account Structures

 

Go to General Ledger → Chart of accounts → Structures → Configure account structures

 

 

 

One legal entity can have several account structures and the segments in the accounts are the financial dimension. The account structures create rules for which financial dimensions can be used in which accounts. The account structures can be quite simple or very complex depending on the business’s strategic decisions.

 

Once the account structure has been activated, the financial dimensions can be seen on the master data such as main accounts, customers, vendors, items, and other. For example, look at the customer bellow:

 

 

One important step is to include the account structure in the ledger of the company. With this step, the setup of the account structure is complete.

 

 

3. Financial Dimension Configuration

 

Go to General ledger > Chart of accounts > Dimensions > Financial dimensions for integrating applications

 

 

This is often neglected, but it is a very important step in D365, especially if using the Excel add in which is an excellent tool.  The usual formats are:

 

• Default dimensions format: used for importing default dimensions using Data management and Excel for master data and transactional data

 

• Ledger dimensions format: used for importing ledger dimensions using data management and Excel for general ledger journals.

 

• Budget register dimension format: used to determine the required dimensions when importing budget register entries using Excel or Data management.

 

• Budget planning dimension format: used to determine the required dimensions when importing budget planning entries using Excel or Data management.

 

The order of the financial dimension in all of these entities is crucial and it should be the same as the order of the financial dimensions in the account structure.

 

4. Financial Dimension Sets

 

Go to General ledger > Chart of accounts > Dimensions > Financial dimension sets

 

 

The sets are a powerful tool and can be used to generate the trial balance and to get the reports needed for statistical purposes.

 

 

5. Dimension Templates

 

Go to General ledger > Chart of accounts > Dimensions > Financial dimension default templates

 

 

Templates can be created and then applied as needed to aid in the distribution of the posting to multiple combinations of dimensions.

 

6. How Financial Transactions are Filled with Financial Dimensions

 

There is a pyramid of how the financial dimensions are going to the last part of their journey and to the financial reports.

 

 

The master data is connected to different financial dimensions that are transferred to the transactional data. While the transactional data is being processed, different vouchers are posted from it.

 

The default financial dimensions from this customer will be copied on each sales order created for it. The vouchers posted from the sales order will contain the same financial dimensions as the sales order.

 

For example, the default financial dimensions from the customer and item will be copied on each sales order created with them. The vouchers posted from the sales order will contain the same financial dimensions as the sales order.  At the year-end closing, these vouchers are then used in reports.

The First Features Release Wave for 2021 Is Here – Dynamics 365

Brace yourselves, the first release wave for 2021 is here and it has some cool features. The newest release wave describes the new features releasing from April until September this year, and the first sneak peek can be accessed today.

 

The features are going to cover a broad range of functional areas, which we summarized it in a few points, and for the details, you can read more in the release plan online. Be prepared to take the chance, test, and validate all the new features and capabilities that will be a part of the 2021 release, before they are live for your users.

 

Finance and Operations

 

Dynamics 365 Finance

 

Dynamics 365 Finance continues with the lead in bringing in intelligence and automation to the users. With this release users experience out-of-the-box machine learning for their different financial operations.

 

Also, this release in core finance is focused on incorporating capabilities into the cash flow forecast and continuous enhancements across all financial areas.

 

Dynamics 365 Supply Chain Management

 

Dynamics 365 Supply Chain Management is expanding the inventory and logistic scenarios for chain management increasing transparency and efficiency for Asset Management users. Another thing is that it’ll help in reducing training time and cost, and increasing productivity of warehouse workers with a fresh, user-friendly mobile application.

 

Dynamics 365 Project Operations

 

Dynamics 365 Project Operations in the 2021 release wave 1, Microsoft will deliver functionally rich experiences in several areas such as the ability to forecast, use, and invoice nonstock materials on projects.

 

It will enable the ability to set up contractual commitments like billing methods and chargeability rules by the task or a work breakdown schedule element, and it will enable customers using the Dynamics 365 Project Service Automation application to upgrade to Project Operations.

 

Dynamics 365 Guides

 

Dynamics 365 Guides is a mixed-reality application that displays step-by-step holographic instructions right where the work happens, enabling employees to quickly learn and execute complex tasks.

 

In this release wave, the Dynamics 365 Guides team is focusing on intelligent workflows. Additionally, new entities for completion time will enable customers to build Power Automate flows that support their unique enterprise needs.

 

Commerce

 

As we mentioned in one of our previous blog posts, this year Microsoft has big plans for commerce, especially by introducing cloud for retail. Besides that, commerce expands the native integrations with Bing for Commerce search for product search, as well as Customer Service and Power Virtual Agents.

 

Human Resources

 

Through integration APIs and strategic partnership Dynamics 365 Human Resources continues to broaden the human capital, providing a better employee experience with a consolidated view of benefits for employees.

 

Sales

 

On the other hand, Dynamics 365 for Sales is focused on adding productivity enhancement for sellers, helping them in the decision-making process by providing data-driven insights. The updates will tackle automation, conversation intelligence, and enhancement to the mobile dashboard for a better experience for sellers on the go.

 

Dynamics 365 Customer Insights

 

The audience insights will enable every company better understanding of the customer data by adding customization and extensibility capabilities of the customer view, additional connectors for data ingestion, better controls for AI-based unification, and much more.

 

Besides that, the engagement insights capabilities will enable individual and holistic analytics over different device usage.

 

Customer Voice

 

Will take the customer’s feedback on a whole another level, by expanding the capabilities to collect feedback with a lot of different customized survey options. Additionally, creating follow-up action workflows will be much easier with the Power survey response trigger.

 

Service

 

With the all-in-one contact center, the Dynamics 365 Customer Service will ship with a logistic and integrated first-party voice and chat solution, which will enable customers to be up and running quickly.

 

Marketing

 

The improvements in Dynamics 365 for Marketing definitely are going to enhance marketer’s reach, analysis and with the help of AI, are going to deliver deeper personalization and different channels for customer engagement.

 

SMB

 

Dynamics 365 Business Central with the new features will simplify and improve the way Microsoft Partners administer tenants, and how the managing of licensing and permissions is done. The integration will also include Microsoft Teams and Visual Studio Code, which will help in providing modern development tools.

 

Check all the key dates for the 2021 release wave 1 here.

 

If you are interested in optimizing/improving your business processes, making the experience while using the application a whole lot easier in the long run, having the data secured in the cloud at the same time, and in need for someone to upgrade your systems from Microsoft Dynamics AX to Dynamics 365, we are open for future collaboration. Reach out to us here.

 

And if you are interested in potential career opportunities, check out our careers page.

Data Upgrade from Microsoft Dynamics AX2012 R2 / AX2012 R3 to Dynamics 365 for Finance and Operations

Upgrading Microsoft Dynamics AX2012 to Dynamics 365 Finance and Operations brings the digital transformation in most companies by giving them the ability to use significant new features and capabilities.

 

Recently, we have added another successfully completed data upgrade project for one of our clients in our portfolio. If you are looking for some help while upgrading from AX2012 R2 or Ax 2012 R3 to Dynamics 365 then you are at the right place.

 

This process contains several phases:

 

• Preparing the database in the AX2012 environment
• Installing a deployable package on the D365 development environment
• Migrating upgraded database from D365 one-box to sandbox environment

 

 

 

AX2012 Procedure

 

The process starts in the AX 2012 environment where you have to prepare the ax2012 database for upgrading to Dynamics 365. Microsoft has put together a pre-upgrade checklist that has to be installed in Dynamics AX 2012. The checklist ensures you have updated information in your database for the AX 2012 to D365 upgrade.

 

• If upgrading from AX 2012 R3, install KB 4035163
• If upgrading from AX 2012 R2, install KB 4048614

 

After the installation of the hotfix, run the sysCheckList classes to prepare the database. After executing the process in the AX2012 environment we must make a backup from this database and transfer it to the D365 development environment. For transferring databases between environments, we will use Microsoft Azure Storage.

 

D365 Procedure

 

Most of the errors must be resolved in this process while installing the data upgrade deployable package.

 

The process on D365 development environment is following:

 

1. Restore and rename the database.
2. Install deployable package.
3. Made another back up from this database and restore it to prepare it for Tier2 environment.
4. Export a bacpac file for transferring

 

 

Restore the Database

 

After restoring the database on D365 environment we need to rename the names of the databases. Rename the original AxDB to AxDB_Orig and then rename the newly restored database to AxDB.

 

Install a Deployable Package

 

Download data upgrade deployable package from Shared asset library from Software deployable package, find the data upgrade package that corresponds to your upgrade.

 

If you’re upgrading from AX 2012, the package name starts with AX2012DataUpgrade-x-x-x where x-x-x is the application release. Select the package that corresponds to the release you are upgrading to. After downloading extract it and install it.

 

Make a Back-up to Prepare the Database for Tier 2

 

After the installation of the deployable package completes, we need to make back up from this database and restore it again in this environment. We will do this because we will delete some objects from it to prepare for the sandbox environment.

 

Do the following steps in SQL management studio against the newly imported database:

 

• Update sysglobalconfiguration table

 

• Drop procedure XU_DisableEnableNonClusteredIndexes and drop following users: axdbadmin, axdeployuser, axmrruntimeuser, axretaildatasyncuser, axretailruntimeuser

 

• remove NT users as these are not supported in Azure SQL Database

 

• remove any AX 2012 RTM model store procedures that still exist

 

• If you receive a message that you cannot delete users because they own a schema, then check which schema the user owns. Either change the ownership to another user (for example to do) or drop the schema if it does not contain any objects.

 

• drop all views in the current database because some refresh the tempDB, which is not a supported action in Azure SQL Databases

 

• Drop MaintainShipCarrierRole procedure because it contains a tempDB reference that is not supported in Azure SQL Database

 

• Export a bacpac file for transferring 

 

After all this, the last step on the development environment is to export a bacpac file that should be imported in a sandbox environment. Go to the following location and execute the following command for exporting the file

 

A Process on the D365 Sandbox Environment

 

After transferring the database, we need to do the following steps:

 

• Import the database;
• Create users and prepare the database;
• Rename the database;
• Full database synchronization.

 

Import the Database

 

Import the database into the sandbox environment.

 

Create Users on the Newly Imported Database

 

Create users that were dropped in the preparation procedure. The passwords for the users must be copied from the LCS from the environment where we are importing the database. After users are created, alter the database with the required configuration.

 

Rename the Database

 

Full Database Synchronization  

 

Run full database synchronization and after it completes successfully you are ready to use the environment.

 

If you are interested in optimizing/improving your business processes, making the experience while using the application a whole lot easier in the long run, having the data secured in the cloud at the same time, and in need for someone to upgrade your systems from Microsoft Dynamics AX to Dynamics 365, we are open for future collaboration.

 

Reach out to us here, and if you are interested in potential career opportunities, check out our careers page.