Business Central Overview

Business Central as a Connected Business System

Business Central is built on the idea that different parts of a business should work together, not separately.

Finance, sales, purchasing, inventory, and operations all use the same system and the same data. This means information entered in one place is automatically available everywhere it is needed.

Instead of managing accounting in one tool, inventory in spreadsheets, and sales in another system, Business Central brings everything into a single workflow. This reduces repeated work, avoids mistakes, and helps businesses make decisions using accurate and consistent information.

How Data Flows Inside Business Central

One of the most important aspects of Business Central is how data flows across the system.

When a transaction is created in one area, it automatically affects related areas. For example:
• A sales transaction affects customer data, inventory, and financial records
• A purchase transaction updates vendor balances, stock levels, and accounting entries
• Inventory movements are reflected in both operations and financial reports

This shared data flow ensures that all departments see the same information at the same time.

Business Central Modules Working Together

Business Central is organized into functional areas often referred to as modules. While each module has a specific purpose, none of them work independently.

Navision was a popular ERP system originally developed in Denmark and later acquired by Microsoft. For many years, it was widely used by small and mid-sized businesses to manage accounting, inventory, sales, and operations, mainly through on-premise installations (software installed and run on a company’s own local servers and computers rather than on the cloud) .

As business needs changed and cloud technology became more important, Microsoft modernized Dynamics NAV and rebranded it as Dynamics 365 Business Central . This transition allowed Microsoft to move from a traditional on-premise ERP system to a modern, cloud-ready solution.

Key modules include:
• Financial management
• Sales and customer management
• Purchasing and vendor management
• Inventory and supply chain
• Operations and projects
• Reporting and analytics

What makes Business Central powerful is not the individual modules, but how they interact within one system.

Central Role of Financial Management

Financial management acts as the core of Business Central. Almost every business activity eventually impacts financial records.

Sales, purchasing, inventory movements, and operational costs are all reflected in financial accounts automatically. This means financial reports are always aligned with actual business activity, without the need for manual adjustments.

This tight integration helps businesses maintain accurate books and gain better financial visibility.

Sales, Purchasing, and Inventory in One Flow

In Business Central, sales, purchasing, and inventory are closely connected.

• Sales activities depend on inventory availability
• Purchasing decisions are influenced by demand and stock levels
• Inventory valuation impacts financial reporting

By managing these areas together, businesses can respond faster to customer needs while maintaining control over costs and stock.

For businesses that operate on projects or provide services, Business Central provides visibility into operational performance.

Projects can be tracked in terms of:

• Costs
• Resources
• Time
• Profitability

This allows businesses to understand not just revenue, but how efficiently work is being performed.

Business Central includes built-in reporting tools that provide insight into both operational and financial performance.

Reports and dashboards allow businesses to:

• Monitor daily activities
• Track trends over time
• Identify issues early
• Support better decision-making

Because reports are based on live system data, they reflect the current state of the business.

Business Central supports both cloud and on-premise deployments.

• The cloud version is hosted by Microsoft and provides automatic updates and easy access.
• The on-premise version is installed on local servers, giving organizations more control over infrastructure and updates.

Both options use the same core system, allowing businesses to choose based on their technical and compliance needs.

Business Central is used by different teams across an organization, each focusing on their own responsibilities while sharing the same system.

• Finance teams focus on recording (posting) financial transactions such as sales invoices, purchase invoices, payments, and adjustments, reconciling accounts, and preparing financial reports.
• Sales teams manage customers, orders, and invoices
• Purchasing teams handle vendors and procurement, meaning they choose suppliers, place orders for goods or services, and make sure purchases are completed correctly and on time.
• Operations teams monitor inventory and projects
• Management uses reports and dashboards to oversee performance

This shared usage improves collaboration and reduces data silos.

Business Central is part of the broader Microsoft Dynamics 365 ecosystem.It integrates with tools such as:

• Excel for data analysis
• Outlook for customer communication
• Teams for collaboration
• Power BI for advanced reporting
• Power Automate for workflow automation

These integrations allow businesses to extend Business Central without replacing existing Microsoft tools.

How Business Central Manages a Business Flow (Simple Example)

Business Central manages business activities by following clear, connected flows. Each flow starts with basic information and then moves step by step until the final result is recorded.

Example: A Simple Sales Flow in Business Central

To sell something in Business Central, certain basic information must already exist in the system.

First, a customer is created. This stores details such as the customer’s name, address, payment terms, and credit limits. Next, a sales order is created. A sales order represents what the customer wants to buy. Inside the sales order, sales lines are added to specify items or services, quantities, and prices. When the business is ready to deliver the goods, the order can be shipped. Shipping reduces inventory quantities and confirms that items have been sent to the customer.

After shipping, the order can be invoiced. Invoicing records the sale financially. At this stage:

• The customer balance is updated
• Revenue is recorded
• Inventory value is adjusted
• Financial reports reflect the transaction

In some cases, shipping and invoicing can happen together, while in others they happen separately. Posting the sales order ensures that the transaction is officially recorded across inventory and finance.

All these steps are handled within Business Central using the same data, without repeating information in multiple systems.

How Other Business Areas Follow Similar Flows

Business Central manages all major business areas using similar connected flows.

• Purchasing flow starts with vendors, then purchase orders, receipt of goods, and vendor invoices, updating inventory and financial records.
• Inventory flow tracks how items move in and out of stock and how inventory value changes.
• Warehouse flow manages picking, packing, and shipping processes.
• Production flow handles manufacturing activities such as consuming materials and producing finished goods.
• Service flow manages service orders, service items, and customer support activities.
• Finance flow records and summarizes all business transactions into accounts and reports.

Because all these flows are connected, nothing is missed. Every business activity is properly tracked, recorded, and reflected in reports.

Why This Flow-Based Approach Matters

This flow-based design ensures that:

• Business processes are consistent
• Data is not duplicated
• Inventory, finance, and operations stay aligned
• Businesses do not need separate systems for each department

Business Central acts as a single system that manages the entire business lifecycle.

Summary

Business Central is more than a collection of business features. It is a connected system designed to manage business operations as a whole.

This overview shows how Business Central brings data, processes, and teams together into one platform, helping businesses operate efficiently and make informed decisions. To understand how Business Central handles sales, purchasing, inventory, finance, and other business flows in more detail, continue to the next section:
Understanding BC | Business Central, where these processes are explained step by step.