Business Central Glossary - 50 BC Terms Explained (2026)

Business Central Glossary — 50 Essential BC Terms

This glossary defines the 50 most important Microsoft Dynamics 365 Business Central terms every BC user, consultant, developer, and decision-maker should understand. Each term is explained in 2-3 sentences with context — designed for clarity and easy reference.

Organized into 8 categories: General BC, Financial Management, Sales & Purchase, Inventory & Warehouse, Manufacturing, Development (AL), Power BI & Analytics, and Licensing & Deployment.

Looking for a specific term? Use Ctrl+F (Cmd+F on Mac) to search this page.

1. General Business Central Terms

Business Central

Microsoft Dynamics 365 Business Central is a cloud-based Enterprise Resource Planning (ERP) system from Microsoft, designed for small and mid-sized businesses (10-500 employees). It manages financials, sales, purchases, inventory, manufacturing, projects, and service in a single integrated platform. Business Central is the modern successor to Microsoft Dynamics NAV (Navision).

Dynamics 365

Dynamics 365 is Microsoft’s family of cloud-based business applications including Business Central (ERP for SMB), Finance (ERP for Enterprise), Sales (CRM), Customer Service, Field Service, and several others. Business Central is one specific product within the Dynamics 365 family, targeting small-to-mid-sized businesses.

Tenant

A tenant is your dedicated, isolated Business Central environment in Microsoft’s cloud. Each customer organization gets its own tenant with its own data, users, and configurations. Tenants are identified by a unique Tenant ID (a GUID) and are accessed via URLs like businesscentral.dynamics.com/[tenant-id].

Environment

An environment is an instance of Business Central within a tenant — either Production (live data) or Sandbox (for testing). Most customers have one Production environment and one or more Sandbox environments for testing extensions, training users, or piloting changes before deploying to Production.

Role Center

A Role Center is the customized home page in Business Central that displays based on the user’s role (e.g., Accountant, Sales Manager, Warehouse Worker). It shows KPIs, action shortcuts, and relevant data for that role. Microsoft provides 50+ standard Role Centers; custom ones can be built for specific company workflows.

Company

A Company in Business Central represents a legal entity or business unit with its own chart of accounts, customers, vendors, and transactions. A single Business Central tenant can hold multiple Companies — useful for multi-entity businesses, holdings, or multi-country operations. Users can switch between Companies via the company selector.

Tell Me

Tell Me is Business Central’s search feature (the magnifying glass icon at the top of the screen). It lets users search for pages, reports, actions, or data — for example, typing “Customers” jumps directly to the Customer List page. Tell Me is the primary navigation mechanism in modern Business Central.

2. Financial Management Terms

General Ledger (GL)

The General Ledger is the master financial record containing all of a company’s accounting transactions, organized by account. The Chart of Accounts (G/L Account list) defines which accounts exist. Every posted transaction in Business Central (sales, purchase, payment, etc.) generates one or more G/L Entries.

Chart of Accounts

The Chart of Accounts is the structured list of all financial accounts (assets, liabilities, equity, income, expenses) used to record transactions. In Business Central, you can copy from Microsoft templates or import your existing Chart of Accounts. Each account has a Number, Name, Account Type, and Account Category.

Posting Groups

Posting Groups are configuration sets in Business Central that determine WHICH G/L accounts get hit when transactions are posted. For example, the Customer Posting Group determines which Accounts Receivable account is updated when a sales invoice posts. Misconfigured Posting Groups are the #1 cause of incorrect financial postings in Business Central.

Dimensions

Dimensions are labels or tags you attach to transactions for advanced reporting (e.g., Department, Project, Region, Cost Center). Business Central supports two Global Dimensions (used for fast filtering) and unlimited Shortcut Dimensions. Once transactions are posted, you can analyze profitability or cost by Dimension combinations.

Accounts Receivable (AR)

Accounts Receivable is the money owed to your business by customers for goods or services delivered but not yet paid. In Business Central, AR is tracked via Customer Ledger Entries — each unpaid invoice is an open entry. Aging reports (AR 30/60/90 days) categorize receivables by how long they’ve been outstanding.

Accounts Payable (AP)

Accounts Payable is the money your business owes to vendors for goods or services received but not yet paid. AP is tracked via Vendor Ledger Entries. Standard reports include AP aging, vendor balance, and payment journals for processing payments.

Multi-Currency

Business Central supports unlimited currencies. Each Company has a Local Currency (LCY) — typically your home country’s currency. Foreign currency transactions are tracked in both the transaction currency and LCY using exchange rates. Currency revaluation is automated for month-end financial close.

3. Sales & Purchase Terms

Sales Quote

A Sales Quote is a non-binding price estimate sent to a prospective customer. Quotes can be converted to Sales Orders when the customer accepts. Quotes don’t affect inventory or financials until converted. They’re the first step in the standard Quote → Order → Shipment → Invoice → Payment sales workflow.

Sales Order

A Sales Order is a confirmed commitment to sell goods or services to a customer at agreed terms. Sales Orders reserve inventory, can be partially shipped, and become the basis for shipments and invoices. They’re the central document in Business Central’s sales process.

Purchase Order (PO)

A Purchase Order is a confirmed request to purchase goods or services from a vendor. POs establish quantity, price, delivery date, and terms before goods arrive. Once received and invoiced, the PO posting updates inventory + accounts payable simultaneously.

Receipt

A Receipt records the physical arrival of goods or services from a vendor — the receiving event in a Purchase Order’s lifecycle. Receipts update inventory quantities but don’t create financial entries until the invoice is posted (which separates physical receipt from financial recognition).

Item

An Item in Business Central represents anything you buy, sell, hold in stock, or manufacture — products, services, raw materials, finished goods. Each item has a Number, Description, Unit of Measure, Costing Method, and various tracking attributes. Items are the foundation of inventory, sales, and purchase processes.

4. Inventory & Warehouse Terms

Item Ledger Entry

An Item Ledger Entry is a permanent record of every inventory movement — purchase receipt, sale shipment, transfer, adjustment, or production output. Each entry has a date, item, location, quantity, and cost. The Item Ledger is the source of truth for inventory quantity on hand at any point in time.

Costing Method

Costing Method determines how Business Central values inventory. The five methods are FIFO (First-In-First-Out), LIFO (Last-In-First-Out), Average, Specific, and Standard. FIFO is most common globally. The Costing Method is set per item and CANNOT be changed once transactions exist — choose carefully during setup.

Location

A Location is a physical or logical place where inventory is stored — a warehouse, store, or stocking area. Each location has its own inventory quantities for each item. Multi-Location is the basic Premium feature; Multi-Bin (storage within a warehouse) is the Advanced Warehouse feature.

Bin

A Bin is a specific storage location within a Location (e.g., aisle, shelf, slot). Bins are part of Advanced Warehouse functionality (Premium tier). Bin-level tracking is essential for businesses with large warehouses, multiple SKUs, or first-in/first-out picking requirements.

Warehouse Pick

A Warehouse Pick is the document that instructs warehouse workers which items to retrieve from which Bins to fulfill a Sales Order, Production Order, or Transfer Order. Picks optimize warehouse workflow and ensure inventory accuracy. They’re part of Advanced Warehouse (Premium tier).

5. Manufacturing Terms (Premium-Only)

Bill of Materials (BOM)

A Bill of Materials is the list of components, sub-assemblies, and raw materials required to manufacture a finished product. BOMs in Business Central specify item quantities and Routing operations. A finished good’s BOM might have 10-1,000+ components depending on complexity. BOMs are Premium-tier functionality.

Production Order

A Production Order is the document that authorizes the manufacturing of a specific quantity of a finished good. It specifies the BOM, Routing, quantity, due date, and resource assignments. Production Orders generate Component Picks, machine schedules, and ultimately Item Ledger Entries when finished goods are output.

Routing

A Routing defines the sequence of operations (steps) required to manufacture an item, along with the work centers, setup times, and run times. For example, manufacturing a wooden table might have a Routing: Cut → Sand → Assemble → Paint → Pack. Routings drive capacity planning and standard cost calculations.

Material Requirements Planning (MRP)

MRP is Business Central’s automated process that calculates what to buy, when to buy, what to manufacture, and when to manufacture — based on demand forecasts, sales orders, and current inventory. MRP generates Planning Worksheet suggestions that planners review and convert to Purchase or Production Orders.

Work Center

A Work Center represents a manufacturing resource — typically a machine, group of machines, or labor pool. Work Centers have capacity (hours per day), efficiency, and cost rates. Routings assign operations to specific Work Centers for scheduling and costing purposes.

6. Development (AL) Terms

AL Language

AL (Application Language) is Microsoft’s proprietary programming language designed specifically for developing extensions for Business Central. It replaced the older C/AL language in 2018. AL is purpose-built for business application development, with native concepts for tables, pages, codeunits, reports, and APIs. Learn more in our AL Development Beginner’s Guide.

Extension

An Extension is a self-contained package of customizations (tables, pages, codeunits, etc.) that extends Business Central without modifying the base application. Extensions are the ONLY supported customization method for Business Central SaaS (cloud). Extensions are packaged as .app files and deployed via the Extension Management page.

Table

A Table in AL is a database table that stores business data — like Customers, Items, or G/L Entries. Custom tables (in the 50000-99999 ID range) are created in extensions to add company-specific data structures. Each table has Fields, Keys, and Triggers.

Page

A Page in AL is a user interface object that displays data from one or more Tables. Page types include List, Card, Document, Worksheet, Role Center, and API pages. Pages are how users interact with Business Central — every screen you see is a Page.

Codeunit

A Codeunit is a container for AL procedures (functions/methods) implementing business logic. Codeunits don’t have a UI but are called by Tables, Pages, Reports, or other Codeunits. They’re the foundation of reusable, testable business logic in AL development.

Event Subscriber

An Event Subscriber is an AL function that runs when a specific Business Central event occurs — for example, “OnAfterPostSalesInvoice” or “OnBeforeInsertCustomer.” Event Subscribers are the modern, cloud-compatible way to extend BC behavior without modifying base objects. They’re essential for any AL extension touching standard processes.

C/AL (legacy)

C/AL is the legacy programming language used in NAV 2009-2018 and pre-cloud Business Central. It’s being phased out — all new Business Central development uses AL. C/AL code MUST be converted to AL extensions for migration to Business Central SaaS.

AppSource

AppSource is Microsoft’s marketplace for Business Central extensions (apps), available at appsource.microsoft.com. Verified Microsoft Partners publish extensions there for customers to discover, evaluate, and install. AppSource extensions go through Microsoft’s certification process for security and quality.

7. Power BI & Analytics Terms

Power BI

Power BI is Microsoft’s business intelligence and data visualization platform. It connects to Business Central via native connectors and OData feeds, allowing creation of dashboards, reports, and interactive visualizations. Power BI is the standard analytics tool for Business Central data. Learn more in our Power BI Integration with BC guide.

DAX

DAX (Data Analysis Expressions) is Power BI’s formula language for creating calculated columns, measures, and tables. DAX is similar to Excel formulas but more powerful — supporting time intelligence, complex filtering, and table manipulation. Common DAX functions include CALCULATE, SUM, FILTER, TOTALYTD, and DATESYTD.

OData Feed

OData (Open Data Protocol) is the web service standard that exposes Business Central data tables as REST APIs. Power BI, Excel, and external systems use OData feeds to read BC data without direct database access. Each BC Page can be exposed as an OData feed via the Web Services configuration.

Measure

A Measure in Power BI is a calculation evaluated at query time based on the current filter context — for example, “Total Sales YTD” or “Average Order Value.” Measures are more efficient than calculated columns and adapt automatically to user selections in the report.

8. Licensing & Deployment Terms

Essentials

Essentials is the standard Business Central license tier covering Financial Management, Sales, Purchase, Inventory, Project Management, and basic Warehouse. Priced at approximately ₹6,000 per user per month in India ($70 USD). Suitable for most SMB scenarios — services, distribution, retail, professional services. See our BC Licensing Comparison for details.

Premium

Premium is the advanced Business Central license tier that adds Manufacturing (BOMs, Production Orders, MRP) and Service Management to everything Essentials includes. Priced at approximately ₹8,500 per user per month in India ($100 USD). Required for any user touching manufacturing or field service workflows.

Team Member

Team Member is the limited-access Business Central license at approximately ₹650 per user per month ($8 USD). Team Members can read all data, approve workflows, enter timesheets and expense reports, and access reports — but cannot create invoices, post journal entries, or modify financial data.

SaaS (Software as a Service)

Business Central SaaS is the cloud version hosted entirely by Microsoft on Azure. Customers access BC via web browser or mobile app — no servers required. SaaS is Microsoft’s strategic direction with continuous updates, Copilot AI, and the lowest TCO option. Contrast with On-Premise BC.

On-Premise

Business Central On-Premise (also called On-Prem) is the legacy deployment where customers install and manage BC on their own servers (SQL Server + Windows Server). Still supported but receives fewer new features than SaaS. Most new BC deployments choose SaaS. See our Migration Checklist On-Prem to SaaS.

CSP (Cloud Solution Provider)

CSP is Microsoft’s authorized partner program for selling cloud licenses including Business Central. Customers typically buy BC licenses through a CSP partner — not directly from Microsoft. CSP partners provide license provisioning, billing, deployment support, and ongoing assistance. Choosing the right CSP is critical for long-term success.

Cloud Migration Tool

The Cloud Migration Tool is Microsoft’s free utility for migrating data from on-premise Business Central or Dynamics NAV to Business Central SaaS. It replicates SQL database tables to Azure, validates data, and orchestrates the cutover. The tool requires NAV 2015 or later as source.

Copilot

Microsoft Copilot in Business Central is the generative AI assistant that helps with tasks like product description generation, sales line suggestions, bank reconciliation matching, and natural language queries. Copilot is built into Business Central SaaS — no separate license required for basic features.

MB-800 Certification

MB-800 is Microsoft’s Certified: Dynamics 365 Business Central Functional Consultant Associate exam — the primary certification for BC functional consultants. The exam costs $165 USD and covers configuration, setup, and core module functionality. Learn more in our BC Certifications 2026 guide.

MB-820 Certification

MB-820 is Microsoft’s Certified: Dynamics 365 Business Central Developer Associate exam — the technical counterpart to MB-800. It covers AL Language, extension development, integrations, and performance optimization. The exam costs $165 USD and is the gold standard credential for BC developers.

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Related Learning Resources

Frequently Asked Questions

What is Microsoft Dynamics 365 Business Central?

What is AL Language?

What is a Posting Group in Business Central?

Posting Groups are configuration sets in Business Central that determine which G/L accounts get hit when transactions are posted. For example, the Customer Posting Group determines which Accounts Receivable account is updated when a sales invoice posts. Misconfigured Posting Groups are the #1 cause of incorrect financial postings in BC.

What is the difference between Essentials and Premium?

Essentials covers financial management, sales, purchases, inventory, projects, and basic warehouse functions for approximately 6,000 INR per user per month. Premium adds Manufacturing (BOMs, Production Orders, MRP) and Service Management for approximately 8,500 INR per user per month. Premium is required only if your business does manufacturing or provides field service.

What is a Business Central tenant?

A tenant is your dedicated, isolated Business Central environment in Microsoft’s cloud. Each customer organization gets its own tenant with its own data, users, and configurations. Tenants are identified by a unique Tenant ID and are accessed via URLs like businesscentral.dynamics.com/[tenant-id].

What is Dimensions in Business Central?

Dimensions are labels or tags you attach to transactions for advanced reporting — for example, Department, Project, Region, or Cost Center. Business Central supports two Global Dimensions used for fast filtering and unlimited Shortcut Dimensions. Once transactions are posted, you can analyze profitability or cost by Dimension combinations.

What is MB-800 certification?

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