What Does Business Central Actually Do?
What Does Microsoft Business Central Actually Do?
If you’ve already asked the question “What is Microsoft Business Central?”, the next logical step is to understand what it actually does — how it works in practice, what processes it improves, and how it adds value across a business.
Microsoft Business Central is more than just accounting software. It’s a cloud-based enterprise resource planning (ERP) platform designed to help small and medium-sized businesses manage finances, operations, sales, inventory, projects, and more in one integrated system. What makes it powerful is not just its individual features, but how it brings those capabilities together to support real-time decision-making, automation, and scale.
In this guide, we’ll break down what Business Central does across core business functions. If you’re an Australian business looking to replace outdated systems or unify your processes, this article will give you a clear picture of what to expect — and why working with a trusted partner like Wolfe Systems can make all the difference.
Why Understanding Business Central’s Capabilities Matters
Many businesses exploring Microsoft Business Central initially focus on what it is — a modern ERP solution for small and medium-sized enterprises. But to realise its full potential, it’s equally important to understand what it actually does day to day.
Knowing the specific capabilities of Business Central helps you determine whether it’s the right fit for your business needs. It reveals how the platform supports not just financial management but also sales, operations, inventory, and reporting — all within a single environment. This clarity is crucial for businesses that are currently juggling multiple software systems, using spreadsheets to fill gaps, or experiencing delays caused by data silos and manual processes.
By understanding what Business Central does across departments, you can identify inefficiencies in your current systems and visualise a more streamlined, scalable future. And when implemented with support from a local Microsoft partner like Wolfe Systems, the transition becomes less about software and more about long-term business improvement.
Unified Financial Management
At its core, Microsoft Business Central delivers a robust financial management system designed to replace basic accounting software and disconnected spreadsheets. It offers complete visibility across your financial operations while reducing the need for manual input and reconciliation. For Australian businesses, this means better compliance, more accurate reporting, and faster month-end close processes.
Business Central allows you to manage general ledger functions, budgeting, and bank reconciliations all from a single platform. It supports multi-currency and multi-entity businesses, making it suitable for growing organisations with complex structures.
Key financial capabilities include:
- General ledger and chart of accounts
Structure your financial reporting with a flexible and customisable chart of accounts. Track transactions, manage entries, and drill down into details for complete transparency. - Cash flow forecasting and budgeting
Use historical data and projected revenue to model cash flow and plan future spending with confidence. - Bank account reconciliation
Automate the matching of bank transactions to ledger entries, improving accuracy and saving time during reconciliation. - Fixed asset management
Track acquisitions, depreciations, and disposals of assets — ensuring your books remain compliant and up to date. - Australian tax and BAS compliance
Business Central includes built-in support for local tax rules and GST reporting, with workflows to help you prepare and lodge Business Activity Statements efficiently.
By managing all financial tasks in one place, Business Central eliminates data duplication and gives your finance team a real-time view of business performance.
Sales and Customer Relationship Management (CRM)
Microsoft Business Central doesn’t just manage finances — it also supports your front-end operations by helping you manage leads, sales orders, customer accounts, and after-sales service. It brings customer and sales data into the same environment as your financials, eliminating the need for separate CRM or quoting systems.
By linking customer interactions to financial outcomes, Business Central gives you a full view of the sales cycle — from first contact through to invoicing and payment — with data-driven insights along the way.
Key CRM and sales features include:
- Customer and contact management
Maintain a central record of all customer interactions, quotes, and communications, giving sales and service teams full context when engaging clients. - Sales quotes, orders, and invoicing
Easily create quotes and convert them to sales orders or invoices. Track order statuses, delivery, and payment history in one place. - Credit and payment tracking
Monitor customer credit limits, overdue accounts, and payment patterns to reduce risk and improve cash flow. - Task and approval workflows
Automate sales approval processes, reminders, and escalations to speed up transactions and ensure compliance with internal policies.
By integrating sales and finance, Business Central ensures that all teams are working with the same data, leading to faster service delivery, fewer delays, and more accurate forecasting.
Purchasing and Inventory Control
Managing suppliers, stock levels, and purchase workflows is critical for operational efficiency — especially in wholesale, distribution, and retail environments. Microsoft Business Central simplifies purchasing and inventory management by connecting these functions directly to your financial and sales data.
With real-time visibility into inventory levels, order statuses, and supplier performance, businesses can reduce overstocking, avoid stockouts, and optimise procurement decisions. Purchasing workflows are also automated to save time and prevent errors.
Key features include:
- Vendor records and purchasing histories
Track supplier contact information, contract terms, and previous orders — making it easier to evaluate performance and negotiate better terms. - Automated replenishment
Set reorder points and minimum stock levels. Business Central automatically generates purchase orders when stock runs low. - Inventory tracking
Monitor stock movements across locations, bins, and warehouses. You can also manage inventory by lot or serial numbers for traceability. - Costing and valuation methods
Support for FIFO, average cost, and standard costing methods ensures accurate financial reporting and compliance. - Purchase order to invoice matching
Reduce fraud and billing errors by automatically matching purchase orders with delivery receipts and supplier invoices.
Business Central enables your purchasing and warehouse teams to stay aligned with real-time data, improving order accuracy, supplier relationships, and working capital management.
Project and Job Costing
For businesses that deliver services or work on a project basis — such as construction firms, engineering consultancies, creative agencies, or IT service providers — tracking time, costs, and profitability at the job level is essential. Microsoft Business Central includes built-in project and job costing tools to help manage these workflows end to end.
Unlike basic time tracking systems, Business Central integrates projects directly with your financial and resource planning. This means you can manage budgets, assign resources, and invoice clients all within the same platform.
Key capabilities include:
- Project setup and scheduling
Define job tasks, timelines, and assigned resources. Set milestones and monitor progress against planned stages. - Time and resource tracking
Record hours worked, resources used, and expenses against specific jobs. This supports accurate client billing and internal cost analysis. - Budget versus actual tracking
Compare forecasted costs and revenue with actuals in real time. Quickly identify overruns or underutilised resources. - Job profitability reporting
Access detailed insights on which jobs are profitable and where margins are being eroded, enabling better quoting and delivery in future projects. - Invoicing and revenue recognition
Raise progress claims or fixed-fee invoices, and align revenue recognition with project delivery phases or accounting standards.
This level of control gives project-based businesses the insights they need to stay on budget, improve resourcing, and maintain healthy margins.
Manufacturing and Supply Chain Management
For businesses involved in light or complex manufacturing, Microsoft Business Central provides a flexible set of tools to manage production planning, supply chain coordination, and materials usage. These features are ideal for manufacturers needing greater control over planning, scheduling, and cost tracking — without the complexity of larger, enterprise-grade systems.
Business Central enables production teams to align their operations with demand forecasts, customer orders, and inventory availability. It also supports subcontracting and internal capacity planning.
Key manufacturing and supply chain capabilities include:
- Production orders and routing
Create and manage production orders, define operation steps, and assign resources for each stage of the process. - Bill of Materials (BoM)
Define components and raw materials for each finished product, ensuring accurate costing and inventory control. - Demand forecasting
Plan production runs based on historical sales data, seasonality, and forward-looking sales forecasts. - Capacity planning
Monitor workstation availability, plan workloads, and avoid production bottlenecks by balancing machine and labour capacity. - Subcontracting support
Manage outsourced production processes, including vendor agreements, scheduling, and cost reconciliation.
These tools help manufacturing and supply chain teams operate more efficiently, reduce waste, and respond quickly to changes in customer demand or supply disruptions.
Warehouse Management and Fulfilment
Efficient warehouse operations are essential to meeting customer expectations and maintaining profitability. Microsoft Business Central helps streamline warehouse activities by providing real-time visibility into inventory movements, storage locations, and order fulfilment workflows.
Whether you manage a single warehouse or multiple locations, Business Central enables you to track stock with precision, automate picking and shipping processes, and reduce manual errors.
Key warehouse management features include:
- Bin and location tracking
Define and manage warehouse layouts, including bins, shelves, and zones — allowing for faster stock retrieval and better space utilisation. - Inventory movements
Record inbound, outbound, and internal transfers to maintain accurate stock levels across locations. - Barcode scanning and mobile device support
Integrate with handheld scanners to automate picking, packing, and stocktake processes, reducing human error and increasing speed. - Shipping integration
Link to freight and courier systems to streamline labelling, tracking, and dispatch. Automate shipping confirmations and generate documents with ease. - Cycle counting and stock adjustments
Maintain accuracy with scheduled cycle counts and spot checks, and apply real-time adjustments directly into your inventory records.
By connecting warehouse processes with finance, purchasing, and sales, Business Central helps fulfil orders faster, avoid overstocking or stockouts, and maintain tighter operational control.
Real-Time Reporting and Business Intelligence
Making fast, informed decisions is difficult without access to accurate and timely data. Microsoft Business Central helps solve this challenge by delivering built-in reporting and analytics tools that provide visibility across every part of your business — from finance and sales to operations and inventory.
Rather than relying on disconnected spreadsheets or manual reporting, Business Central gives you real-time dashboards and insights the moment data is entered into the system. This allows business owners, managers, and finance teams to make decisions based on up-to-date information.
Core reporting and analytics capabilities include:
- Standard and custom reports
Generate out-of-the-box financial statements, sales summaries, inventory reports, and more. Create customised views tailored to your team’s needs. - Power BI integration
Connect Business Central to Microsoft Power BI to build interactive dashboards, visualise trends, and drill down into performance metrics. - KPI and executive dashboards
Track business-critical indicators such as cash flow, overdue receivables, sales pipeline, and order fulfilment — all from a central screen. - Forecasting tools
Use historical data and modelling tools to forecast revenue, expenses, or demand. This helps with planning, budgeting, and strategic decision-making. - Export to Excel
Easily export data to Excel for advanced analysis, sharing with external stakeholders, or integrating with your existing financial workflows.
With Business Central’s reporting tools, your team can spend less time collecting data and more time analysing it — improving confidence in every decision you make.
Workflow Automation and Process Approvals
Manual processes are one of the biggest sources of delay, inconsistency, and error in small to medium-sized businesses. Microsoft Business Central helps reduce these inefficiencies by enabling workflow automation and structured approval processes across your operations.
From finance and purchasing to sales and inventory, Business Central allows you to define approval rules, automate task assignments, and trigger notifications — all within the system.
Key workflow and automation features include:
- Document approval workflows
Set up multi-level approvals for purchase orders, invoices, or sales quotes to ensure compliance with internal policies. - Automated notifications
Trigger email alerts and reminders when certain thresholds are met, such as overdue payments, low stock levels, or pending approvals. - Scheduled tasks
Automate recurring processes like inventory valuations, data synchronisation, or monthly reports — without requiring manual input. - Customisable conditions and logic
Define when and how workflows should be triggered using conditions based on user roles, amounts, or transaction types. - Integration with Microsoft Power Automate
Extend your workflows beyond Business Central by connecting to third-party apps, CRMs, or payroll systems using Power Automate.
By introducing workflow automation, Business Central helps businesses maintain control without micromanaging — saving time, reducing risk, and ensuring consistency across the board.
Integration with Microsoft 365 and Other Tools
One of the key advantages of Microsoft Business Central is how seamlessly it integrates with the broader Microsoft ecosystem — including Microsoft 365, Power Platform, and a wide range of third-party applications. This integration makes everyday tasks more efficient and ensures your team can work within the tools they already know.
Instead of switching between disconnected systems, users can access Business Central features directly from Outlook, Excel, or Teams — improving collaboration and reducing duplicate data entry.
Popular integrations include:
- Outlook
View customer data, send quotes, and raise invoices directly from your Outlook inbox. You can also access interaction history and sales information without leaving your email. - Excel
Export and analyse data in Excel with live links back to Business Central. Any changes made in Excel can be synced back into the system (with appropriate permissions). - Teams
Share customer records, purchase orders, or project updates inside Teams channels to keep your conversations aligned with your data. - Power Automate
Create cross-system workflows that connect Business Central with other platforms — such as CRMs, payment gateways, HR systems, or file storage services. - Microsoft Dataverse
Store and manage data from various sources in one central database, helping businesses scale integrations and enable custom apps.
These integrations allow your business to streamline communication, boost productivity, and maintain a single source of truth across all departments.
Localisation for Australian Businesses
Microsoft Business Central is built for global use, but it also offers important localisation features tailored to the Australian business environment. These capabilities ensure that Australian SMEs can remain compliant with local tax regulations, payroll frameworks, and accounting standards — without the need for manual workarounds or custom-built solutions.
Wolfe Systems helps configure these settings during implementation to align with your industry, size, and reporting obligations, making Business Central a practical choice for businesses operating in Australia.
Key Australian localisation features include:
- GST and BAS reporting
Business Central supports Goods and Services Tax (GST) tracking, calculation, and reporting. It also streamlines preparation for Business Activity Statements (BAS) using pre-configured tax codes and submission workflows. - Multi-currency and multi-entity support
Many Australian businesses deal with suppliers or customers overseas. Business Central handles multi-currency transactions and consolidates reporting across multiple business entities or legal structures. - Local chart of accounts templates
Predefined account structures are available for Australian financial reporting standards, saving time during setup and ensuring consistency. - Payroll integration
While Business Central doesn’t include payroll out of the box, it integrates smoothly with Australian-compliant payroll platforms like KeyPay or Employment Hero, supporting Single Touch Payroll (STP) reporting. - Regulatory compliance and audit readiness
Maintain audit trails, user permissions, and financial histories that align with ATO and ASIC requirements — especially important for businesses seeking funding or preparing for growth.
With these localisation features, Business Central supports Australian businesses not only in running more efficiently, but also in staying compliant and future-ready.
What Business Central Doesn’t Do (Limitations to Know)
While Microsoft Business Central is a powerful and flexible ERP solution, it’s important to understand its limitations — particularly so businesses can plan for complementary tools or manage expectations during implementation. Knowing what Business Central doesn’t do helps avoid surprises and ensures a smoother experience overall.
Here are some areas where Business Central has limitations:
Not designed for large enterprise environments
Business Central is ideal for small to medium-sized businesses. However, large enterprises with highly complex operations, thousands of users, or global subsidiaries may require more advanced platforms like Dynamics 365 Finance and Operations.
No built-in payroll module
Business Central does not include native payroll processing. However, it integrates easily with third-party payroll systems that meet Australian Single Touch Payroll (STP) requirements, such as KeyPay or Employment Hero.
Basic CRM functionality
While it includes customer management, Business Central is not a full-featured CRM platform. Businesses with complex sales workflows or marketing automation needs may still require Dynamics 365 Sales or a standalone CRM solution like HubSpot or Salesforce.
Limited advanced manufacturing features
For high-volume, multi-stage manufacturing with deep MES (Manufacturing Execution Systems) or IoT integrations, additional solutions may be required. Business Central covers core manufacturing well but is not designed for highly specialised production environments.
No native HR or recruitment functions
Business Central does not manage onboarding, timesheets, performance reviews, or recruitment. These capabilities are best handled by dedicated HR platforms that can be integrated into your ERP environment.
By being transparent about these gaps, Wolfe Systems helps clients make informed decisions and, where needed, recommends integrated solutions that complement Business Central’s strengths.
How Business Central Works in Practice
Microsoft Business Central is more than just an accounting system. It is a modern ERP solution that unifies finance, sales, operations, inventory, and project management into one cloud-based platform — giving small and medium-sized businesses the tools they need to scale, streamline, and succeed.
What sets Business Central apart is how it connects daily business processes with real-time insights and automation. Instead of relying on spreadsheets, disconnected tools, or manual approvals, teams can work from a single system that supports better collaboration, faster reporting, and more confident decision-making.
From automating financial reconciliations to improving order fulfilment and managing project budgets, Business Central supports the way Australian businesses operate — with localisation features that ensure compliance and integrations that enhance productivity.
However, implementation is key. Working with a qualified partner like Wolfe Systems ensures that Business Central is configured to suit your unique workflows, industry requirements, and future growth. Whether you’re upgrading from MYOB, Xero, spreadsheets, or legacy systems, Wolfe Systems can guide you through the process and provide the long-term support needed to get the most out of your ERP investment.
