Dynamics 365 Business Central Project Management: for UK Businesses

Managing projects across multiple teams, budgets, resources and customer commitments can become difficult when information is spread across spreadsheets and disconnected applications. Businesses need a reliable way to monitor project costs, track employee time, manage resources and understand profitability without relying on manual reporting.

Microsoft Dynamics 365 Business Central Project Management provides integrated project accounting and management capabilities that help businesses plan projects, allocate resources, record usage, monitor budgets and manage customer invoicing from one ERP platform.

For UK businesses delivering client projects, professional services, engineering work, installations or other resource-based activities, Business Central can connect project operations with financial management, purchasing and inventory.

This guide explains how project management works in Dynamics 365 Business Central, its key features, licensing and implementation costs, and what businesses should consider before adopting it.

Key Takeaways

• Dynamics 365 Business Central includes built-in project management functionality for planning, budgeting, resource allocation and project accounting.
• Businesses can create project tasks and planning lines to organise work, costs and billable activities.
• Project managers can monitor resource usage, employee hours and actual costs against budgets.
• Business Central supports different project billing approaches, including fixed-price and time-and-materials arrangements.
• Work in Progress (WIP) calculations help businesses account for ongoing project costs and revenue.
• Implementation costs depend on business requirements, data migration, integrations, configuration and customisation.
• Working with an experienced Business Central implementation partner helps align the system with existing project and financial processes.

What Is Project Management in Dynamics 365 Business Central?

Project management in Microsoft Dynamics 365 Business Central is a collection of ERP capabilities designed to help businesses plan, execute, monitor and account for projects.

Rather than managing project activities separately from finance, businesses can connect project tasks, resources, materials, expenses, budgets and customer invoices within the same system.

Business Central uses its Projects functionality (previously referred to as Jobs in older versions) to organise project activities and track financial performance.

For example, consider a UK engineering company delivering installation projects for commercial customers. Each project may involve engineers, equipment, purchased materials, subcontracted services and customer invoices.

With Business Central, the company can:

• Create a project and divide it into individual tasks.
• Allocate employees and other resources.
• Estimate labour, material and operational costs.
• Record actual resource and material consumption.
• Compare project budgets with actual expenditure.
• Calculate Work in Progress.
• Generate customer invoices based on agreed billing arrangements.

This gives project managers and finance teams a more connected view of project performance.

Key Features of Dynamics 365 Business Central Project Management

Business Central offers several project management features that help organisations manage project operations alongside their financial processes.

1. Project Creation and Task Management

Every project starts with a structured plan. Business Central allows users to create project records and divide them into smaller tasks.

Each project can contain multiple task lines, making it easier to organise activities, assign responsibilities and monitor progress.

For example, an IT consultancy delivering an ERP implementation could divide a project into:

• Initial business assessment
• Solution design
• System configuration
• Data migration
• User acceptance testing
• Employee training
• Go-live and support

Project planning lines can then be created against individual tasks to specify the resources, items and expenses required.

This structure helps businesses understand what work needs to be completed and what costs are associated with each activity.

2. Project Budgeting and Cost Management

Unexpected project expenses can reduce margins and affect overall profitability. Business Central helps businesses establish project budgets and monitor resource and material consumption against planned figures.

Project planning lines allow users to record estimated quantities, costs and billable values.

Businesses can monitor:

• Estimated labour costs
• Material and inventory expenses
• Resource consumption
• Budgeted project revenue
• Actual costs against planned costs
• Differences between estimated and actual usage

For example, if a construction services company budgets 200 engineering hours for an installation project, it can record actual resource usage and compare it with the original estimate.

This makes it easier to identify cost overruns and investigate projects that are using more resources than expected.

3. Resource Allocation and Capacity Planning

Managing employee and equipment availability is essential when several projects are running simultaneously.

Business Central allows businesses to set up resources, resource groups, costs, prices and available capacity.

Resources can include employees, machines and other operational resources used to deliver projects.

Project managers can use resource information to:

• Assign resources to project tasks.
• Review resource availability.
• Track planned and actual resource usage.
• Monitor employee and machine hours.
• Manage resource costs and prices.
• Plan capacity across projects.

This is particularly useful for engineering companies, consultancy firms and service providers where employee time directly affects project costs and profitability.

4. Project Time Tracking and Timesheets

Accurate time recording is important for businesses that charge customers based on employee hours or need to understand the labour cost of individual projects.

Business Central supports timesheets that allow employees to record time spent on project activities.

Managers can review and approve submitted timesheets before the recorded usage is posted to project journals.

This helps businesses:

• Record employee hours against specific projects.
• Monitor labour consumption.
• Improve project cost calculations.
• Support time-and-materials billing.
• Reduce manual time-recording processes.

For example, a consulting business can record the hours spent by different consultants on a customer implementation project and use that information to calculate billable usage.

5. Project Billing and Customer Invoicing

Different projects require different billing arrangements. Some customers agree on a fixed project price, while others pay according to the resources, materials and hours consumed.

Business Central supports both approaches through project planning lines and invoicing functionality.

Fixed-price project billing

Businesses can agree on a project price before work begins and structure billable amounts around the agreed scope or milestones.

Time-and-materials billing

Businesses can invoice customers based on actual resource hours, materials and other billable usage.

Project invoicing

Users can prepare and post customer invoices for project activities, helping connect project consumption with financial transactions.

For example, an IT consultancy can agree to deliver a Business Central implementation for a fixed fee, while a separate support engagement may be billed according to the actual consulting hours used.

The ability to manage project costs and customer billing within one ERP system improves financial visibility and reduces the need to reconcile information across separate applications.

6. Work in Progress (WIP) Management

Work in Progress is important for businesses delivering projects over several weeks or months, particularly when costs are incurred before the customer is invoiced.

Business Central provides WIP calculation functionality to help businesses account for the financial value of ongoing projects.

Depending on the selected method and configuration, businesses can calculate WIP using methods such as:

• Cost Value
• Sales Value
• Cost of Sales
• Percentage of Completion
• Completed Contract

WIP calculations help finance teams understand the value of ongoing project activity and support appropriate financial reporting.

For example, an engineering project may have incurred significant labour and material costs but may not yet have reached the agreed customer billing milestone. WIP accounting helps the finance team account for the project activity appropriately.

The correct method depends on the organisation's accounting policies and reporting requirements.

7. Project Reporting and Financial Analysis

Project managers need reliable information to understand whether projects are progressing according to plan.

Business Central includes project reports that help businesses review planning, usage, transactions and actual costs against budgets.

These reports can support analysis of:

• Project budgets and actual expenditure
• Resource consumption
• Project task transactions
• Project planning lines
• Project financial performance
• Work in Progress

Businesses can also use Power BI to build more detailed dashboards and management reports using relevant Business Central data.

This helps project managers and finance directors make decisions using more consistent operational and financial information.

How Does Business Central Project Management Work?

Business Central connects project planning, resource usage and financial transactions through a structured process.

A typical project management workflow includes the following stages:

Step 1: Create a Project

Create a new project record and enter the relevant customer, project details and financial information.

Step 2: Define Project Tasks

Divide the project into individual tasks to organise activities and establish a clear project structure.

Step 3: Create Project Planning Lines

Add resources, items and expenses to the relevant tasks. Define estimated quantities, costs and billable amounts.

Step 4: Allocate Resources

Assign employees, machines or other resources and review their availability and associated costs.

Step 5: Record Project Usage

Record actual resource hours, material consumption and other project-related expenses through the relevant journals and timesheet processes.

Step 6: Monitor Costs and Budgets

Compare actual usage with planned budgets to identify cost differences and monitor project performance.

Step 7: Calculate WIP and Invoice Customers

Calculate WIP where required and prepare customer invoices according to the project's billing arrangement.

Step 8: Review Project Performance

Use project reports and financial information to evaluate costs, revenue and overall project performance.

This workflow helps businesses connect project delivery with financial management rather than maintaining separate records for each department.

Business Central Project Management vs Standalone Project Management Software

Businesses evaluating project management solutions often compare Business Central with standalone project management applications.

The right choice depends on whether the main requirement is task collaboration or integrated project accounting.

When Should You Choose Business Central?

Business Central is worth considering when your business needs project management alongside financial and operational control.

It can be a suitable option for:

• Professional services companies managing customer projects.
• Engineering businesses tracking labour and material costs.
• Installation and maintenance companies delivering project-based work.
• Businesses that need project accounting and customer invoicing.
• Organisations that want to connect projects with purchasing, inventory and finance.

When Is Standalone Project Management Software More Suitable?

A dedicated project management application may be more appropriate when the main requirement is advanced task collaboration, agile sprint management, product development workflows or detailed project scheduling.

Some organisations may benefit from combining Business Central with a dedicated project management application through integration.

The decision should be based on the processes your business needs to manage, rather than simply comparing software feature lists.

Dynamics 365 Business Central Project Management Costs in the UK

The total cost of adopting Business Central project management depends on more than the software licence.

Businesses should consider licensing, implementation, configuration, data migration, integrations, training and ongoing support.

1. Business Central Licence Costs

Business Central offers different licence options depending on the functionality and user requirements.

The main licence types are:

• Essentials: Includes core financial management, sales, purchasing, inventory and project management capabilities.
• Premium: Includes Essentials functionality alongside additional service management and manufacturing capabilities.

Project management functionality is available with the Essentials licence, so businesses do not need Premium solely to manage projects.

Microsoft's UK list pricing should be checked before purchase, as licensing prices and terms can change. Licence costs are separate from implementation fees.

2. Implementation Costs

Implementation costs depend on the complexity of the project and the level of support required.

Typical implementation activities include:

• Business requirements analysis
• Project management process assessment
• System configuration
• Financial and project setup
• Data migration
• Integration with existing applications
• Customisation and extensions
• User acceptance testing
• Employee training
• Go-live support

A business with straightforward project costing and invoicing requirements may need less implementation work than an organisation managing multiple companies, complex billing arrangements and extensive integrations.

3. Additional Costs to Consider

Important: There is no single implementation price that applies to every business. The most accurate estimate comes from assessing project workflows, users, data, integrations and business requirements before implementation.

How to Implement Dynamics 365 Business Central Project Management

A successful implementation requires more than enabling project management features. Businesses should first understand how their current project processes work and how those processes should operate in the new ERP environment.

Here is a practical implementation approach.

1. Assess Your Existing Project Management Processes

Review how your business currently manages projects, budgets, employee hours, resource allocation and customer invoicing.

Identify issues such as manual reporting, inconsistent cost tracking and disconnected financial information.

2. Define Business Requirements

Establish which project management processes need to be supported in Business Central.

These may include:

• Project budgeting and cost tracking
• Resource and capacity planning
• Employee timesheets
• Fixed-price project billing
• Time-and-materials invoicing
• WIP calculations
• Project financial reporting

3. Configure Business Central

Configure project setup, resources, resource groups, timesheets, posting groups and project planning processes according to your requirements.

4. Migrate Relevant Data

Move the required customer, supplier, resource, project and financial information from existing systems.

Data should be reviewed and validated before migration to avoid carrying inaccurate or duplicate records into the new environment.

5. Configure Integrations and Extensions

Identify whether Business Central needs to connect with Microsoft 365, Power BI, payroll applications or other business systems.

Where standard functionality does not meet a specific requirement, assess suitable extensions or custom development.

6. Test Project Workflows

Test project creation, task planning, resource usage, timesheet approval, cost posting, invoicing and WIP calculations.

User acceptance testing helps confirm that the configured system supports actual business processes.

7. Train Employees and Go Live

Provide appropriate training to project managers, finance teams and other users.

Once testing and data validation are complete, prepare the go-live plan and provide post-implementation support.

For more details, read our guide to Business Central implementation methodology.

Why Choose Dynamics Square UK for Business Central Project Management Implementation?

Selecting the right implementation partner is an important part of a successful ERP project.

Dynamics Square UK helps businesses assess, implement and optimise Microsoft Dynamics 365 Business Central according to their operational and financial requirements.

Our team can support your project management implementation through:

• Business requirements assessment: Understanding your existing project workflows, challenges and objectives.
• Solution configuration: Configuring project tasks, budgets, resources, timesheets and financial processes.
• Data migration: Helping transfer relevant business and project information into Business Central.
• System integration: Connecting Business Central with suitable Microsoft and third-party applications.
• User training: Preparing employees to work confidently with the new system.
• Ongoing support: Providing assistance to help your business maintain and improve its ERP environment.

Whether you are implementing Business Central for the first time or improving an existing system, Dynamics Square UK can help you build a solution around your business requirements.

Explore our Microsoft Dynamics 365 Business Central solutions to understand how the platform can support your wider business operations.

Frequently Asked Questions

1. Does Microsoft Dynamics 365 Business Central have project management functionality?

Yes. Business Central includes built-in project management functionality for creating projects, managing tasks, budgeting, allocating resources, recording usage, tracking costs and invoicing customers.

2. What is the Projects module in Business Central?

The Projects functionality in Business Central helps businesses manage project tasks, planning lines, resources, budgets, actual usage, costs, billing and Work in Progress.

3. Can Business Central manage project costs and budgets?

Yes. Businesses can create project budgets, record estimated resource and material costs, track actual usage and compare expenditure against planned amounts.

4. Can I manage employee timesheets in Business Central?

Yes. Business Central supports timesheets for recording employee and resource hours against projects. Managers can review and approve submitted timesheets as part of the project usage process.

5. Does Business Central support fixed-price and time-and-materials billing?

Yes. Business Central supports both approaches through project planning lines and project invoicing. Businesses can manage agreed billable amounts or invoice based on actual project usage.

6. Can Business Central calculate Work in Progress (WIP)?

Yes. Business Central supports several WIP calculation methods, including Cost Value, Sales Value, Cost of Sales, Percentage of Completion and Completed Contract. The appropriate method depends on the business's accounting requirements.

7. Is Business Central suitable for professional services companies?

Yes. Professional services businesses can use Business Central to manage client projects, employee hours, resource costs, project budgets and customer billing. The suitability depends on the complexity of their delivery and resource management requirements.

8. Does Business Central project management require a separate licence?

Project management functionality is included in the Business Central Essentials and Premium licence plans. A separate project management licence is not required solely for the standard Projects functionality. Additional third-party applications may have their own licensing costs.

9. How much does Business Central project management implementation cost?

The cost depends on the number of users, project complexity, configuration, data migration, integrations, customisation and training requirements. A business-specific assessment is needed to provide an accurate implementation quotation.

10. Can Dynamics Square UK help implement Business Central project management?

Yes. Dynamics Square UK provides Business Central consulting, implementation, configuration, data migration, integration, training and support services to help businesses implement project management and financial processes.

Improve Project Visibility and Financial Control with Business Central

Managing projects successfully requires accurate cost information, effective resource planning and reliable financial reporting.

Microsoft Dynamics 365 Business Central brings project management and ERP capabilities together, helping businesses manage project activities while maintaining visibility across their financial and operational processes.

If your organisation is looking to improve project costing, resource utilisation, timesheet management or customer invoicing, the right Business Central configuration can make a measurable difference.

Contact Dynamics Square UK to discuss your project management requirements and explore how Microsoft Dynamics 365 Business Central can support your business.