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Moving Beyond User Groups to Hierarchical Permission Sets in Dynamics 365 Business Central

Consultant and Managing Partner, MGC Group LLC

As part of the 2024 Wave 2 update (rolling out between October 2024 and March 2025), Microsoft Dynamics 365 Business Central is introducing a significant change to its permissions framework. User Groups, a long-standing feature, are being deprecated and replaced by new functionality related to both Security Groups and Permission Sets. This shift aims to streamline user management, improve flexibility, and provide better alignment with modern enterprise requirements.

If your organization relies on User Groups, it’s essential to understand the available conversion options and the implications of this change to ensure a smooth transition.

What’s Changing with User Groups?

User Groups are being automatically disabled in the 2024 Wave 2 update. They will no longer be a part of the Business Central permission structure. Instead, Microsoft recommends utilizing:

  1. Security Groups: These allow dynamic permissions that automatically apply to all users (new and existing) within the group.
  2. Permission Sets: These grant granular control over the specific permissions initially assigned to individual users.
System Hierarchical Permission Set
Page 1 in User Groups Migration Guide

Options for User Group Conversion

To prepare for the new permissions framework, you can convert existing User Groups using the following approaches for each User Group that is being deprecated, when selected to do so, the conversion will:

  1. Create and Assign New Permission Sets
    • Create a new Permission Set that mirrors the permissions previously granted by the group.
    • Assign this Permission Set to individual users who were part of the User Group.
  2. Direct Assignment of Permissions
    • Assign the permissions granted by a User Group directly to the individual users within that group.
    • This approach avoids the need for creating new Permission Sets but may be less scalable for large teams.

Tip: Before enabling the new permission structure, if you select the “Create and assign new permission sets” option, you may want to delete any unassigned or unused User Groups. This will help to avoid converting User Groups that are no longer in use to simplify the transition. This is not necessary if you select “Direct Assignment of Permissions.”

License Configuration vs. Security Groups

Understanding the difference between License Configuration and Security Groups is crucial as you transition:

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About Cynthia Priebe - Microsoft MVP

Cynthia Priebe works directly with end users and finance professionals daily — often brought in where others have not been able to find a solution. That field work is the source of everything she writes. After more than 20 years with Microsoft Dynamics NAV and now Dynamics 365 Business Central, her focus is on why the system behaves the way it does, not just what it can do.

Her work centers on the scenarios that don't always behave as expected and aren't always documented — particularly permissions and security behavior, financial reporting, and post–go-live configuration. Much of her content addresses functionality that didn't get fully configured at go-live, capabilities organizations didn't know existed, or setup that needs to evolve as the business changes.

Cynthia is a Microsoft MVP in Business Applications — Dynamics 365 Business Central, a Microsoft Certified Trainer (MCT), and has held the MB-800 Business Central Functional Consultant certification since it first became available. Before the exam launched, she was part of the worldwide team that wrote the original exam items. She also works with Microsoft Partners and ISVs, contributing practitioner-level knowledge to how BC is built, documented, and taught.

A regular presenter at DirectionsNA, DynamicsCon, and Community Summit, she is also a co-leader of the DUG Mentorship Meetup Group, owner of the Sharing the Righter Way™ LinkedIn community, and served on the Programming Committees for both Community Summit 2024, 2025 and DynamicsCon 2026.

You can connect with Cynthia on LinkedIn or join the Sharing the Righter Way™ LinkedIn community. In addition to her contributions here ...

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