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Business Central handles bank reconciliation and cash flow forecasting for single-entity SMBs, but doesn't connect to multiple banks via API and its AI-enhanced forecast features work best in the cloud. Dynamics 365 Finance includes Advanced Bank Reconciliation and cash flow tools, but has no loan management module, no FX risk tools, and no treasury dashboards. Both platforms treat loan management and cash management as separate functions, so debt facility tracking lives outside the system. A connected treasury platform integrates bidirectionally with Dynamics via API, and simultaneously connects to banks, giving you real-time cash visibility and automated workflows.
Dynamics 365 Finance vs Business Central: what changes for treasury
Microsoft's two flagship ERP offerings sit in distinctly different market segments, and their native treasury capabilities reflect that. Both platforms handle bank and cash accounting well.
Business Central in the mid-market
Dynamics 365 Business Central targets small and medium-sized businesses. It covers foundational accounting hygiene: general ledger, accounts payable and receivable, bank account setup, and a bank reconciliation module. The Bank Acc. Reconciliation page matches entries in Business Central's bank accounts against imported bank statements, then posts balances to make them available to finance managers. Business Central also includes a Cash Flow Forecast chart, optionally powered by Azure AI, accessible via the Accountant Role Centre.
Dynamics 365 Finance in the enterprise
Dynamics 365 Finance targets larger enterprises and includes a more comprehensive Cash and Bank Management module. It covers bank account maintenance, deposit slips, cheques, bills of exchange, promissory notes, and Advanced Bank Reconciliation with configurable import processes and matching rules. It also includes cash flow forecasting tools that analyse upcoming cash flows and currency requirements, plus centralised payment processing for accounts payable and receivable across entities.
Dynamics 365 Finance has more native functionality than Business Central, but even here, the treasury function outgrows the platform as organisations expand internationally, add acquisition debt, or implement cash pooling structures.
Mixed ERP estates and multi-entity groups
Organisations running multiple legal entities often end up with mixed ERP estates: some subsidiaries on Business Central, others on Dynamics 365 Finance, plus legacy systems in acquired businesses. Private equity-backed groups and post-merger integrations run into this constantly. The result? No single source of truth for cash, inconsistent reconciliation processes, and no way to consolidate liquidity positions in real time. Around 49% of treasury teams now prioritise scalability when selecting technology, up from 39% in 2022, according to Deloitte's 2024 Global Corporate Treasury Survey, which maps directly to this problem.
Native limitations of each suite
Dynamics 365 and Business Central are highly capable accounting systems. However, corporate treasury and operational accounting are different disciplines.
Business Central: bank feeds, bank reconciliation and cash flow forecast
Business Central's reconciliation functionality has improved, but meaningful gaps remain relative to what treasury teams need in practice. Bank feed integrations typically require third-party connectors or manual CSV import; real-time, API-native multi-bank connectivity isn't built in. Cash flow forecasting with Azure AI works in cloud deployments and relies on Azure AI, which requires enabling and only works as well as the underlying data. The forecast doesn't automatically pull from all cash flow drivers across a complex group.
Business Central is built around single legal entities. Consolidating cash visibility across subsidiaries requires workarounds or additional tooling. There is no native FX risk management, no structured intercompany netting, and no bank counterparty relationship management for tracking credit lines, overdraft facilities, or covenant compliance.
Dynamics 365 Finance: what is in place and where gaps are
Dynamics 365 Finance has a richer native set, but the gaps show up as organisations move up the treasury complexity curve. Advanced Bank Reconciliation works well for matching known transaction types, but the rule-based matching engine is static. Enterprise financial reconciliation often struggles with manual matching, fragmented cloud and ERP integrations, and inconsistent evidence retention, which drags out the financial close and raises audit risk.
Cash flow forecasting in Dynamics 365 Finance provides a structural framework but lacks real-time bank balance feeds and does not integrate payment flow intelligence from external systems. There is no dedicated FX risk module. Consequently, hedging, FX exposure reporting, and IFRS 9 hedge accounting documentation require separate tooling or customisation. Standard Dynamics 365 Finance reports are accounting-oriented rather than treasury-oriented, meaning they do not natively display global cash positions, intraday liquidity analysis, or real-time payment status tracking.
Bank connectivity in Dynamics 365 Finance supports formats such as ISO20022, BAI2 and CAMT, but doesn't offer out-of-the-box API connectivity to major UK and European banks. In-house banking capabilities such as cash pooling, zero-balancing, notional pooling, and intercompany loans managed as an internal treasury function aren't native.
Loan management vs cash management in Dynamics 365
Loan management, which covers tracking borrowing facilities, revolving credit facilities, term loans, intercompany loans, overdrafts, and associated interest accruals and repayment schedules, is a distinct treasury function.
Cash management is the operational discipline of managing daily bank balances, reconciling statements, forecasting short-term liquidity, and making or receiving payments. In Dynamics 365 Finance, this lives within the Cash and Bank Management module.
Dynamics 365 Finance doesn't have a native, dedicated loan management module. Organisations that need to track multi-tranche debt facilities, manage drawdown and repayment schedules, calculate accrued interest, and produce covenant compliance reports have to either build customisations, use Dynamics 365 creatively, or implement a dedicated treasury platform with debt management capabilities.
This is particularly relevant for UK mid-market businesses backed by private equity. These firms frequently operate with complex debt structures, acquisition finance, revolving credit facilities, and shareholder loans, all of which run alongside day-to-day operational cash management.
Dynamics extension vs connected platform: where the treasury logic sits
There are two primary methods to close the treasury gap in a Dynamics environment:
The case for an extension inside Dynamics
An extension built on the Dynamics platform lives inside the Dynamics 365 or Business Central environment. It gets native data access, shared authentication, and no extract-transform-load layer. For organisations with strict IT governance policies favouring a single-vendor footprint, or where IT teams are Dynamics-specialist only, an extension reduces integration friction.
The case for a connected platform
A connected treasury management platform sits adjacent to the ERP, integrating via APIs. It connects bidirectionally to Dynamics 365 Finance or Business Central, pulling accounting data and pushing payments and reconciliation entries, while simultaneously connecting to banks via host-to-host, SWIFT, or open banking APIs.
Around 65% of organisations plan to expand API use in the coming years, enabling real-time integration across ERPs, treasury platforms, and banking networks (PwC Global Treasury Survey). SWIFT lets corporate treasurers communicate with multiple banks through a standardised channel, regardless of business size.
When to stay inside Dynamics
Staying inside Dynamics with native features only makes sense when the organisation is a single-entity business with one or two bank accounts, treasury is managed by the finance team as part of routine accounting without a dedicated treasurer, multi-currency is limited and FX risk is immaterial, and there is no complex debt structure, no cash pooling, and no multi-bank management requirement.
As complexity increases across multi-entity, multi-bank, multi-currency, group treasury, and in-house banking structures, the native Dynamics toolset becomes a bottleneck.
How to choose treasury management software for Dynamics 365
When evaluating a treasury platform for use alongside Business Central or Dynamics 365 Finance, treasury and finance teams should assess across the following dimensions:
| Evaluation dimension | What to look for | Impact |
|---|---|---|
| ERP integration | Native, bidirectional API connector to D365 Finance and Business Central; real-time sync, not batch file transfers | Strong ERP-TMS-bank integration characterises leading treasury ecosystems |
| Bank connectivity | Direct API or SWIFT/ISO 20022 connectivity to major UK and European banks; host-to-host as fallback | ISO 20022 structured data improves reconciliation accuracy and forecasting |
| Bank reconciliation | Automated matching with intelligent rules; exception-handling workflows; audit trail | Bank reconciliation is a key cash management control; manual matching raises audit risk |
| Cash visibility and forecasting | Real-time global cash position; multi-bank, multi-currency; short- and long-term forecasting; AI-assisted projections | Manual forecasting often results in low satisfaction; leading teams use integrated, system-based forecasting |
| Multi-entity and multi-currency | Supports multi-legal entity groups; intercompany netting; FX exposure tracking | Essential for any group operating across multiple legal entities or geographies |
| Payment management | Payment factory or payments-on-behalf-of model; approval workflows; payment status tracking | Large organisations use payment factories to consolidate and control flows |
| Liquidity and risk management | FX risk, interest rate risk, counterparty limits; scenario modelling | Treasury management updates are essential given interest rate volatility and geopolitical uncertainty |
| Loan management | Tracking debt facilities, revolving credit facilities, intercompany loans, interest accrual, covenants | Not natively in Dynamics 365 Finance or Business Central; standard treasury platform capability |
| Regulatory and audit readiness | IFRS 9 hedge accounting; audit trail; internal controls support | Regulatory compliance is a core treasury platform requirement |
| Implementation speed | Cloud-native SaaS; time-to-value in weeks not months; minimal Dynamics customisation needed | Treasury teams increasingly expect rapid implementation as part of the technology investment case |
| Scalability | Supports growth from SMB to enterprise; handles additional entities, banks, currencies without re-implementation | Focus on scalable corporate treasuries rose from 39% in 2022 to 49% in 2024 |
| User experience for finance teams | Treasury-oriented dashboards, not accounting reports; configurable for treasurer vs CFO vs controller views | Treasurers demand configurable rules and real-time override options to retain control |
How Dynamics 365 and Business Central teams run treasury with Embat
Finance teams using Dynamics 365 Finance or Business Central as their ERP layer increasingly connect Embat to close the gap between accounting and strategic treasury management. Embat delivers automated bank reconciliation powered by intelligent matching, real-time consolidated cash positions across every bank and entity, payment orchestration with approval workflows, and bidirectional ERP integration via the Connectivity Hub that keeps accounting data and treasury data synchronised without manual re-entry.
