Future Proof Your BC Email Setup: How to Configure Email Accounts the Right Way Today

Microsoft continues to retire legacy authentication methods across its cloud services, and SMTP Basic Authentication is one of the biggest items on that list. Thankfully, Business Central already includes a modern email framework that avoids these issues entirely, as long as your email accounts are set up correctly.

This guide walks through the recommended approach for configuring email in Business Central so your environment remains secure, compliant, and ready for future updates. If you build it the right way now, you avoid unexpected warnings or email failures later.

Why the Modern Approach Matters

Historically, many Business Central and NAV implementations used SMTP based email accounts. Today that pattern has risks:

• SMTP Basic Authentication is being retired.
• Microsoft is encouraging all apps to use OAuth.
• Business Central supports Microsoft 365 Graph based email natively.
• SMTP accounts are considered legacy and cannot be converted to Microsoft 365 accounts.
• A single SMTP account in your system can trigger retirement warnings.

The best way to ensure stability is straightforward:

Use Microsoft 365 email accounts exclusively and avoid SMTP accounts entirely.

Step 1: Understand the Two Email Account Types

When you open Email Accounts in Business Central, each account will be one of these types:

Microsoft 365 Account (Preferred)

• Uses OAuth automatically.
• Sends using Microsoft Graph.
• Shows no SMTP server fields.
• Does not store passwords in Business Central.
• Is fully supported going forward.

SMTP Account (Legacy)

• Uses SMTP protocol.
• Requires server names, ports, and credentials.
• Is treated as an outdated configuration.
• Can trigger update or retirement alerts even if unused.
• Should not be created in new implementations.

If the page caption says SMTP Account, it is legacy. If it says Microsoft 365 Account, you are on the right path.

Step 2: Verify Send As Permissions Before Creating BC Email Account

If you are configuring a shared mailbox (for example Accounting@cynthiapriebe.com or Accountspayable@cynthiapriebe.com), the Microsoft 365 permissions must be correct first.

The person configuring email in Business Central should:

• Have Send As permission for the shared mailbox.
• Have Read and manage rights for the shared mailbox.
• Be able to send an email as that mailbox from Outlook Web or Outlook Desktop.

A quick way to confirm this:

1. In Outlook, create a new email.
2. Change the From field to the shared mailbox.
3. Send a message to yourself.
4. If it arrives from the shared mailbox, permissions are correct.

If Outlook cannot send as the shared mailbox, Business Central will not be able to either.

Step 3: Create a Microsoft 365 Email Account in Business Central

Once permissions are correct, set up the account in Business Central.

1. Open Email Accounts.
2. Select New.
3. Choose Microsoft 365 as the account type (this is the default in the wizard).
4. Enter the shared mailbox email address.
5. Save the account.
6. Select Send Test Email.

There is no separate Authenticate button. The Microsoft 365 account type uses OAuth automatically during the test.

Important: If you see SMTP server fields such as smtp.office365.com or a port number, you selected the wrong account type.

Step 4: Enable Outgoing HTTP Requests (One Time Step)

In many environments that have never used the Microsoft 365 email integration before, the first test email fails with a message similar to:

The request to send email has been blocked. Enable outgoing HTTP requests for the Email – Outlook REST API app on the Extension Management page.

This is expected. Business Central is now trying to send using Microsoft Graph, but the extension that calls Microsoft 365 is blocked from making outbound HTTP requests.

To allow it:

1. Search for Extension Management in Business Central.
2. Open the extension Email – Outlook REST API (Publisher: Microsoft).
3. Select Configure.
4. Turn Allow HttpClient Requests to On.
5. Save your changes.
6. Return to Email Accounts and run Send Test Email again.

Once this option is enabled, Business Central can send mail using Microsoft Graph.

Step 5: Assign Email Scenarios to the Microsoft 365 Account

Business Central uses Email Scenarios to decide which account sends which type of email, such as:

• Sales documents.
• Purchase documents.
• Job communications.
• Reminders.
• Posting and finance notifications.

Each scenario can be linked to only one email account at a time.

This has an important consequence:

• If a scenario is still assigned to an old SMTP Account, Business Central will continue to use SMTP for that scenario.
• A Microsoft 365 account in Email Accounts has no effect until at least one scenario is assigned to it.

To use the modern setup consistently, make sure all relevant scenarios are assigned to the Microsoft 365 account, not to any SMTP account.

Step 6: Remove Any SMTP Accounts Still in the System (If Applicable)

Because the Microsoft 365 wizard is now the default, you will not create an SMTP account by accident during initial setup. However, SMTP accounts can still be present for several reasons:

• Someone manually chose SMTP Account during testing.
• A previous consultant added one before you.
• An environment was copied from another tenant or sandbox.
• A NAV to Business Central migration brought SMTP settings forward.

If an SMTP account exists in Email Accounts, even if it is not used, Business Central and Microsoft treat your environment as still using SMTP.

Why deleting SMTP accounts matters:

• Prevents update or renewal warnings about SMTP retirement.
• Prevents SMTP authentication errors if a scenario is still assigned to the legacy account.
• Prevents any fallback to SMTP behavior during sending.
• Removes confusion about which account Business Central is actually using.

When this step applies:

• Delete SMTP accounts only if they appear in your Email Accounts list.
• If you never created an SMTP account, you can skip this step.

Step 7: Final Verification

Your Business Central environment is fully modernized when:

• All active email accounts are Microsoft 365 Accounts.
• No SMTP Accounts remain in Email Accounts.
• Test Email succeeds for each account.
• Email Scenarios point to the correct Microsoft 365 accounts.
• The Email – Outlook REST API extension is configured to allow HTTP requests.

Once these items are in place, your email setup is secure, aligned with Microsoft 365, and ready for future Business Central releases.

The Righter Way Summary

Business Central already knows how to speak the modern language of Microsoft 365 and Microsoft Graph. By setting up email accounts using the Microsoft 365 account type and removing any remaining SMTP accounts, you avoid the trap of legacy authentication and make your environment easier to support and upgrade.

A small investment in correct setup now can prevent disruptive email issues later.

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Created as part of Sharing the Righter Way, this article combines my Business Central experience with AI supported research and drafting. AI helps me explore options and accelerate analysis, while every conclusion and recommendation reflects my own professional judgment.