Quick Answer
To set up email in Business Central, search for Set Up Email (assisted setup), choose an account type — Microsoft 365, Current User, or SMTP — sign in, set it as the default account, and send a test email. For most people the Microsoft 365 connector is the best choice because it uses secure OAuth automatically. Important: as of 2026, old SMTP Basic Authentication is being retired, so avoid it for new setups.
18+ years implementing Dynamics NAV & Business Central
Business Central can email invoices, sales orders, statements, and notifications straight to your customers but only after you set up an email account. The setup used to be a simple username and password, but Microsoft has tightened security, so the modern way is a little different (and much safer).
In this guide, we’ll set up email in Business Central step by step, explain which account type to choose, cover settings for popular email services, and walk through fixing the most common errors. Everything in plain English. Let’s get started.
⚠️ Important 2026 Update – Read This First
Microsoft is retiring old SMTP Basic Authentication (simple username + password) for Exchange Online. Because of this, the recommended setup today is the Microsoft 365 or Current User connector, which use secure OAuth automatically. If your Business Central still has an old SMTP account, it’s time to replace it — SMTP accounts can’t be converted, they must be recreated as a Microsoft 365 account.
📋 In This Guide
- The 3 Email Account Types (Which to Choose)
- Prerequisites – Before You Start
- Step by Step – Set Up Email
- Set the Default Account & Email Scenarios
- Send a Test Email
- Settings for Popular Email Services
- Troubleshooting Common Errors
- Fix: SMTP Error Code 535 (Authentication Incorrect)
- How to Set Up Gmail (and Fix Gmail 535 Errors)
- FAQ
Table of Contents
The 3 Email Account Types (Which to Choose)
Business Central offers three ways to send email. Here’s what each one does and who it’s best for:
| Account Type | Best For & How It Works |
|---|---|
| Microsoft 365 | The recommended choice. Sends from one shared mailbox (like sales@yourcompany.com) for the whole company. Uses secure OAuth automatically — no password stored, nothing to migrate later. |
| Current User | Each user sends email from their own signed-in Microsoft 365 mailbox. Great when you want emails to come from the individual staff member. Also uses secure OAuth. |
| SMTP | The older method, and for non-Microsoft mail servers. Being phased out for Microsoft 365 due to Basic Auth retirement. Only use if you have a specific non-Microsoft mail server or a special requirement. |
💼 From 18 Years in the Field
For 95% of companies, the Microsoft 365 connector with a shared mailbox is the right answer. It’s the most reliable, it survives Microsoft’s security changes, and everyone in the company sends from one professional address. Only reach for SMTP if you genuinely can’t use Microsoft 365 mail.
Prerequisites : Before You Start
Make sure these are ready before you begin:
- Admin permissions in Business Central : you need permission to run assisted setup and manage email accounts
- A Microsoft 365 mailbox : for the Microsoft 365 or Current User connector (a shared mailbox like
info@yourcompany.comworks well) - “Send As” permission on the shared mailbox : the person setting it up must already be able to send as that mailbox in Outlook. If Outlook can’t send as it, Business Central can’t either.
- The email connector app installed : on Business Central Online these are ready by default; on-premises may need the email connector apps installed first
- For SMTP only : your mail server address, port, and (ideally) an Azure app registration for OAuth
📋 Quick Test First
Before setting up the shared mailbox in Business Central, open Outlook Web and try sending an email as that mailbox. If it works in Outlook, it will work in Business Central. If it doesn’t, fix the mailbox permission first — this saves hours of troubleshooting.
Step by Step : Set Up Email in Business Central
The easiest path is the built-in assisted setup guide. Here’s how:
- Press Alt + Q and search for “Set Up Email”, then choose the assisted setup
- (Or search “Email Accounts” and click New → Add an email account)
- Choose the account type for most people, pick Microsoft 365
- Click Next
- Enter the account name and the email address of your shared mailbox (like
sales@yourcompany.com) - Click Next Business Central asks you to sign in and give consent
- Sign in with an account that has permission to send as that mailbox, and accept the consent prompt
- Finish the wizard
💡 No Authenticate button? That’s normal for the Microsoft 365 account type — it uses OAuth automatically during the test. If you see SMTP server fields like smtp.office365.com, you accidentally picked the SMTP type instead. Go back and choose Microsoft 365.
Set the Default Account & Email Scenarios
Business Central needs one default email account, even if you only have one. The default is used for every email scenario that isn’t assigned to a specific account.
- Search for “Email Accounts” via Alt + Q
- Select your account and choose Set as default
Email Scenarios (Optional but Powerful)
You can send different types of email from different accounts. For example, invoices from accounts@ and sales quotes from sales@. This is done with Email Scenarios:
- On the Email Accounts page, select an account and choose Email Scenarios → Assign Scenarios
- Pick which scenarios (like “Sales Invoice”, “Sales Quote”, “Notification”) should use this account
- Save
📌 Replacing an old SMTP account? After you create the new Microsoft 365 account, you must reassign the scenarios to it and then delete the SMTP account. Business Central won’t automatically switch to the new account — you have to point the scenarios at it yourself.
Send a Test Email
Always confirm it works before relying on it.
- On the Email Accounts page, select your account
- Choose Send Test Email
- Enter a recipient address you can check
- Send it and confirm the email arrives
If it arrives, you’re done — Business Central can now email documents and notifications. If it fails, jump to the troubleshooting section below.
Settings for Popular Email Services
If you’re using the SMTP connector with a non-Microsoft provider, you’ll need that provider’s server details. Here are the common ones. (Remember: for Microsoft 365 you should use the Microsoft 365 connector, not these SMTP settings.)
| Service | SMTP Server | Port | Security |
|---|---|---|---|
| Microsoft 365 / Outlook | smtp.office365.com (use the M365 connector instead) | 587 | STARTTLS / OAuth |
| Gmail / Google Workspace | smtp.gmail.com | 587 | STARTTLS |
| Yahoo Mail | smtp.mail.yahoo.com | 465 / 587 | SSL / STARTTLS |
| Zoho Mail | smtp.zoho.com | 465 / 587 | SSL / STARTTLS |
| SendGrid | smtp.sendgrid.net | 587 | STARTTLS |
| Amazon SES | email-smtp.[region].amazonaws.com | 587 | STARTTLS |
⚠️ Gmail & Yahoo note: These providers no longer accept your normal login password for SMTP. You must create an App Password (after enabling two-factor authentication) and use that in Business Central instead of your real password. A plain password will fail.
Troubleshooting Common Email Errors
Here are the errors people hit most often and how to fix them:
| Error / Symptom | How to Fix It |
|---|---|
| “SMTP is still in use” warning | One of your email accounts is still an SMTP account. Create a new Microsoft 365 account, reassign the scenarios to it, then delete the SMTP account. |
| SMTP 535 authentication failed | Basic Auth is disabled. Switch to the Microsoft 365 connector. For Gmail/Yahoo, use an App Password, not your normal password. |
| “You aren’t authorized to access this resource” | Happens with service-to-service (S2S) authentication and the Microsoft 365 / Current User connectors when sending documents. If you need S2S, use the SMTP connector for those scenarios. |
| Test email “blocked” during setup | On some environments the outbound connection is blocked the first time. Re-run the test — it usually succeeds on the second attempt once the connector is registered. |
| Can’t send as the shared mailbox | The setup user needs “Send As” permission on that mailbox. Confirm they can send as it in Outlook Web first — if Outlook can’t, Business Central can’t either. |
| Password missing after copying a company | When you copy a company using an SMTP account, the password isn’t copied. Re-enter it on the SMTP Account page (or better, switch to Microsoft 365). |
| Emails not sending automatically | Check the Email Outbox for stuck messages, confirm a default account is set, and make sure the right scenario is assigned to a working account. |
📋 Real Project Note
The single most common email support ticket I see is the “SMTP still in use” warning. The fix is always the same: SMTP accounts can’t be converted — you create a fresh Microsoft 365 account, move the scenarios over, then delete the old SMTP one. Do it in that order and the warning disappears for good.
Fix: “SMTP Error Code 535 : Authentication Data is Incorrect”
This is the most common email error in Business Central right now, so it deserves its own section. The full message usually reads:
The SMTP server rejected the authentication request, as the authentication data is incorrect. Verify that your Username and Password are correct and that the SMTP server supports the specified authentication type (Basic). SMTP error code: 535. Status code: 535.
What This Error Really Means
Notice the key word in the message: Basic. Your email account is trying to sign in with Basic authentication — the old username-and-password method. Microsoft has now disabled Basic authentication for SMTP in Exchange Online, so the server rejects the login and returns error 535. In other words, the problem usually isn’t a wrong password at all — it’s that the whole Basic sign-in method is no longer allowed
⚠️ Don’t waste time resetting the password. Because the cause is the retired Basic auth method, re-typing the password won’t help. The real fix is to switch the account away from SMTP Basic auth.
The Fix (Recommended – Switch to Microsoft 365 Connector)
For Business Central Online, the cleanest solution is to replace the SMTP account with a Microsoft 365 account, which uses secure OAuth automatically:
- Press Alt + Q and search for “Email Accounts”
- Click New → Add an email account and choose Microsoft 365
- Enter your shared mailbox address and sign in / give consent when prompted
- Go to Email Scenarios and reassign all scenarios from the old SMTP account to the new Microsoft 365 account
- Set the Microsoft 365 account as the default
- Delete the old SMTP account (there’s no “inactive” option — it must be removed)
- Send a test email to confirm it works
If You Must Keep Using SMTP
If you have a specific reason to stay on SMTP (for example, a non-Microsoft mail server), you have two options:
- Set up SMTP with OAuth 2.0 — register an app in Azure and configure the SMTP connector to use OAuth instead of Basic auth. This is the modern, supported way to keep SMTP.
- Use a provider that allows an App Password — for Gmail or Yahoo, enable two-factor authentication and generate an App Password, then use that instead of your normal password.
⚙️ On-premises note: Business Central on-premises (versions 18 through 27+) supports SMTP with OAuth using an Azure app registration. If you’re on-prem and hitting 535, reconfigure the SMTP account to authenticate via OAuth rather than Basic.
💼 From 18 Years in the Field
When a client suddenly gets error 535 “out of nowhere,” it’s almost always because Microsoft flipped off Basic auth for their tenant — not because anyone changed a password. I stop looking at credentials immediately and go straight to switching the account to the Microsoft 365 connector. It fixes it permanently, and there’s no password to break again later.
How to Set Up Gmail with Business Central (and Fix Gmail 535 Errors)
Many small businesses run Business Central email through a Gmail or Google Workspace account. Gmail works, but there’s one catch that trips almost everyone up: Gmail no longer accepts your normal Google password for SMTP. If you enter your regular password, you’ll get the same authentication rejection (error 535). The solution is a Gmail App Password.
Why Your Normal Gmail Password Fails
Google turned off “less secure app” access. So when Business Central tries to sign in to Gmail’s SMTP server with your everyday password, Google rejects it. Instead, Google wants a special 16-character App Password that you generate just for Business Central. This only works if 2-Step Verification is turned on for the Google account.
Step 1 : Turn On 2-Step Verification
- Go to your Google Account at myaccount.google.com
- Open the Security section
- Under “How you sign in to Google,” turn on 2-Step Verification and follow the prompts
You must do this first App Passwords only appear as an option once 2-Step Verification is active.
Step 2 : Create a Gmail App Password
- Still in your Google Account, go to Security
- Search for or open App passwords (at myaccount.google.com/apppasswords)
- Enter a name like
Business Centraland click Create - Google shows a 16-character password copy it (you won’t see it again)
📌 Copy it carefully: Google displays the App Password with spaces (like abcd efgh ijkl mnop), but you enter it into Business Central without the spaces. This is the single most common Gmail setup slip-up.
Step 3 – Enter Gmail’s SMTP Settings in Business Central
- In Business Central, press Alt + Q and search “Email Accounts”
- Click New → Add an email account and choose the SMTP option
- Fill in the Gmail SMTP details below
- In the Password field, paste your 16-character App Password (not your normal Gmail password)
- Save and send a test email
| Setting | Value |
|---|---|
| SMTP Server | smtp.gmail.com |
| Port | 587 |
| Authentication | Basic (with the App Password) |
| Secure Connection (TLS) | On (STARTTLS) |
| User Name | your full Gmail address (e.g. yourname@gmail.com) |
| Password | the 16-character App Password (no spaces) |
Still Getting a Gmail 535 Error? Check These
- ❌ You used your normal password : replace it with the App Password. This fixes it 90% of the time.
- ❌ 2-Step Verification is off : App Passwords won’t work (or even appear) until it’s turned on.
- ❌ Spaces left in the App Password : enter the 16 characters with no spaces.
- ❌ Wrong port : use 587 with TLS (or 465 with SSL). Port 25 usually won’t work.
- ❌ Google Workspace admin block : on Workspace accounts, an admin may need to allow SMTP/App Passwords for the organization
📋 Real Project Note
For small businesses on Gmail, the App Password method works reliably. But if you also have Microsoft 365, prefer the Microsoft 365 connector — it uses OAuth and never needs a password refreshed. App Passwords can be revoked or expire, so for long-term stability, Microsoft 365 is the lower-maintenance choice.
FAQ : Email Setup in Business Central
Which email account type should I use in Business Central?
For most companies, the Microsoft 365 connector with a shared mailbox is best it’s secure, reliable, and uses OAuth automatically. Use Current User if you want each person’s emails to come from their own mailbox. Only use SMTP for non-Microsoft mail servers or special requirements.
Is SMTP still supported in Business Central?
SMTP still exists, but Microsoft is retiring the old Basic Authentication (username + password) for Exchange Online. For new setups you should use the Microsoft 365 or Current User connectors, which use modern OAuth and aren’t affected by the retirement.
Why do I get an “SMTP is still in use” warning?
It means one or more of your email accounts is still set up as an SMTP account. Because SMTP accounts can’t be converted, you create a new Microsoft 365 account, reassign the email scenarios to it, and then delete the SMTP account to clear the warning.
Do I need a default email account?
Yes. Business Central requires one default email account, even if you only set up one. The default is used for all email scenarios that aren’t assigned to a specific account.
Can I send different documents from different email addresses?
Yes. Use Email Scenarios. You can assign, for example, sales invoices to an accounts mailbox and sales quotes to a sales mailbox, so each type of email comes from the right address.
Can I use Gmail with Business Central?
Yes, through the SMTP connector using smtp.gmail.com on port 587 with TLS. However, Gmail no longer accepts your normal password for SMTP — you must turn on 2-Step Verification and create a 16-character App Password, then enter that App Password (with no spaces) in Business Central instead of your real password. On Google Workspace accounts, an admin may also need to allow SMTP/App Passwords for the organization.
Why does my test email fail the first time but work the second time?
On some environments the outbound connection is blocked until the connector is fully registered. Simply run the test email again — it usually succeeds on the second attempt.
Do I need an Azure app registration to send email?
Not for the Microsoft 365 or Current User connectors they handle authentication for you. You only need an Azure app registration for advanced SMTP-with-OAuth scenarios or cross-tenant setups.
Why won’t Business Central send as my shared mailbox?
The user setting it up must have “Send As” permission on that mailbox. Test it in Outlook Web first if you can send as the mailbox there, Business Central will work too. If not, fix the mailbox permission first.
How do I fix SMTP error code 535 in Business Central?
Error 535 means the SMTP server rejected the login because it used Basic authentication, which Microsoft has disabled for Exchange Online. Resetting the password won’t help. The fix is to replace the SMTP account with a Microsoft 365 account (which uses OAuth automatically), reassign your email scenarios to it, set it as default, and delete the old SMTP account. If you must keep SMTP, configure it to use OAuth 2.0 via an Azure app registration, or use an App Password for providers like Gmail or Yahoo.
Final Thoughts
Setting up email in Business Central is quick once you pick the right account type. For almost everyone, that’s the Microsoft 365 connector with a shared mailbox secure, reliable, and future-proof against Microsoft’s authentication changes. Run the assisted setup, set your default account, assign your scenarios, and send a test email.
If you’re still on an old SMTP account, now is the time to move. Create a fresh Microsoft 365 account, reassign your scenarios, and delete the SMTP one. A few minutes of work now keeps your invoices, quotes, and notifications flowing without interruption.
Stay tuned to NavisionPlanet for more simple, step-by-step Business Central guides drawn from real project experience.
Note: Microsoft’s authentication timelines and connector options can change. For the latest official details, check Microsoft Learn or confirm with your Business Central partner before making changes to a live environment.
