The Pros & Cons of Using Employee Cards in Business Central

Back in 2018, Microsoft introduced the Employee Card to Business Central. This card and related features opened additional options for companies when dealing with how to track and pay their employees.

In the past, paying employees meant setting them up as vendors in Business Central. While this allowed companies to pay their employees through the payment journal, it also opened employee information to anyone with access to the vendor tables. Security is a major issue if employees are set up as vendors. Social security numbers, birthdates, addresses, and banking information became visible to anyone with access to the vendor card, making confidentiality an issue. Some companies did start using security filters to limit who could see certain vendor cards, but not all companies added this feature.

Using Employee cards allowed companies to keep that information more easily separate and more secure. Partners providing third-party applications, such as payroll and expense reimbursement, also started using employees within their apps versus using the vendor card.

To determine the best way to navigate this, users should evaluate the pros and cons of using Employee Cards in Microsoft Dynamics 365 Business Central

Pros

• Centralized employee information: Employee Cards provide one place to store key employee details, such as name, address, job title, contact information, employment dates, related posting groups, and banking information. This helps keep employee data organized and easier to maintain.
• Useful for expense and reimbursement processing: Employees can be set up as payees for expense reimbursements, travel advances, or other employee-related payments. This can be cleaner than creating every employee as a vendor.
• Separation from vendors: Using Employee Cards keeps employees distinct from external vendors. That can improve reporting, reduce confusion, and support better internal controls.
• Integration with purchasing and approvals: Employee records can be used in workflows, approvals, expense handling, and responsibility tracking depending on the setup and extensions in use.
• Better audit trail: Transactions tied to employees can make it easier to see who requested, incurred, or should be reimbursed for expenses.
• Supports HR-adjacent information: Although Business Central is not a full HR system by default, Employee Cards can store basic employee-related data useful for finance and operations.

Cons

• Limited HR functionality: Employee Cards are not a replacement for a dedicated HR or payroll system. They do not provide robust capabilities for benefits, performance management, recruiting, timekeeping, or advanced employee lifecycle management.
• Setup and maintenance overhead: Employee records must be created, maintained, and kept current. If employees also exist in payroll, HR, Microsoft 365, or another system, duplicate maintenance can become an issue.
• Privacy and security considerations: Employee records may contain sensitive personal information. Permissions need to be carefully managed so users only see the employee data they need.
• Not always necessary: If the company only needs to pay employees through payroll or track them in another HR system, using Employee Cards in Business Central may add complexity without much benefit.
• Configuration can affect accounting: If employee posting groups, payment methods, or reimbursement processes are not configured correctly, transactions may post to the wrong accounts or create reconciliation issues.

Final Thought

Using Employee Cards when you need to track employee-related financial activity inside Business Central (especially reimbursements, advances, or expenses) provides better security for employee data, in addition to the other benefits outlined above.