Multi-Factor Authentication and Dynamics 365 Business Central

The use of Multi-Factor Authentication (MFA) to secure user accounts is becoming a more common practice.  While regular sign-in and use of Business Central is compatible with MFA, there are certain features that require special configuration.

There are several different ways to setup and manage MFA for your environment depending on what licenses you have.  You can find more information about that here:
Getting started with MFA

The ‘SMTP Email’ and the ‘Dynamics 365 for Sales synch’ features will not work with MFA without using an App Password.  An App password is a password that can be used to sign in with a specific user that will by-pass MFA.  This feature is specifically meant for use with applications\features that are not compatible with MFA.
Azure App Password Setup
Office 365 App Password Setup

There is a free way for any tenant to enable MFA for their entire organization called Baseline Conditional Access Policy.
Baseline Policies

If you use these, they will apply a blanket MFA policy to your entire organization.  These policies cannot be bypassed and do not allow for App passwords to be used.  If you enable these, you will break your SMTP\Sales Synch functionality.

If you wish to use MFA along with the Business Central features listed above, it will require you to be able to manage MFA on a per-user basis.
Per user MFA

If you have any questions or issues related to the use of MFA with Business Central, please speak to your partner or open a support case.