Is Dynamics CRM a Capital Expense or Operating Expense?

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There are many ways to compare the pros and cons of Microsoft Dynamics CRM Online vs On-Premise. Tax ramifications are not usually considered, but they should be.

  • Microsoft Dynamics CRM Online is a monthly subscription cost. This is an operating expense.
  • Microsoft Dynamics CRM On-Premise is a large upfront cost with a small annual maintenance fee. This is a capital expense.

For example, you could have one big upfront payment of $1,000 per user license plus a 20% maintenance fee every year versus spending $65.00 for that license per month, forever.

In my experience larger companies tend to buy their Microsoft Dynamics CRM licenses, as a capital expense, versus renting it. If you list your CRM system as operating expense, over time it's a very expensive option. If you capitalize the cost you just reduced your tax base.

Before purchasing Microsoft Dynamics CRM, or any new technology, you should look at the tax advantages plus government incentives for different types of investments.

So let your IT and Sales teams debate the value of the cloud. But make sure that your Finance team has the chance to give their vote on operating expense vs capital expense when choosing your Microsoft Dynamics CRM system.

If you are comparing Microsoft Dynamics CRM Online vs On Premise, and want honest advice, contact AbleBridge. 877-600-2253 or

By AbleBridge, Microsoft Dynamics CRM Gold Partner,