Sage 50 Accounts (UK and Ireland) and Sage 200 emailing invoices with Microsoft 365: email through Microsoft 365 after Basic auth ends

Short answer: Sage 50 Accounts v31 and later can send through Webmail with Modern (OAuth) sign-in to a Microsoft account. On v30 or earlier, and in Sage 200, Sage's answer for Microsoft accounts is to send through classic Outlook. SMTP with a Microsoft 365 password fails once Basic auth is off.

Deadline: Microsoft 365 turns off SMTP AUTH Basic auth by default at the end of December 2026 – dates and background.

Modern authentication (OAuth) support

Sage 50 Accounts v31.0 added modern authentication (OAuth) for Microsoft accounts: in Settings → Email Defaults → Email Client choose Email Program Webmail and Modern (OAuth), then authorise with the button in Login Details, which opens a browser sign-in. The same options are in Report Designer. Sage doesn't say whether this covers Microsoft 365 work or school accounts as well as Outlook.com, which Microsoft permissions it requests, or whether tenant admin consent is needed: not documented. Sage 200 (Professional and Standard) documents no OAuth option; for Microsoft accounts Sage says to send using Outlook. Sage says sending through MAPI or Microsoft Outlook isn't affected by the SMTP authentication changes, so the Basic auth switch-off doesn't touch it. It has to be classic Outlook: Sage says the new Outlook isn't compatible with Sage software.

What you will see when it breaks

Sending through Internet Mail (SMTP) or Webmail with a Microsoft account and password stops working (Sage: those senders are affected by the SMTP authentication changes; MAPI and Outlook senders aren't)
"535 5.7.3 Authentication unsuccessful" or "5.7.57 Client not authenticated to send mail" (Microsoft Learn: the SMTP AUTH login is refused)
Emailing from Sage stops working after switching to the new Outlook (Sage: the new Outlook isn't compatible; revert to classic Outlook)
"Emails sent using SMTP settings don't appear in your Inbox or Sent Items." (Sage: normal for SMTP, not a fault)

Best fix

Check how Sage sends today. Sage 50 Accounts: Settings → Email Defaults, Email Program Microsoft Outlook or Webmail. Also check layouts in Report Designer (Tools → Options → Email Setup): a Default Provider of Internet Mail (SMTP) with a Microsoft 365 address and password is Basic auth and fails once Microsoft turns it off by default at the end of December 2026. The free SMTP AUTH sender script shows whether the mailbox Sage uses still logs in over SMTP AUTH.
Sage 50 Accounts v31 or later: Settings → Email Defaults → Email Client tab, Email Program Webmail, select Modern (OAuth), click the button in Login Details and sign in through your browser. Click Apply, then OK.
Move Report Designer layouts that use Internet Mail (SMTP) to the same Webmail and Modern (OAuth) settings, or to Microsoft Outlook. Settings on a layout override Email Defaults.
Sage 50 Accounts v30 or earlier: set Email Program to Microsoft Outlook in Email Defaults, set up each layout tab, click Apply, select the layouts and click OK. Choose Save emails to mailbox or Send emails immediately. Sage recommends upgrading to v31 or later.
Sage 200: Tools → Run Sage Report Designer → File Explorer → Default → Layouts → Report → Email Settings, set Mail Provider to Microsoft Outlook. Do it for each layout. Classic Outlook must be installed on each workstation that sends.
Make Outlook the default email program in Windows and test with Send To → Mail Recipient. Run Outlook and Sage with the same Run as administrator setting.
Once nothing sends through SMTP any more, turn Authenticated SMTP off for that mailbox: Outlook doesn't use SMTP AUTH. Leave it on if you use Webmail with Modern (OAuth), since Sage doesn't document which protocol that uses.

If it can't do OAuth

A relay connector is not a documented option for Sage. Sage's Webmail login offers only the logged-on user or a username and password, and its SMTP setup asks for a password. Use classic Outlook or Webmail with Modern (OAuth) instead.
App passwords are no way out: Sage says Microsoft doesn't support App Passwords for SMTP.
Stopgap only: an admin can turn Basic auth for SMTP AUTH back on for now. It ends when Microsoft removes it for good; the date is due in the second half of 2027. See the SMTP AUTH change.

Sage 50 Accounts OAuth (v31.0 or later)	`Settings > Email Defaults > Email Client > Email Program: Webmail > Modern (OAuth) > authorise in Login Details`
Sage 50 Accounts Outlook	`Settings > Email Defaults > Email Program: Microsoft Outlook (classic Outlook only)`
Sage 50 SMTP per layout	`Report Designer > Tools > Options > Email Setup > Internet Mail (SMTP) > Configure`
Sage 200 Outlook per layout	`Tools > Run Sage Report Designer > File Explorer > Default > Layouts > Report > Email Settings > Mail Provider: Microsoft Outlook`
New Outlook for Windows	`Not compatible with Sage software (Sage)`
Microsoft 365 work or school accounts with Modern (OAuth)	`Not documented (Sage says Microsoft accounts)`
Microsoft permissions / admin consent	`Not documented`
Relay connector (no-login SMTP)	`Not documented`

Check your domain's SPF and DMARC

A relay sends from your office IP, so it must be in your SPF record.

Several devices to move? The Microsoft 365 SMTP Fix Kit puts every printer, scanner, app and script on one printable guide: decision table, relay connector set-up, per-device steps, a sender worksheet and a checklist.

Get the kit ($19)

Rather have it done for you? I move your devices and apps on Fiverr – relay, Direct Send or OAuth, tested, from $25.

Sources

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