Microsoft 365 / How to Create User Accounts and Assign Licenses

Microsoft 365 user accounts can be created in the admin center at Users → Active users → Add a user. Set the account name and initial password, select the usage location and necessary product licenses, and then save. Just creating an account does not mean you can use email or Office apps immediately, so you need to check both the license and service status.

Things to decide before creating an account

• Login Name: Use a unique account tied to the actual employee. If you first set the domain and username naming convention, it will reduce the need for modifications later.
• Display Name and Contact Information: Match it with the organization's HR information, but check items that may be publicly visible.
• Usage Location: Set it according to the actual country or region of use, as it may affect license allocation.
• License: Check whether the product SKU (stock-keeping unit, identifying the exact product configuration) includes the services required for the role, and whether there are available seats.
• Authentication: Prepare the initial password delivery method and the multifactor authentication (MFA) registration procedure. Do not include the password in a routine onboarding email.

According to Microsoft’s Instructions for Adding Users and Assigning Licenses, user and license management permissions are required. Organizations synchronizing from on-premises Active Directory may have items that cannot be modified directly in the cloud management center, so first check the account source.

This procedure is based on company or school accounts created directly in the cloud. In organizations where on-premises Active Directory is the account source, first check whether existing employees are scheduled to be synchronized. Creating the same person separately in the cloud may cause conflicts with accounts and email addresses or split data between the two accounts.

The username is the UPN (User Principal Name) used for logging in. The display name is the name shown in the address book, and the mail alias is an additional receiving address. For example, even if the display name is "Min-su Kim," the login uses the full address set by the organization. If the desired domain is not in the selection list, check whether you first need to complete verification of the company domain first.

Creating a User and Assigning a License

1. After logging into the Microsoft 365 admin center with the appropriate admin role, go to Users → Active users.
2. Press Add a user and enter the name, display name, username, and domain. Make sure the address does not overlap with existing users.

3. Review the initial password creation method and whether a password change is required at first login. Do not deploy the account first if a secure delivery method has not been determined.
4. Specify the usage location and select the necessary licenses. After selecting the product, also check the on/off status of individual services.

5. Do not assign admin roles if the user is a regular employee under role settings. After checking the necessary groups and contact information, save the creation result.
6. Verify that the new account can sign in and that the required mail and apps are available. Mailbox provisioning and license changes may take time to apply.

Reviewing one example user before saving

Let's assume we are registering one office employee. The display name should match the HR record, and the username should follow the company's unique naming convention. The usage location is selected as the actual country/region, and if desktop Office and company mail are needed, choose the product with the corresponding rights. The following table is not instructing the purchase of specific products but is a criterion for reviewing input results.

Do not leave the initial password and the user's login information together in a publicly accessible task sheet or public messenger. Multi-Factor Authentication (MFA) verifies identity using two or more authentication factors, as explained in Microsoft’s MFA overview. Requesting a password change alone cannot replace MFA registration, so provide guidance for registration and recovery paths according to the organization's authentication policy.

First login and service verification after creation

1. Administrator check: Refresh the active user list and verify all addresses and licenses. Simply closing the creation wizard does not mean that all services are ready.
2. User login: Do not reuse an open browser session of an existing employee account. Log in with a new profile or incognito window. Let the user complete the initial password change and register the required authentication methods themselves.
3. Email verification: If an email license has been assigned, check if the mailbox opens in Outlook for the web and send and receive internal and external test emails. If the mailbox is still being prepared, do not repeatedly remove the license; check for errors and status instead.
4. Check files and apps: Make sure you can create and save documents in the required apps. If the install button is missing or activation fails, compare whether the selected product has installable app rights.

If the department files are not visible even when the service is open, check group and site permissions separately from user creation. Account, license, and data access are each different verification items. If you are handling the entire onboarding process, also check the handover criteria in the onboarding setup procedure (Korean).

Changing an existing user’s licenses

Open Active users, select the target, and open Licenses and apps. Before making changes, record the current license and service list, and then make modifications. Turning off services may alter the retention or deletion schedule of the data the user had access to. Do not treat this as a simple cost-saving task; first confirm the scope of impact on mail, files, and apps. If applying the same rules to multiple people, you can review the requirements and licensing conditions for group-based assignment.

To check the assignees for each product, you can use the Billing → Licenses → Select Product path. If the same product is purchased through multiple subscriptions, the total on the product screen and the quantities for each individual subscription may be displayed differently. You also need to check whether the license is assigned directly or received from a group to determine the target for modification. Microsoft License Assignment and Error Guide explains both paths and how to check for errors.

If a user can log in but cannot open a specific app, examine account issues and license issues separately. By first checking the license assignment status on the active users screen, service activation status, and any modification errors, you can reduce unnecessary password resets.

What to correct when an error occurs

• Duplicate username: Check existing users, deleted users, and emails in use. Do not create a new account for someone who already has one under a new name.
• License assignment failure: Check for insufficient seats, incorrect usage location, and conflicting service plans. After correcting the cause of the error, reprocess the assignment and read the success status again.
• Locked name/property in gray: Check if it is a synchronized account and request changes from the original directory administrator.
• Incorrectly selected app: Restore only the necessary items based on the list before the change. Deleting and re-creating a user is not a routine way to undo settings.