Microsoft 365 makes collaboration easy, but open sharing quickly turns into a security risk if guest users are not managed correctly. Discover best practices to secure external access, minimize risk, and govern guest identities with CoreView.
Managing external access in Microsoft 365 is critical to maintaining data security and collaboration efficiency. This guide explains how to set up secure guest user management in M365 — from configuring external collaboration settings in Microsoft Entra ID, to managing guest onboarding, offboarding, and inactive user lifecycle.
We’ll also cover guest user sharing best practices, highlight common limitations of Microsoft’s native tools, and show how CoreView automates and streamlines guest user workflows to save time and reduce security risks.
Collaboration using Microsoft 365 is now the norm and one of the things that makes Microsoft 365 a popular productivity choice and ubiquitous. M365 is particularly useful for collaboration with users outside your organization, as it’s easy and seamless to grant access. But there’s a big downside to all this sharing – with every shared document, Teams meeting, or SharePoint folder, your Microsoft 365 tenant gains potential entry points for threats. The convenience of sharing quickly becomes an M365 guest account management headache.
Imagine that someone from your team adds an external user (someone outside your organization) to your Microsoft 365 tenant. This would seem like an ideal way to ease collaboration between internal and external M365 users. But not if done incorrectly. What happens when the project ends? Did you plan for offboarding these guest users or making sure you have rescinded permissions to access the files you shared externally? Unfortunately, these are often afterthoughts, which can come at a high cost.
Insecure identity and access are widely acknowledged as top cloud security risks, with the Cloud Security Alliance citing insecure identities as the primary cause of cloud-related breaches in 99% of organizations and Microsoft’s 2024 State of Multicloud Security Report stating that many attack paths originate in identity/credential issues, which then lead to data exposure to unauthorized users.
It's critical to remember that guest users are one very important type of identity in Microsoft 365, and guest access to M365 resources needs to be managed as carefully as all other identity provisioning. After all, open access to a single Microsoft Office file can be all that’s needed to expose your company’s data.
Best practice guest governance must be applied to prevent the kinds of risk external users can pose. Guest user governance is the process of ensuring that only the right guests have just enough access to the right, specific Microsoft 365 resources.
You can determine the type of access a guest needs when you review their tasks in a project.
For example, contract customer support personnel may need customer order history but do not require admin privileges or access to global sales data. Overprivileging internal or guest users is a problem; understanding access management needs and privilege level by user function will help you protect your Microsoft 365 resources from increased cyber threats like phishing attacks and privacy breaches.
This clip highlights how excessive internal privileges — and simple administrative mistakes — can disrupt business operations just as severely as cyberattacks.
Mismanaged guest users are one of the top causes of data exposure incidents in Microsoft 365, according to reporting from The Register. A 2023 Mandiant report examining 550 million data records highlighted that upwards of 17% of business-critical data sent to third parties inappropriately was done through external oversharing practices and too much guest user access.
In this clip, we explore how Microsoft 365’s privileged environment amplifies risk — and why traditional access controls struggle to prevent privilege escalation.
Whether it’s a forgotten vendor account still active months after a project ends or excessive or overly broad sharing permissions, these gaps represent live and virtually invisible risk.
That’s why it’s crucial to implement not just Microsoft 365 security best practices but also more specific secure guest user management — not just at the policy level, but in daily practice.
This article covers:
Let’s start with a step-by-step walkthrough for configuring Microsoft 365 guest user management and access control using Microsoft Entra ID and Microsoft 365 Admin Center.
Your first line of defense lies in Entra ID’s External Collaboration settings, which define how guest users can interact with your tenant.
This ensures only authorized, traceable guest invitations are made, minimizing the risk of unapproved external accounts.
Microsoft Entra Entitlement Management allows you to create Access Packages that define what resources guests can access and for how long.
By assigning guests to Access Packages, you enforce the principle of least privilege and maintain auditable control over every collaboration touchpoint.
To prevent long-term accumulation of inactive or over-permissioned guests, use Access Reviews.
This automates your Zero Trust control cycle: verify explicitly, use least privilege, and assume breach.
Conditional Access (CA) ensures guests meet specific security requirements before accessing your data.
This ensures that even approved guests cannot bypass identity or device-level security.
Guest access frequently extends to file collaboration in SharePoint and OneDrive.
Guest onboarding is your opportunity to enforce security and compliance from the start and ensure best practices for managing guest access securely.
CoreView customers automate this entire onboarding process — creating access packages, triggering notifications, and enforcing MFA — without manual admin steps. As a 2025 Kuppinger Cole Executive View report states, “Manual identity provisioning inevitably leads to configuration inconsistencies and permission accumulation that create both security risks and operational inefficiencies.” Or, automate wherever you can.
As Microsoft 365 environments scale to thousands of users, automation becomes not just efficient but indispensable for managing security and configuration at scale.
Just as critical as onboarding is ensuring secure offboarding when collaboration ends. You want to ensure that you don’t allow external guest users to edit and manage content in the organization after they are no longer associated with you.
These actions prevent orphaned accounts — one of the most common compliance gaps in guest management.
Inactive guest users can accumulate quickly and increase your attack surface. Deactivating inactive guest users proactively and in a timely fashion is part of following best practices for managing guest access securely.
Combine this with Access Reviews and Conditional Access logs for a full picture of inactive user risk.
Effective collaboration shouldn’t come at the expense of data security. These best practices help balance usability and protection — with clear steps for implementation.
Use Access Packages or Security Groups to ensure guests can only access specific apps, Teams, or SharePoint sites.
Require MFA for every external sign-in via Conditional Access.
How to enable MFA for guests:
Restrict external sharing links to expire after a set period (e.g., 7 days).
Admin Center → SharePoint → Policies → Sharing → “Set expiration for sharing links”
Implement recurring reviews to confirm that each guest still requires access.
If guests must access internal apps, use Conditional Access App Control and Cloud App Security (Defender for Cloud Apps) for session-level monitoring.
Example: Limit guests’ ability to download files from internal business apps while allowing browser-based viewing.
Adopt a “never trust, always verify” mindset by validating each guest’s identity, device, and session context before access.
While Microsoft 365 provides strong governance foundations, admins often face key pain points:
These limitations make it difficult to scale governance across multiple tenants or business units. But CoreView can help remove these limitations.
CoreView takes Microsoft’s strong foundation and elevates it into a fully automated governance layer, including a number of clear benefits for organizations with Microsoft 365 at their core:
By integrating with Entra ID and Microsoft 365, CoreView helps organizations enforce Zero Trust principles at scale — while saving admins hours of manual work each week.
Managing guest access in Microsoft 365 is not optional; it’s a core security best practice. By combining Microsoft Entra’s governance capabilities with automation from CoreView, organizations can confidently enable external collaboration without compromising security, control or compliance.
Read more about securing your M365 environment by managing and securing guest users. Download our “12 Smart Ways to Manage and Secure External Users in Your M365 Tenant” white paper.
