A Microsoft 365 business account is a work or school account, not a personal Microsoft account. That is why Windows can show “Microsoft account doesn’t exist” even though Outlook works.
Use the business account in one of these supported ways:
- In Windows, go to Settings > Accounts > Access work or school.
- Select Connect.
- If the device supports organization sign-in, use the option to join the device to the organization account, then sign in with the business email.
- Restart the device and sign in with the work account if prompted.
If the goal is to make that account an administrator on the Windows device after it has been added:
- Open Settings > Accounts > Other user.
- Under Other users, select the account.
- Select Change account type.
- Choose Administrator and select OK.
If the goal is to make the account a Microsoft 365 admin for the company tenant, that must be done in the Microsoft 365 admin center by an existing admin. The person who signs up for Microsoft 365 for business automatically becomes the technical administrator, and admins can add other admins later.
Also note:
- A work or school account looks like
******@contoso.comor******@contoso.onmicrosoft.com. - It is different from a personal Microsoft account used for consumer services.
- New Microsoft 365 users are created in the Microsoft 365 admin center under Users > Add user.
References:
- What is my user ID and why do I need it for Office 365 for business?
- Add more users and licenses
- Manage User Accounts in Windows
- Sign up for Microsoft 365 Business Basic
- New Microsoft 365 Business Standard Account not recognised - Microsoft Q&A
- Unable to create account by using Microsoft work email - Microsoft Q&A
- Sign in with my Work account says 'That Microsoft account doesn't exists' - Microsoft Q&A