Microsoft Dynamics 365 Business Central 2026 Release Wave 1 introduces practical changes across AI, finance, administration, manufacturing and supply chain management.
The release runs from April to September 2026. One theme runs through many of the updates: Business Central is starting to take a more active role in day-to-day work. Copilot and AI agents can interpret information, prepare records and move a controlled process towards its next stage instead of waiting for a user to enter every detail manually.
Manufacturing and distribution customers also have changes worth examining. Subcontracting and quality management sit more closely alongside production, while the revised drop-shipment process makes it easier to connect sales demand with supplier purchasing.
That does not mean every customer should enable every feature. The useful question is simpler: which update fixes a real operational problem, and are the organisation's data, permissions, integrations and extensions ready for it?
Three key takeaways
Business Central AI is moving into operational processes. The Payables Agent can collect invoice attachments and prepare purchase documents for review, while other tools allow AI agents to support defined tasks.
Business Central manufacturing is becoming more capable. New subcontracting and quality-management functions can bring more production activity into one ERP environment.
Preparation still matters. A Business Central assessment should review data quality, data governance, permissions, extensions and approval controls before new automation reaches a production system.
What is Microsoft Dynamics 365 Business Central?
Microsoft Dynamics 365 Business Central is a cloud ERP platform for small and mid-sized organisations. It brings finance, sales, purchasing, inventory, warehousing, manufacturing, projects and service management into one application.
When it is implemented well, Business Central reduces the need to run core processes through separate accounting packages, spreadsheets and departmental systems. Finance and operational teams work from the same customer, supplier, item and transaction records, so they are less likely to be comparing different versions of the truth.
Business Central also connects with Microsoft Power BI, Power Automate, Power Apps, Microsoft 365 and external applications. Integration therefore needs to be designed as part of the wider Microsoft business applications environment, not treated as an isolated technical task at the end of the project.
Microsoft's 2026 Release Wave 1 overview describes Business Central as an AI-powered application that is moving towards more autonomous and insight-led processes.
How is Business Central becoming an AI-driven ERP?
ERP systems have traditionally recorded work after someone completes it. A user posts an invoice, updates an order or reports production activity, and the system stores the transaction.
Business Central AI changes part of that relationship. Copilot can help a user find, compare, analyse and summarise information. An agent can go a step further: it can watch for an input, interpret it and prepare the next action within a process the organisation has approved.
For example, a Business Central agent could monitor a shared mailbox, read an invoice attachment, identify the supplier and prepare a purchase document. It could then route that document for review and retain a record of the work it completed.
People still control the boundaries. Finance and operational teams decide what an agent can access, which actions it may take and where approval is required.
The aim is not to make every process autonomous. It is to remove repetitive work without weakening financial control, data governance or accountability.
The Business Central Payables Agent
The Payables Agent shows what this looks like in a familiar finance process.
It can monitor a connected Microsoft 365 mailbox for vendor invoices, import supported PDF attachments and use document-recognition technology to extract relevant information. It then prepares purchase invoice documents in Business Central for a user to review.
In practice, the agent can monitor a dedicated accounts-payable inbox, collect vendor invoice attachments, extract the relevant information and match senders with registered vendors. It can then prepare draft purchase invoices for validation before they enter the organisation's normal approval process.
Microsoft's Payables Agent documentation explains that the agent focuses on the time-consuming work around overhead invoices. It prepares transactions for review rather than giving the system unrestricted authority to post them.
Why the Payables Agent matters
Accounts-payable teams can spend hours moving information from email attachments into an ERP. The task is repetitive, but errors still matter: they can affect VAT treatment, account coding, dimensions, approvals and supplier payments.
A well-configured Payables Agent could reduce that manual effort by making invoice processing more consistent, identifying exceptions earlier and improving the route from receipt to approval. Finance employees can spend less time entering routine information and more time reviewing unusual, incomplete or higher-risk transactions.
The quality of the result still depends on the Business Central finance setup underneath it. An agent cannot compensate for poor vendor data or accounting rules that nobody has agreed.
What should be reviewed before deployment?
Before enabling the Payables Agent, a Business Central consultant should review vendor master data, general ledger mappings, posting groups, dimensions and duplicate-invoice controls. Approval tolerances, user permissions, mailbox security and segregation of duties also need to be clear, together with the route for handling exceptions and completing human review.
Testing should take place in a sandbox using a representative selection of invoices. That includes clean documents, poor scans, duplicate invoices, unknown vendors and documents containing incomplete information.
This is where a structured Business Central health check is more useful than simply switching on the latest feature.
Custom AI agents and Microsoft Copilot Studio
Microsoft is also opening more routes for partners and technical teams to create AI capabilities around Business Central.
Microsoft Copilot Studio can be used to build agents that connect with Business Central data and processes. Developers can also extend the platform through supported development tools and integrations.
A custom agent still needs proper technical design. The team must identify the Business Central tables and processes involved, the information the agent requires and the operations it may perform. They also need clear answers for authentication, incomplete data, exception escalation, human confirmation and ownership after deployment.
A simple agent may be created through guided or low-code tools. A more involved process could still require AL development, Microsoft Power Platform, Dataverse or a purpose-built Business Central integration.
A narrow process with a clear owner and a measurable result is usually the best place to start. Broad automation becomes difficult to govern when the organisation has not yet agreed the controls around it.
Agent supervision and data governance
An AI-enabled ERP process needs a reliable audit trail. The record should show what the agent tried to do and what happened next.
Administrators and process owners should be able to establish which records the agent accessed, what it created or changed and whether the task succeeded. When something fails, the audit trail should show where user intervention was required, why the exception occurred and who reviewed or approved the result.
Every agent needs an accountable business owner. Its permissions should follow the same least-privilege principle used elsewhere in the ERP, and sensitive finance or purchasing actions should keep their normal approval controls.
Data governance is particularly important when Business Central connects with Microsoft 365, Microsoft Power Platform, CRM, e-commerce or other external systems. The organisation needs to know where data moves, which system owns it and who can act on it.
Managing Business Central through MCP
The Business Central Admin Centre Model Context Protocol server provides another route for working with AI.
MCP gives compatible AI tools a standard way to discover approved Admin Centre operations. An administrator or Business Central support partner may use an AI-enabled tool to check an environment and propose an administrative action.
An administrator might use it to check update status, review available upgrades, list installed extensions or examine update history. It may also support tasks such as copying an environment to a sandbox, investigating a failed upgrade and proposing an appropriate next step.
For support teams, this could make routine environment administration easier and reduce the need to write a separate script for every task.
The Business Central Admin Centre MCP server was introduced in public preview. It keeps users in control through confirmation steps, but organisations should still review authentication, permissions and operational support before using it.
Business Central manufacturing and supply chain updates
AI is only one part of the release. Microsoft is also investing in Business Central manufacturing and supply chain management, with particular attention given to subcontracting and quality management.
Business Central already supports production bills of material, routings, production orders, work centres, capacity planning and material requirements planning. These manufacturing functions sit alongside inventory, purchasing, sales, warehouse activity, production consumption, output and manufacturing costing.
Microsoft's Business Central manufacturing documentation explains how production BOMs, routings and work centres support planning and production execution.
For some manufacturers, the 2026 updates extend processes they already run in Business Central. Others may be able to retire spreadsheets or small applications that currently sit beside the ERP.
Improved drop-shipment processes
A drop shipment allows a business to sell an item that a supplier delivers directly to the customer.
Business Central now provides a more direct route for creating purchase orders from drop-shipment sales orders. Users can access a Create Purchase Orders action from the sales order, while the Planning Worksheet includes actions for finding and processing relevant sales demand.
Sales and purchasing teams can create linked purchase orders more quickly without losing the connection between customer demand and supplier supply. They also spend less time re-entering data or moving between the sales order and planning pages.
A Business Central distribution or e-commerce operation should still test pricing, dimensions, partial deliveries, returns and integration behaviour before adopting the revised process.
Subcontracting in Business Central manufacturing
Many manufacturers send part of the production process to an external supplier. Heat treatment, coating, machining, assembly and specialist testing are common examples.
Enhanced subcontracting functionality allows more of this activity to be managed within Business Central manufacturing. Purchasing and production teams can maintain a clearer connection between the external operation, supplier activity and the related production order.
Keeping this information in the ERP gives purchasing and manufacturing teams a clearer view of outsourced production. Supplier activity, production planning and subcontracting costs are easier to trace, and fewer details have to be maintained in offline spreadsheets.
The feature became generally available during the 2026 release wave and requires administrator, analyst or consultant configuration. Current availability is listed in Microsoft's Business Central planned-features register.
A Business Central manufacturing consultant should review existing routings, work centres, vendor arrangements, costing methods and extensions before the feature is introduced.
Quality management in Business Central
Quality management is another important addition for manufacturers and distributors.
It allows quality activity to sit closer to the inventory and production transactions it relates to. Depending on the process and configuration, users can define quality requirements, record inspections, evaluate goods and materials and document the result.
Organisations can record inspection requirements consistently, evaluate purchased and manufactured items and compare the results with agreed standards. When goods do not conform, the inspection history remains connected to the relevant operational record instead of disappearing into a separate spreadsheet or paper file.
The value depends on how well the system reflects the real quality process. Inspection points, measurements, tolerances, responsibilities and escalation routes need to be agreed before configuration begins.
Organisations operating under formal quality standards should also assess whether standard Business Central functionality meets their audit requirements or whether an industry-specific extension is still required.
Does your organisation need a Business Central upgrade?
Most customers will not need every feature in the 2026 release. An upgrade review should begin with the processes causing the most work or risk, not with Microsoft's full feature list.
An effective Business Central assessment should consider the current version, existing extensions and every significant integration point. It should also examine data quality, user permissions, security, governance, manufacturing and warehouse processes, reporting requirements, training needs and expected business growth.
That assessment gives the implementation partner a basis for deciding which features to test now, which to postpone and whether any existing customisation can be removed.
Organisations moving from Dynamics NAV can use the same review to inform a NAV to Business Central migration. Existing customisations, data history and integrations should be assessed before a migration scope or delivery date is agreed.
What should Business Central customers do next?
- 1.Confirm the current Business Central version, deployment model and relevant feature availability.
- 2.Identify the operational problem each proposed feature is expected to solve.
- 3.Assess extensions, integrations, master data, roles and segregation of duties.
- 4.Test the process in a sandbox, including failure and exception scenarios.
- 5.Train affected users and agree who owns the process after deployment.
- 6.Monitor performance, controls and user feedback once the change is live.
Copilot and agent capabilities are intended for Business Central Online customers. Business Central licensing, feature availability and regional support should be confirmed before implementation.
Work with a Dynamics 365 Business Central partner in the UK
InteliSense IT is a Microsoft Dynamics 365 Business Central partner helping UK organisations implement, integrate, upgrade and support Microsoft business applications.
Our Business Central consultants work across implementation, manufacturing, finance, inventory, warehousing and integration. We also support Business Central migrations, upgrades, training, health checks, managed support and longer-term ERP roadmap development.
A Business Central implementation partner needs to understand the business before configuring the software. That means examining how finance, purchasing, inventory, manufacturing and reporting work today, where control is weak and which processes are genuinely worth changing.
If Business Central is already live, our Business Central support and managed services teams can help review underused functionality, unstable integrations, extensions and upcoming Microsoft updates.
If you are replacing a legacy ERP or planning a Dynamics NAV upgrade, we can assess the existing system, data and customisations before recommending a Business Central migration route.
Frequently asked questions
What is Dynamics 365 Business Central?
Dynamics 365 Business Central is Microsoft's cloud ERP platform for finance, sales, purchasing, inventory, manufacturing, projects and service management.
What is Business Central Copilot?
Business Central Copilot provides AI-assisted tools that help users find information, analyse data and complete supported work more efficiently.
What does the Business Central Payables Agent do?
The Payables Agent collects supported vendor invoice attachments, extracts relevant information and prepares purchase invoice documents for human review.
Is Business Central suitable for manufacturing?
Business Central manufacturing supports BOMs, routings, production orders, capacity planning, material planning and costing. The 2026 release adds further support for subcontracting and quality management.
Can Business Central integrate with other systems?
Yes. Business Central integration can connect the ERP with Microsoft Power Platform, Power BI, CRM, e-commerce, EDI, warehouse technology and other business applications.
What is a Business Central health check?
A Business Central health check reviews the configuration, data, extensions, integrations, permissions, performance and use of an existing environment. It identifies risks and opportunities for improvement.
When should an organisation use a Business Central consultant?
A Business Central consultant can help with implementation, migration, upgrades, process design, integration, support, training and the controlled introduction of AI or automation.
How do we choose a Business Central partner in the UK?
Look for a partner with relevant product knowledge, sector experience and a clear delivery method. The partner should assess process fit, data, integrations, testing, training and support rather than concentrating only on system configuration.
Start with a Business Central assessment
The 2026 release gives Business Central customers several useful options. Enabling all of them is not a strategy.
Start with the places where manual work, poor data or disconnected systems are creating delays or risk. Then test whether the new functionality solves that problem without weakening control.
InteliSense IT can review the current environment, assess readiness for Business Central Copilot and the manufacturing updates, and build a practical roadmap around the processes that need to improve.
Speak to InteliSense IT about a Microsoft Dynamics 365 Business Central assessment.
Feature availability, licensing and release dates can change. Review Microsoft's current documentation before making implementation decisions.
