Microsoft Dynamics 365 Business Central 2026 Release Wave 2 (version 29) brings quite a few changes, from new Copilot and AI agent capabilities to improvements in manufacturing, financial reporting, and everyday usability. Microsoft is also introducing some bigger changes around how Business Central connects to other systems and how customers can keep track of upcoming features.
There are several features in this release that I’m particularly excited about. Some were introduced in version 29, while others are being rolled out through subsequent updates. Let’s take a closer look at what’s included, what these changes mean for Business Central users, and a few things I’d recommend paying attention to.
In this article
- How Microsoft is changing Business Central updates
- Copilot and AI agents
- Administration and master data management
- Financial management and reporting
- Manufacturing, warehouse, and subcontracting
- Microsoft Fabric and Business Central
- Shopify connector improvements
- Everyday usability improvements
- Watch the webinar on demand
Microsoft is changing how it announces Business Central updates
Before getting into individual features, I want to highlight a change Microsoft has made to how it announces upcoming Business Central capabilities.
Microsoft is moving its release plans to the new AI at Work roadmap, which brings feature announcements from its cloud products into one place. You can search and filter by product, see which features are in development or rolling out, and keep track of when new capabilities are expected to become available.
Now, this doesn’t mean Business Central is going to stop receiving its regular major updates. Microsoft is moving away from the twice-yearly release-wave announcement model, but the Business Central team still plans to deliver two major updates each year, along with monthly cumulative updates. What’s changing is how Microsoft publishes and maintains information about upcoming features.
I like this approach because you no longer have to wait for a major release announcement to find out what’s coming. You can monitor the roadmap as new features are committed, check their status, and plan ahead. For administrators and business leaders responsible for keeping Business Central current, that’s a welcome improvement.
Copilot and AI agents are becoming part of everyday Business Central work
There’s a lot happening with AI in this release. What stands out to me isn’t just the introduction of new agents, but how Microsoft is making those agents easier to work with and manage inside Business Central. We’re starting to see more attention given to how people and agents work together, including how users review what agents have done.
The new Expense Agent
The Expense Agent is currently in public preview, and it’s a good example of how Microsoft is bringing AI into everyday business processes. The idea is pretty straightforward: an employee submits a receipt, the agent extracts the information, categorizes the expenses, checks the company’s configured policies, builds an expense report, and sends it through the approval process.
Employees can submit expenses through Outlook, Teams, Copilot Chat, or directly in Business Central. There’s also a new mobile app for iOS and Android that supports offline receipt capture, which is particularly useful for employees traveling or working somewhere without reliable internet access. The Expense Management module and mobile app are included with Business Central, although processing expenses through the AI agent consumes credits. Catch the Expense Agent on-demand webinar here.
A more familiar Copilot Chat experience
Microsoft is also bringing the unified Copilot Chat experience into Business Central. If you’ve used Copilot in Outlook, Word, or Teams, you’ve probably noticed that Business Central’s chat interface looks a little different. With version 29, Microsoft is updating that experience to make it more consistent across applications.
That’s a nice usability improvement, especially for organizations already adopting Copilot across Microsoft 365. Users can work with a more familiar interface, and Business Central continues to respect their assigned permissions when retrieving information.
Better control over what AI agents are doing
One of the challenges with AI agents is understanding what they’re doing, what they’ve changed, and when they need someone to step in. Microsoft has introduced several improvements to address that, including a centralized task pane for reviewing agent activity and new indicators showing when an agent is waiting for human input.
Users can also see whether a person or agent created or changed a record, making it easier to understand what’s happening within a process. Permissions are becoming easier to manage as well. If an agent doesn’t have the access required to complete a task, it can request additional permissions rather than simply failing, although an authorized administrator still needs to approve that access.
These are the kinds of improvements that become increasingly important as organizations start using more agents in their daily processes. It’s one thing to have an agent perform a task; it’s another to make sure people can understand, review, and control that work.
Administration and master data management improvements
There are some useful updates for Business Central administrators, developers, and Microsoft partners in this release. Administrators can now manage extension installations and updates through the Business Central admin center, including scheduling installations. Microsoft has also introduced the ability to temporarily configure a sandbox with production-like database performance, which is useful when testing extensions, rehearsing upgrades, or preparing for go-live.
The Business Central MCP server is getting improvements as well. New data-query capabilities allow compatible AI tools to define and run queries against Business Central data without requiring a custom API for every scenario. Microsoft has also made it easier for administrators to manage MCP server availability from one place, giving them more centralized control over how AI tools connect to Business Central.
If you’re interested in exploring these capabilities, Microsoft has published Business Central MCP server documentation that walks through the setup and available functionality.
Cross-environment master data management
This is probably one of my favorite additions in the release.
Business Central has supported master data synchronization between companies within the same environment for some time. Now Microsoft is expanding that capability across separate Business Central environments within the same Microsoft 365 tenant, which opens up some useful possibilities for organizations operating across multiple locations or countries.
Let’s say you have a headquarters company and several subsidiaries operating in different countries. Those subsidiaries may need separate Business Central environments because of localization requirements, but you still want consistent customer records, vendor information, items, and core setup data. Previously, maintaining that information across environments could require additional tools, customizations, or manual work.
With cross-environment master data management, headquarters can maintain the authoritative information, and subsidiary companies can retrieve the master data they need. That means less rekeying information across environments and a more consistent source of data across the organization. It can also make setting up additional companies or environments much easier.
Financial management and reporting updates
Microsoft has made several changes to financial management in this release, including some that are still in preview. These changes address specific transaction and tax scenarios, along with broader improvements to how finance teams create and manage reports.
For self-billing, Business Central is adding support for vendor-specific invoice number series. This is useful when suppliers require their own numbering conventions, rather than sharing a single number series across all self-billed invoices. Microsoft is also expanding electronic document support for self-billed invoices.
For organizations dealing with excise taxes, Business Central will support assigning multiple excise duties to a single item. For example, a product could be subject to both a sugar tax and a plastic packaging tax, each with its own rate. Withholding tax support is also being expanded to certain employee transactions, such as reimbursements and payments subject to withholding requirements.
These capabilities won’t apply to every Business Central customer, but they’re important changes for organizations operating in countries or industries with these requirements. Several are still moving through preview and rollout, so I’d recommend checking availability before making plans to use them in production.
Easier report and document design
There are some particularly useful improvements to reporting and document layouts. Microsoft is introducing composite document layouts, which allow you to combine themes, headers, footers, and document bodies without writing code.
Think about how often a company logo, address, or other standard information appears across invoices, sales quotes, and purchase documents. Instead of maintaining those elements separately across multiple layouts, composite layouts make it easier to manage common information consistently. When something changes, you don’t necessarily have to update every individual report layout.
The Business Central Word add-in is also getting a significant update. New data pickers, table builders, and conditional controls make it easier to create document layouts without manually mapping XML fields. You can also show or hide certain sections based on the data, such as hiding a discount column when no discount applies.
Financial reporting improvements include better management of account categories, the ability to run multiple reports into a single PDF, and additional change logging for financial report setups. For finance teams responsible for maintaining reports and customer-facing documents, these improvements should make ongoing maintenance easier while providing more control over the information users see.
Manufacturing, warehouse, and subcontracting enhancements
A lot of the manufacturing updates in version 29 are usability improvements. Microsoft has made navigation easier between planning worksheets, production orders, work centers, bills of materials, and routings. These changes reduce the number of steps required to move between related manufacturing records, which is especially helpful when you’re working through planning and production activities throughout the day.
Warehouse-enabled locations can also support direct transfer orders without requiring an in-transit location when one isn’t necessary. Previously, that could mean extra steps just to move inventory directly between two locations. Quality management improvements also reduce manual steps involved in testing and inspections across receiving, production, assembly, and inventory.
Subcontracting continues to improve
Microsoft introduced new subcontracting capabilities earlier in 2026, and it’s continuing to build on them. The core functionality allows manufacturers to send components to subcontractors, manage warehouse handling and item tracking, and receive completed goods back into Business Central. This is an important area for manufacturers that outsource portions of their production but still need visibility into materials and finished goods.
With Wave 2, Microsoft is adding improvements such as carrying routing instructions onto subcontracting purchase orders, supporting inventory picks and put-aways in basic warehouse configurations, and providing setup guidance to identify missing configurations. These enhancements build on the initial functionality and make subcontracting more practical for additional manufacturing scenarios.
One recommendation I’d make here is to install the subcontracting application in a sandbox first. It’s an application you add from AppSource, and Microsoft is still expanding its functionality. Before enabling it in production, I’d want to understand how it interacts with your existing manufacturing processes and make sure everything works as expected.
Microsoft Fabric and Business Central data
Another area I’m particularly interested in is Microsoft’s native connection between Business Central and Microsoft Fabric. If you’re not familiar with Fabric, it’s Microsoft’s unified data platform for storing, processing, analyzing, and reporting on information from different systems.
With the new Business Central capability, organizations will be able to mirror selected Business Central data into Microsoft Fabric’s OneLake environment. You can choose which companies and tables you want to make available rather than copying your entire Business Central database. That data can then be used with Power BI, combined with information from other systems, or made available for AI scenarios.
For example, if your organization needs to report across Business Central and other business applications, this opens up opportunities to bring that information together without building a separate custom export process for every reporting requirement. It also provides a foundation for more advanced analytics and AI scenarios that require information from multiple business systems.
At the time of this webinar, the capability was scheduled to enter preview in November 2026, with general availability planned for April 2027. I’m looking forward to getting my hands on this one and exploring more of the reporting and AI scenarios it can support. It’s an area I’ll be watching closely as Microsoft continues developing the functionality.
Shopify connector improvements
For organizations using Shopify with Business Central, Microsoft has made several enhancements to the connector. These include expanded B2B capabilities, additional catalog and pricing synchronization options, improved exchange handling, and more control over how Shopify transactions are created as Business Central documents.
The connector also supports synchronizing additional customs information, such as tariff numbers and country of origin. Microsoft is working on an AI-powered tax-matching agent as well. Rather than calculating taxes, the agent will suggest how Shopify tax lines should map to the appropriate tax jurisdictions in Business Central, with a user reviewing and approving those suggestions.
There’s also an important deadline to be aware of. The older Shopify connector API is supported only through December 31, 2026. If you’re using the connector, make sure your Business Central environment is updated appropriately before that deadline so you don’t risk disrupting the connection to your Shopify store.
Small usability improvements worth knowing about
I also want to call out a few of the smaller improvements because these are often the ones users notice most in their everyday work. Business Central now makes it easier to find recently used customers, vendors, items, and other records through lookup lists. The Tell Me search also remembers recently accessed pages and reports, making it faster to return to the areas you use most often.
You can preview image attachments directly within Business Central instead of downloading them first. Additional record information makes it easier to identify who created or modified a document, including whether an agent was involved. These are relatively small changes, but they address some common frustrations when you’re moving between records throughout the day.
Payment journals are also getting a batch balance field to help users review totals before processing payments. That particular improvement was still scheduled for rollout when I presented the webinar, but it’s another example of Microsoft making everyday tasks a little easier.
Watch the Business Central 2026 Wave 2 webinar
I’ve covered quite a bit here, but there are more details worth exploring, especially if you’re responsible for managing a Business Central environment or deciding which new features to adopt. In the webinar, I walk through the updates, explain which capabilities are available now or coming later, and demonstrate several of the usability improvements directly in Business Central.
Microsoft also has more than 30 sessions covering Business Central features and enhancements in its Business Central learning resources. They’re a useful place to explore individual capabilities in more detail or share information with your team.
Where should you start with Business Central 2026 Wave 2?
My recommendation is not to try to enable every new feature just because it’s available. Start by looking at the processes where your team spends the most time or encounters the most friction, and identify which updates could make a meaningful difference.
If you’re exploring AI, take a closer look at the new agents and the governance capabilities that support them. If you’re in manufacturing, review the subcontracting and warehouse improvements. And if reporting is a challenge, the updates to document layouts and Microsoft Fabric may be worth exploring.
I’d also encourage you to keep an eye on Microsoft’s new AI at Work roadmap as additional capabilities are released. Some of these features are still in preview, and availability will continue changing as Microsoft rolls out updates.
If you have questions about any of these changes or want to understand how they might work in your Business Central environment, reach out to our team at BCS. We’re always happy to talk through the options and help you determine what makes sense for your business.
