AI & Copilot Capabilities in Business Central: Intelligent Business Management

Part 6 of 8 in the Business Central Implementation Series

Published: December 2025 | Reading Time: 13 minutes

Introduction

Artificial Intelligence is transforming how businesses operate, and Microsoft has embedded AI capabilities deeply into Dynamics 365 Business Central through Copilot—an intelligent assistant that augments human decision-making and automates routine tasks. Far from replacing human expertise, AI in Business Central amplifies productivity, enhances accuracy, and provides insights that would be difficult or time-consuming to generate manually.

As you implement Business Central, understanding and configuring AI capabilities is no longer optional—it's essential for maximizing your investment. Organizations that embrace these intelligent features gain competitive advantages through faster operations, better decisions, and improved user experiences.

This comprehensive guide explores Business Central's AI and Copilot capabilities, from understanding what's available to configuring features responsibly, governing usage appropriately, and measuring impact effectively.

Introduction to AI and Copilot in Business Central

Microsoft's vision extends beyond traditional ERP functionality to intelligent business management.

Understanding Microsoft's AI Vision for ERP

The Evolution of Business Software:

Traditional ERP systems required users to:

• Manually enter all data

• Perform calculations themselves

• Create reports from scratch

• Search through records manually

• Rely entirely on memory and notes

AI-enhanced ERP systems augment these capabilities:

• Suggest data based on context and history

• Perform complex analysis instantly

• Generate content from prompts

• Surface relevant information proactively

• Learn from patterns and provide recommendations

Copilot Philosophy:

Microsoft Copilot in Business Central operates on several principles:

• Assistance, Not Replacement: AI assists humans, doesn't replace judgment

• Transparency: Users see why suggestions are made

• Control: Users always make final decisions

• Privacy: Data protection and compliance built-in

• Continuous Improvement: Copilot learns and improves over time

What is Copilot?

Copilot is Microsoft's brand for AI-powered assistance across its product portfolio. In Business Central, Copilot manifests as intelligent features embedded in daily workflows.

Copilot Characteristics:

Contextual: Understands what you're working on and provides relevant assistance

Conversational: Accepts natural language input, no technical jargon required

Generative: Creates content (text, suggestions, insights) based on your data and intent

Integrated: Embedded in standard Business Central pages and processes

Adaptive: Learns from feedback and improves suggestions

Copilot Features and Capabilities Overview

Business Central includes multiple Copilot-powered features, with Microsoft continuously adding new capabilities.

Sales Line Suggestions with Copilot

Feature Overview:

When creating sales orders, Copilot suggests products based on:

• Customer purchase history

• Seasonal trends

• Similar customer behaviors

• Current inventory levels

• Product relationships

How It Works:

1. User starts creating sales order for customer

2. Copilot analyzes customer history and context

3. AI suggests relevant items with quantities

4. User reviews suggestions

5. User accepts, modifies, or rejects suggestions

6. System adds accepted items to order

Business Benefits:

• Faster Order Entry: Reduce time to create orders

• Increased Sales: Suggest items customer might have forgotten

• Improved Accuracy: Reduce errors from manual entry

• Better Customer Service: Anticipate customer needs

• Cross-Selling: Identify complementary products

Configuration Considerations:

• Requires sufficient historical data for accurate suggestions

• Can be enabled/disabled per user or role

• Suggestion quality improves over time with usage

Marketing Text Suggestions for Items

Feature Overview:

Copilot generates compelling product descriptions for items based on attributes and context.

Use Cases:

• E-commerce product descriptions

• Catalog creation

• Sales presentations

• Marketing materials

• Customer-facing documentation

How It Works:

1. Navigate to item card

2. Select "Draft with Copilot" for marketing text

3. Copilot analyzes item attributes, category, specifications

4. AI generates engaging product description

5. User reviews and edits

6. Description saved to item record

Customization Options:

• Tone selection (professional, casual, enthusiastic)

• Length preferences (brief, medium, detailed)

• Emphasis areas (features, benefits, technical specs)

• Language selection for multi-language catalogs

Business Benefits:

• Consistent product descriptions across catalog

• Time savings—no starting from blank page

• Professional, engaging content

• Easy localization to multiple languages

• Improved e-commerce conversion rates

Bank Account Reconciliation with Copilot

Feature Overview:

AI assists in matching bank statement transactions to Business Central entries, dramatically accelerating reconciliation.

Traditional Challenge:

Bank reconciliation requires:

• Matching each bank statement line to posted entries

• Identifying corresponding payments, receipts, transfers

• Investigating discrepancies

• Manual matching is time-consuming and error-prone

Copilot Solution:

Copilot automatically:

• Analyzes bank statement lines

• Searches for matching posted entries

• Considers amount, date, description, patterns

• Proposes matches with confidence scores

• Learns from user corrections

How It Works:

1. Import bank statement

2. Copilot automatically suggests matches

3. Review suggestions (color-coded by confidence)

4. Accept, reject, or modify matches

5. Investigate unmatched items

6. Post reconciliation

Advanced Capabilities:

• Pattern recognition for recurring transactions

• Learning from historical reconciliations

• Handling partial payments and discounts

• Currency conversion matching

• Multi-bank account support

Business Benefits:

• 50-70% time reduction in reconciliation

• Improved accuracy through AI consistency

• Faster month-end close

• Early identification of discrepancies

• Reduced manual matching errors

E-Document Matching Assistance

Feature Overview:

For organizations using electronic document exchange, Copilot matches incoming e-invoices to purchase orders and receipts.

Challenge Addressed:

Traditional three-way matching:

• Purchase order vs. receipt vs. invoice

• Manual verification of quantities, prices, totals

• Time-consuming for high invoice volumes

• Prone to overlooking discrepancies

Copilot Enhancement:

AI automatically:

• Matches e-invoices to purchase orders

• Compares quantities and amounts

• Identifies discrepancies

• Suggests appropriate actions

• Flags exceptions for human review

Business Benefits:

• Automated AP processing

• Faster payment cycles

• Improved vendor relationships

• Better cash flow management

• Reduced manual effort in accounts payable

Analysis Assist for Data Insights

Feature Overview:

Copilot provides intelligent data analysis and visualization through natural language queries.

How It Works:

Natural Language Queries:

Analysis Capabilities:

• Trend identification

• Anomaly detection

• Correlation discovery

• Predictive forecasting

• What-if scenarios

Supported Areas:

• Sales analysis

• Financial performance

• Inventory optimization

• Customer behavior

• Vendor performance

Business Benefits:

• Democratized analytics—no BI expertise required

• Faster insights—minutes vs. hours or days

• Reduced dependence on IT for reports

• Data-driven decision making

• Proactive issue identification

Configuring Copilot in Your Environment

Proper configuration ensures Copilot features work effectively and align with organizational policies.

Enabling Copilot Features

System-Wide Configuration:

1. Navigate to Copilot & AI Capabilities Page:

   • Search for "Copilot & AI Capabilities"

   • Review available features

   • View status of each capability

2. Enable Desired Features:

   • Toggle individual features on/off

   • Set default states for new users

   • Configure feature-specific settings

3. Configure Data Regions:

   • Specify where AI processing occurs

   • Comply with data residency requirements

   • Balance performance with compliance

User-Level Configuration:

Administrators can control:

• Which users have access to which Copilot features

• Whether users can enable/disable for themselves

• Usage tracking and monitoring

• Feedback collection

Feature-Specific Settings:

Each Copilot capability has specific configuration options:

Sales Line Suggestions:

• Minimum confidence threshold for suggestions

• Number of suggestions to show

• Historical data range to consider

• Excluded item categories

Marketing Text:

• Default tone and style

• Content length preferences

• Language options

• Brand voice guidelines

Bank Reconciliation:

• Auto-match confidence threshold

• Date tolerance for matching

• Amount tolerance

• Learning from corrections enabled

Data Privacy and Security Considerations for AI Features

AI capabilities must be implemented responsibly with strong privacy and security controls.

Data Protection Fundamentals

Data Used by Copilot:

Copilot analyzes:

• Business Central data (transactions, master data, historical records)

• User interactions and preferences

• Document content and metadata

• External data (if integrated)

Data Not Used by Copilot:

• Data from other organizations

• Personal data outside Business Central

• Data explicitly marked as excluded

• Archived or deleted records

Data Processing Locations:

Understanding where data is processed:

• In-Region Processing: Data stays within geographic boundaries

• Azure OpenAI Service: May process data in specific regions

• Configuration Options: Administrators control data geography

• Compliance Alignment: Meets GDPR, CCPA, and other regulations

Responsible AI Principles in Business Central

Microsoft builds AI capabilities on ethical principles:

Fairness:

• AI should treat all users equitably

• Suggestions don't discriminate based on protected characteristics

• Algorithms audited for bias

Reliability & Safety:

• AI operates consistently and predictably

• Safeguards prevent harmful outputs

• Human oversight for critical decisions

Privacy & Security:

• Data protection built-in from design phase

• Encryption in transit and at rest

• Access controls and audit logging

Inclusiveness:

• AI benefits users of all abilities

• Accessibility features integrated

• Multiple interaction modes

Transparency:

• Users understand when AI is involved

• Explanations provided for suggestions

• Feedback mechanisms available

Accountability:

• Microsoft responsible for AI behavior

• Clear escalation paths for issues

• Continuous monitoring and improvement

Copilot Data Usage and Retention

What Happens to Your Data:

During AI Processing:

• Data temporarily accessed for analysis

• Processed by Azure OpenAI Service

• Results returned to Business Central

• Processing data not retained long-term

Learning and Improvement:

• User feedback improves suggestions

• Aggregate patterns enhance algorithms

• Individual data not used to train foundational models

• Organization data remains isolated

Data Retention:

• Business Central data retention policies apply

• Copilot interaction logs maintained per compliance requirements

• Users can request data deletion

• Administrators control retention periods

Enabling and Disabling Copilot Features by User/Role

Granular control ensures appropriate access to AI capabilities.

Permission-Based Control:

Permission Sets: Create or modify permission sets to control Copilot access:

"COPILOT - FULL": All Copilot features "COPILOT - SALES": Sales-related AI features only "COPILOT - FINANCE": Financial AI features only "COPILOT - NONE": No Copilot access

Role-Based Access:

Align Copilot features with job responsibilities:

Sales Representatives:

• Sales line suggestions ✓

• Marketing text ✓

• Analysis assist ✓

• Bank reconciliation ✗

Accountants:

• Bank reconciliation ✓

• E-document matching ✓

• Analysis assist ✓

• Sales line suggestions ✗

Warehouse Staff:

• Limited or no Copilot access

• Focus on operational efficiency

Configuration Steps:

1. Define Copilot access strategy by role

2. Create/modify permission sets

3. Assign to users or user groups

4. Test access in sandbox environment

5. Document access decisions

6. Review and adjust based on usage

Dynamic Enablement:

Some features can be controlled by:

• User preferences (user chooses to enable)

• Administrator override (force enable/disable)

• Feature flags (gradual rollout)

• A/B testing (compare with and without)

Training Users on AI-Assisted Workflows

User adoption determines AI feature success.

Training Approach:

Introduction to AI Concepts:

• What is AI and how does it help?

• Copilot vs. traditional features

• When to trust AI suggestions

• How AI improves over time

Feature-Specific Training:

For each Copilot capability:

• Feature purpose and benefits

• How to activate and use

• Interpreting suggestions and confidence scores

• Accepting, modifying, or rejecting AI input

• Providing feedback to improve

Hands-On Practice:

• Guided exercises with sample data

• Real scenarios from users' daily work

• Troubleshooting common questions

• Tips and tricks for efficiency

Training Materials:

• Video tutorials (2-3 minutes per feature)

• Quick reference cards

• Interactive simulations

• FAQs and knowledge base articles

Ongoing Support:

• Copilot champions in each department

• Regular tips and tricks emails

• Lunch-and-learn sessions

• Feedback collection and sharing

Azure OpenAI Service Integration

Understanding the technical foundation of Copilot capabilities.

Azure OpenAI Service:

Microsoft's enterprise-grade AI platform provides:

• Large language models (GPT-4, GPT-3.5)

• Secure, compliant infrastructure

• Integration with Microsoft products

• Customization capabilities

Business Central Connection:

Business Central communicates with Azure OpenAI:

• API calls for AI processing

• Data sent securely encrypted

• Results returned to Business Central

• No model training on customer data

Benefits of Azure OpenAI:

• Enterprise Security: Microsoft's security infrastructure

• Compliance: Meets regulatory requirements

• Performance: Low latency, high availability

• Scalability: Handles varying loads

• Updates: Access to latest AI models

Administrative Considerations:

• Monitor API usage and costs

• Configure geographic processing preferences

• Review security and compliance settings

• Plan for capacity during peak usage

Custom AI Scenarios Using Power Platform

Extend AI capabilities beyond built-in features.

AI Builder Integration

AI Builder Overview:

Power Platform's AI Builder enables custom AI models:

• Prediction Models: Forecast outcomes

• Form Processing: Extract data from documents

• Object Detection: Identify objects in images

• Text Classification: Categorize text automatically

• Sentiment Analysis: Understand customer sentiment

Business Central + AI Builder Scenarios:

Invoice Processing:

• AI Builder extracts data from invoice images

• Power Automate validates and creates purchase invoices

• Business Central posts invoices automatically

Quality Inspection:

• AI Builder analyzes product images

• Object detection identifies defects

• Business Central records quality results

Customer Sentiment Tracking:

• AI Builder analyzes customer emails/feedback

• Sentiment scores stored in Business Central

• Alerts for negative sentiment

Power Automate AI Capabilities

AI-Powered Automation:

Power Automate includes AI features:

• Text analysis: Extract key phrases, language detection

• Cognitive services: Image analysis, speech-to-text

• AI prompts: GPT-powered content generation

• Predictive models: ML-based decision making

Integration Examples:

Intelligent Document Routing:

Smart Notifications:

Power BI AI Insights

Embedded AI in Power BI:

Power BI provides AI-powered analytics:

• Key Influencers: Identify factors driving metrics

• Anomaly Detection: Spot unusual patterns

• Q&A: Natural language queries

• Smart Narratives: Auto-generated insights

• Decomposition Tree: Drill into data intelligently

Business Central + Power BI AI:

Sales Analysis:

• Power BI connects to Business Central data

• Key Influencers identifies sales drivers

• Anomaly detection spots unusual patterns

• Insights inform strategy

Financial Analysis:

• Decomposition tree explores variances

• Q&A enables natural language queries

• Smart narratives auto-generate commentary

• Embedded in Business Central for easy access

Measuring AI Adoption and Effectiveness

Track AI impact to demonstrate value and guide improvements.

Adoption Metrics:

Usage Statistics:

• Number of active Copilot users

• Feature usage frequency

• Acceptance rate of suggestions

• Time spent with AI features

User Engagement:

• Copilot feature activation rate

• Returning user rate

• Power user identification

• Feedback submission volume

Effectiveness Metrics:

Productivity Improvements:

• Time saved per transaction

• Transactions processed per hour

• Reduction in data entry time

• Faster reconciliation times

Quality Improvements:

• Error rate reduction

• First-time accuracy improvement

• Exception handling efficiency

• Customer satisfaction increase

Business Impact:

• Revenue impact from better suggestions

• Cost savings from automation

• Faster close cycles

• Improved cash flow

ROI Calculation:

Continuous Improvement:

Use metrics to:

• Identify low-adoption features (investigate why)

• Recognize highly effective features (promote more)

• Adjust configuration based on patterns

• Plan advanced training for power users

• Justify expansion of AI capabilities

Future AI Capabilities Roadmap

Microsoft continuously expands Copilot capabilities.

Emerging Features:

Advanced Forecasting:

• Demand prediction using ML

• Cash flow forecasting

• Resource requirement planning

• Risk prediction

Intelligent Automation:

• Robotic process automation (RPA)

• Complex workflow automation

• Exception handling automation

Enhanced Analysis:

• Root cause analysis

• Simulation and scenario planning

• Optimization recommendations

Natural Language Interface:

• Voice commands

• Conversational data entry

• Query anything using natural language

Staying Current:

Keep up with AI developments:

• Microsoft release notes and roadmaps

• Business Central blog and community

• Insider programs and previews

• Partner channels and webinars

Best Practices for AI Governance and Policies

Establish framework for responsible AI usage.

AI Governance Framework:

Policy Development:

Usage Policy:

• Who can use which AI features

• Acceptable use guidelines

• Prohibited activities

• Privacy and confidentiality requirements

Data Policy:

• What data AI can access

• Geographic processing restrictions

• Data retention and deletion

• Third-party sharing rules

Oversight Policy:

• Human review requirements

• AI decision audit process

• Escalation procedures

• Regular assessment cadence

Governance Committee:

Establish cross-functional team:

• Executive sponsor

• IT security representative

• Privacy/compliance officer

• Business unit representatives

• End users

Responsibilities:

• Review AI feature requests

• Assess privacy and security implications

• Approve new AI capabilities

• Monitor usage and incidents

• Update policies as needed

User Guidelines:

Educate users on:

• When to use AI features

• How to interpret suggestions

• Importance of human judgment

• Feedback responsibility

• Privacy considerations

Deliverables: AI & Copilot Implementation Outputs

Complete this phase with AI capabilities configured and governed:

1. Copilot Configuration Guide

Documentation including:

• Enabled features by environment

• Configuration settings and rationale

• Permission sets and role assignments

• Data processing geography

2. AI Governance Policy Template

Comprehensive policy covering:

• Usage guidelines and restrictions

• Privacy and security requirements

• Human oversight procedures

• Compliance alignment

3. User Adoption Tracking Dashboard

Monitoring solution showing:

• Usage statistics by feature

• Adoption rates by user/department

• Effectiveness metrics

• ROI calculations

4. Copilot Best Practices Document

User guidance including:

• Feature-specific tips

• Dos and don'ts

• Troubleshooting common issues

• How to provide effective feedback

5. Data Privacy Compliance Checklist

Validation that:

• Data processing locations documented

• Privacy impact assessment completed

• User consent obtained where required

• Compliance requirements met

Conclusion: Embracing Intelligent Business Management

AI and Copilot capabilities in Business Central represent a fundamental shift in how business software operates. By thoughtfully implementing and governing these features, organizations unlock unprecedented productivity, insight, and competitive advantage while maintaining appropriate controls and oversight.

Key Takeaways:

✓ Start with High-Impact Features: Focus on capabilities that deliver immediate value

✓ Configure Thoughtfully: Balance functionality with privacy and governance

✓ Train Comprehensively: User adoption depends on understanding and trust

✓ Govern Responsibly: Establish clear policies and oversight

✓ Measure Continuously: Track adoption and effectiveness to demonstrate value

✓ Stay Current: AI capabilities evolve rapidly—keep up with new features

With AI capabilities configured and users trained on intelligent workflows, you're ready for the next critical phase: Training, Change Management & User Adoption, where you'll ensure all users are prepared for Business Central success.

Next in Series: Blog 7: Training, Change Management & User Adoption - Learn comprehensive strategies for training users and driving adoption throughout your organization.

Download Resources:

• Copilot Configuration Guide

• AI Governance Policy Template

• User Training Materials

• Adoption Tracking Dashboard

Questions or Comments? Share your experiences with AI and Copilot features in the comments below.

This is Part 6 of an 8-part series on Business Central Implementation. Subscribe to receive notifications when new articles are published.

Tags: #BusinessCentral #Copilot #ArtificialIntelligence #AI #Microsoft365 #Dynamics365 #DigitalTransformation