AI & Copilot Capabilities in Business Central: Intelligent Business Management

Part 6 of 11 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 of 2026, Microsoft has released multiple waves of Copilot enhancements, with Business Central now offering more than 10 distinct Copilot features across sales, finance, and operations. The pace of AI capability releases continues to accelerate with quarterly updates, making AI literacy an essential skill for Business Central users and administrators.

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.

🤖 What is Copilot in Business Central?

Copilot is Microsoft's AI assistant built into Business Central that uses Azure OpenAI to automate tasks, provide intelligent suggestions, and analyze data through natural language. As of 2026, Business Central includes 10+ Copilot features:

Key Copilot Features:

1. Sales Line Suggestions: Create sales orders using natural language ("10 blue office chairs")

2. Bank Reconciliation Match: AI-powered matching of bank transactions to ledger entries

3. Analysis Assist: Ask business questions in plain English, get instant data insights

4. E-Document Matching: Automatically match electronic invoices to purchase orders

5. Marketing Text: Generate product descriptions for items using AI

6. Late Payment Predictions: Predict which invoices will be paid late

7. Collection Management: Prioritize collection efforts based on AI predictions

8. Accounts Reconciliation: Suggest G/L account matches during reconciliation

9. Item Substitutions: Recommend alternative items when stock is low

10. Chat with Copilot: Ask questions about your BC data conversationally

Plus: MCP Server Extensibility (Preview 2026): Extend Copilot with custom AI agents and external data sources using Model Context Protocol.

How Copilot Works: Azure OpenAI Service analyzes your Business Central data within your tenant boundary, generates suggestions, and presents them for user approval. You always have final control—AI assists, humans decide.

💡 Pricing & Timeline Note
All cost estimates and timelines in this article reflect typical Business Central implementations as of January 2026.

• Geographic Context: Estimates based on Western Europe and North America markets

• Regional Variation: Implementation costs vary significantly by region (typically 30-60% lower in Eastern Europe, Asia-Pacific, and Latin America)

• Microsoft Licensing: Verify current prices at aka.ms/BCPricing as these change periodically

• Effort-Based Budgeting: Use the consulting hours estimates with your local partner's rates for accurate budgeting

These are reference estimates for planning purposes. Request detailed quotes from Microsoft Solutions Partners for your specific requirements.

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.

Create Sales Lines with Copilot

Release: 2024 Wave 1

Feature Overview:

Sales Lines with Copilot allows users to create sales lines using natural language descriptions. Instead of manually searching for and adding items, you describe what you want to sell, and Copilot interprets your request to create the appropriate sales lines.

How It Works:

1. Open a Sales Quote or Sales Order

2. Select "Add with Copilot" or similar action

3. Describe what you want to sell in natural language (e.g., "10 blue office chairs and 5 standing desks")

4. Copilot interprets your description

5. AI creates sales lines with matched items and quantities

6. Review and adjust the suggested lines

7. Accept to add lines to the document

Key Capabilities:

• Natural language input (no need to know exact item numbers)

• Interprets quantities, descriptions, and attributes

• Matches to existing items in inventory

• Available in Sales Quotes and Sales Orders

• Supports multiple languages

Business Benefits:

• Faster Order Entry: Describe orders naturally instead of searching

• Reduced Training: No need to memorize item numbers

• Improved Accuracy: AI matches to correct items

• Better User Experience: Conversational interface

• Accessibility: Easier for new or occasional users

Configuration Considerations:

• Requires Copilot & AI Capabilities to be enabled

• Works best with well-defined item descriptions and attributes

• Can be enabled/disabled per user through permissions

Create AI-Powered Product Descriptions with Copilot

Release: 2023 Wave 2

Feature Overview:

Copilot generates compelling product descriptions for items based on attributes and context. This feature is officially named "Create AI-powered product descriptions with Copilot."

Use Cases:

• E-commerce product descriptions

• Catalog creation

• Sales presentations

• Marketing materials

• Customer-facing documentation

How It Works:

1. Navigate to item card or item category

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. Can regenerate with different prompts or emphasis

7. Description saved to item record

Customization Options:

• Tone selection (professional, casual, enthusiastic, technical)

• Length preferences (brief, medium, detailed)

• Emphasis areas (features, benefits, technical specs)

• Language selection for multi-language catalogs

• Custom prompts to guide content generation

Key Requirements:

• Item Attributes: Configure item attributes for better results (e.g., color, size, material)

• Character Limits: Generated text has specific length limitations

• Multiple Languages: Supports major languages including English, Spanish, French, German, Italian, and more

• Item Categories: Can generate descriptions for entire item categories, not just individual items

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

• Scalable for large catalogs

Reconcile Bank Accounts with Copilot

Release: 2023 Wave 1

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:

• Significant time reduction in reconciliation (time savings vary by organization and transaction complexity; some organizations report up to 50% time reduction)

• Improved accuracy through AI consistency

• Faster month-end close

• Early identification of discrepancies

• Reduced manual matching errors

Analysis assist for Data Insights

Release: 2024 Wave 2

Feature Overview:

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

How It Works:

Natural Language Queries:

Analysis Capabilities:

• Natural language data queries

• Automated pivot table generation

• Chart and visualization creation

• Data summarization and grouping

• Quick insights from complex datasets

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

Copilot Chat in Business Central

Release: 2024 Wave 2

Feature Overview:

Copilot Chat is a natural language interface that allows users to interact with Business Central using conversational queries. This is one of the most significant Copilot features, providing a chatbot-like experience for asking questions about data, processes, and how-to guidance.

How It Works:

Users can ask questions in natural language such as:

• "Show me open sales orders for customer Adatum"

• "How do I create a new item?"

• "What's my current cash position?"

• "Explain how bank reconciliation works"

Copilot Chat understands context and provides:

• Direct answers with relevant data

• Step-by-step guidance for processes

• Links to relevant pages and documentation

• Follow-up suggestions

Key Capabilities:

• Conversational interface accessible throughout Business Central

• Context-aware responses based on current page/activity

• Data retrieval and summarization

• Process guidance and how-to help

• Multi-turn conversations for complex queries

Business Benefits:

• Reduced learning curve for new users

• Faster task completion

• Self-service support reduces helpdesk calls

• Improved user satisfaction

• Accessibility for users with varying technical skills

Suggest Lines on Purchase Orders with Copilot

Release: 2024 Wave 1

Feature Overview:

Similar to sales lines, this feature allows users to create purchase order lines using natural language descriptions, streamlining the procurement process.

How It Works:

1. Open a Purchase Order

2. Use "Add with Copilot" action

3. Describe items to purchase in natural language

4. Copilot interprets and creates purchase lines

5. Review and adjust suggestions

6. Accept to add lines to the order

Business Benefits:

• Faster purchase order creation

• Reduced errors in procurement

• Easier for occasional users

• Improved procurement efficiency

Late Payment Prediction

Release: 2019 Wave 2 (Pre-Copilot AI capability)

Feature Overview:

While not branded as "Copilot," Late Payment Prediction is an AI-powered feature that uses machine learning to predict which customer invoices are likely to be paid late.

How It Works:

• AI analyzes historical payment patterns

• Considers customer, invoice, and contextual factors

• Generates prediction scores for open invoices

• Updates predictions as new data arrives

Business Benefits:

• Proactive collections management

• Better cash flow forecasting

• Prioritized collection efforts

• Reduced days sales outstanding (DSO)

Sales and Inventory Forecast

Release: 2017 (Pre-Copilot AI capability)

Feature Overview:

An AI-powered forecasting feature that predicts future product demand based on historical sales data and trends.

How It Works:

• Analyzes historical sales patterns

• Considers seasonality and trends

• Generates demand forecasts by item

• Integrates with planning and replenishment

Business Benefits:

• Optimized inventory levels

• Reduced stockouts and overstock

• Improved service levels

• Better production and procurement planning

Note: While this feature predates the Copilot branding, it represents Microsoft's long-standing investment in AI capabilities within Business Central.

Configuring Copilot in Your Environment

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

Prerequisites for Enabling Copilot

Before enabling Copilot features, ensure the following prerequisites are met:

1. Environment Requirements:

• SaaS (Online) Environment: Copilot features are available in Business Central Online (SaaS)

• Not Available On-Premises: Most Copilot features require cloud connectivity and are not available in on-premises deployments

• Environment Type: Available in production and sandbox environments

• Version: Ensure you're running a supported version of Business Central

2. Regional Availability:

• Not all Copilot features are available in all geographic regions

• Check Microsoft's documentation for current regional availability

• Some countries/regions have restrictions due to regulatory requirements

• Data processing may occur in different regions (see data geography section)

3. Administrator Actions Required:

• Accept Terms and Conditions: Admin must review and accept Copilot-specific terms

• Privacy Notice Review: Understand data processing and privacy implications

• Data Movement Consent: Acknowledge that data may be processed in other regions

• Feature Activation: Explicitly enable desired Copilot capabilities

4. Licensing Requirements:

• Most Copilot features are included in Business Central licenses

• Some advanced features may require Premium licenses

• Verify licensing for your specific feature requirements

• Check with your Microsoft partner or licensing specialist

5. User Notifications:

• Users must see privacy notices when first using Copilot features

• Consider internal communication about Copilot rollout

• Provide training before enabling features

• Set expectations about AI assistance

Enabling Copilot Features

System-Wide Configuration:

1. Navigate to Copilot & AI Capabilities Page:

   • Search for "Copilot & AI Capabilities" in Business Central

   • This centralized page provides comprehensive control over all Copilot features

   Page Features:

   • Feature List: View all available Copilot capabilities

   • Status Indicators: See which features are enabled/disabled

   • Data Movement Transparency: See which features move data across geographic boundaries

   • Privacy Links: Access feature-specific privacy documentation

   • Preview vs. GA: Identify which features are in preview vs. generally available

   • Bulk Operations: Enable/disable multiple features at once

   • Documentation Links: Direct links to Microsoft Learn for each feature

   • Regional Availability: Indicators for features not available in your region

2. Enable Desired Features:

   • Toggle individual features on/off

   • Review data movement implications before enabling

   • Accept feature-specific terms and conditions

   • Configure feature-specific settings

3. Review Data Processing Information:

   • Understand where AI processing occurs for each feature

   • Review data residency and compliance implications

   • Ensure alignment with organizational policies

   • Document decisions for audit purposes

User-Level Configuration:

Administrators can control:

• Which users have access to which Copilot features (via permissions)

• Whether users can enable/disable features for themselves

• Usage tracking and monitoring

• Feedback collection mechanisms

• Rollout strategy (pilot groups vs. organization-wide)

Feature-Specific Settings:

Each Copilot capability may have specific configuration options accessible through the Copilot & AI Capabilities page or individual feature pages. Common settings include:

• Confidence thresholds for automated suggestions

• Language and tone preferences

• Data scope and historical ranges

• User feedback mechanisms

• Feature-specific parameters

Consult Microsoft documentation for detailed configuration options for each Copilot feature.

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:

• Business Central Data Region: Your Business Central data resides in your selected geographic region

• Azure OpenAI Service: Copilot features use Azure OpenAI Service, which may be located in a different region than your Business Central data

• Cross-Region Data Movement: When you use Copilot features, data may be temporarily sent to Azure OpenAI Service in another region for processing

• Transparency: The Copilot & AI Capabilities page shows which features move data across geographic boundaries

• Regional Restrictions: Some regions may not have Copilot features due to Azure OpenAI availability

• Compliance Considerations: Ensure cross-region data movement aligns with your organization's compliance requirements

Important: Data sent to Azure OpenAI Service for processing is:

• Encrypted in transit and at rest

• Not used to train foundation models for other customers

• Processed only to generate responses

• Subject to Microsoft's data protection standards

• May be retained for up to 30 days for abuse monitoring

Regional Availability:

• Copilot features are not available in all countries/regions

• Availability depends on Azure OpenAI Service regional deployment

• Check Microsoft documentation for current list of supported regions

• Some organizations may choose to opt-out due to data residency requirements

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

Copilot Limitations and Considerations

While Copilot capabilities provide significant value, understanding their limitations ensures realistic expectations and appropriate usage.

Language Support

Current State:

• Primary Language: English (most comprehensive support)

• Expanding Languages: Spanish, French, German, Italian, Portuguese, and others being added

• Feature Variations: Not all features available in all languages simultaneously

• Quality Differences: AI performance may vary by language

Considerations:

• Check feature-specific language availability

• English typically gets new features first

• Translation quality depends on training data

• Regional dialects may have varying support

Data Volume Requirements

Historical Data Needs:

• Some features require sufficient historical data for accurate suggestions

• Bank Reconciliation: Benefits from historical patterns (3-6 months minimum recommended)

• Late Payment Prediction: Requires historical payment data for training

• Sales Forecasting: Needs at least 12-24 months of sales history

New System Considerations:

• AI accuracy improves over time as data accumulates

• Initial suggestions may be less accurate

• Consider starting with rule-based features during early adoption

• Set user expectations about improvement curve

Accuracy Expectations

AI is Assistive, Not Perfect:

• Copilot provides suggestions, not guaranteed correct answers

• Human review and judgment remain essential

• Confidence scores indicate reliability levels

• Edge cases may produce unexpected results

When Human Judgment is Critical:

• Final financial decisions

• Customer-facing communications (review AI-generated text)

• Regulatory compliance matters

• High-value transactions

• Unusual or exceptional scenarios

Regional and Industry Limitations

Geographic Availability:

• Not all features available in all countries/regions

• Regulatory restrictions in some jurisdictions

• Data residency requirements may limit adoption

• Check Microsoft documentation for current regional availability

Industry-Specific Considerations:

• Generic AI models may not understand industry-specific terminology

• Highly regulated industries may have additional restrictions

• Specialized business processes may require customization

• Vertical-specific features may not exist

Preview Features

Understanding Preview Status:

• Preview Features: Not generally available, subject to change

• Production Use: Preview features may not be recommended for production

• Support Limitations: Preview features may have limited support

• Feedback Opportunity: Preview users can influence final feature design

Considerations:

• Test preview features in sandbox environments

• Document any dependencies on preview features

• Plan for potential changes or removal

• Provide feedback to Microsoft

Performance and Availability

Response Time Considerations:

• AI processing takes longer than traditional database queries

• Network latency affects performance

• Peak usage times may experience slower responses

• Azure OpenAI Service throttling during high demand

Availability:

• Requires internet connectivity

• Depends on Azure OpenAI Service availability

• Service interruptions affect Copilot features (not core Business Central)

• SLA applies but may differ from Business Central core

When NOT to Use Copilot

Inappropriate Scenarios:

• Replacing professional judgment in critical decisions

• Bypassing established approval processes

• Handling sensitive data beyond organizational policies

• Scenarios requiring 100% accuracy

• Replacing proper training and onboarding

• Audit trails requiring human accountability

Enabling and Disabling Copilot Features by User/Role

Granular control ensures appropriate access to AI capabilities.

Permission-Based Control:

Permission Structure:

Business Central controls Copilot access through feature-specific permission objects. Each Copilot capability has its own permission set that can be assigned individually or combined.

Feature-Specific Permission Sets:

• "COPILOT - SALES LINES": Create sales/purchase lines with Copilot

• "COPILOT - BANK REC": Bank account reconciliation with Copilot

• "COPILOT - ITEM MARKETING TEXT": AI-powered product descriptions

• "COPILOT - CHAT": Copilot Chat access

• "COPILOT - ANALYSIS": Analysis assist capabilities

Permission Management:

Administrators control Copilot access by:

1. Assigning individual feature permission sets

2. Creating custom permission sets combining multiple Copilot features

3. Including/excluding Copilot permissions in role-based permission sets

4. Using the Copilot & AI Capabilities page for centralized control

Role-Based Access:

Align Copilot features with job responsibilities:

Sales Representatives:

• Create sales lines with Copilot ✓

• Marketing text ✓

• Analysis assist ✓

• Copilot Chat ✓

• Bank reconciliation ✗

Accountants:

• Bank reconciliation ✓

• Analysis assist ✓

• Copilot Chat ✓

• Sales lines ✗

Managers/Executives:

• Copilot Chat ✓

• Analysis assist ✓

• Marketing text ✗

• Bank reconciliation ✗

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, and newer models)

• Secure, compliant infrastructure

• Integration with Microsoft products

• Enterprise-grade service level agreements

Business Central Connection:

Business Central communicates with Azure OpenAI Service:

• No Direct Setup Required: Customers don't need their own Azure OpenAI instance

• Microsoft-Managed: Business Central uses Microsoft's Azure OpenAI Service deployment

• API Calls: Business Central sends prompts and receives AI-generated responses

• Data Encryption: All data sent securely encrypted in transit and at rest

• Isolated Processing: Results returned only to your Business Central environment

Data Handling and Retention:

What "No Training on Customer Data" Means:

• Your data is NOT used to train or improve the foundational GPT models

• Your data is NOT used to improve Copilot for other customers

• Your prompts and completions are isolated to your organization

• Microsoft does NOT have access to your business data through this processing

Abuse Monitoring:

• Prompts and completions may be retained for up to 30 days for abuse monitoring

• This retention is for safety and compliance purposes only

• After the retention period, data is permanently deleted

• Organizations can opt-out of this monitoring in certain scenarios

Data Flow:

1. User interacts with Copilot feature in Business Central

2. Business Central sends necessary data to Azure OpenAI Service

3. Azure OpenAI processes request and generates response

4. Response returned to Business Central and displayed to user

5. No long-term storage of prompts/completions beyond abuse monitoring period

Benefits of Azure OpenAI:

• Enterprise Security: Microsoft's comprehensive security infrastructure

• Compliance: Meets GDPR, CCPA, SOC 2, ISO 27001, and other regulatory requirements

• Performance: Low latency, high availability (99.9% SLA)

• Scalability: Automatically handles varying loads

• Updates: Access to latest AI models without customer action required

• No Separate Licensing: Included with Business Central subscription

Custom AI Scenarios Using Power Platform

Extend AI capabilities beyond built-in features.

Important Implementation Considerations:

Before pursuing custom AI scenarios, understand the requirements:

Licensing Requirements:

• Power Platform Premium: Most AI Builder features require premium licenses

• AI Builder Credits: Consumption-based pricing for AI operations

• Business Central API: May require specific licensing for API access

• Per-User Costs: Can become significant for organization-wide deployment

Technical Requirements:

• Power Platform Expertise: Requires knowledge beyond Business Central

• Custom Development: Not "out of the box" integration

• API Management: Must monitor and manage API call limits

• Maintenance: Custom integrations require ongoing support

• Testing: Thorough testing required in sandbox environments

Complexity Considerations:

• Implementation time: Weeks to months depending on scenario

• Requires Business Central + Power Platform + AI Builder skills

• May need development partner assistance

• Cost-benefit analysis recommended before starting

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

Copilot Extensibility and Custom Development

Building Custom Copilot Experiences:

Beyond out-of-the-box features, developers can extend and create custom Copilot capabilities for Business Central.

Model Context Protocol (MCP) Server for Business Central

Status: Preview (as of January 2026)

Overview:

The Model Context Protocol (MCP) Server for Business Central enables developers to build custom AI-powered experiences that integrate with Copilot and large language models.

Key Capabilities:

• Custom Copilot Skills: Build domain-specific AI capabilities

• Context Provision: Expose Business Central data to AI models with proper context

• Natural Language Interfaces: Create conversational experiences for custom processes

• Tool Integration: Connect external AI tools to Business Central data

• Extensible Framework: Build on standard protocols for AI integration

Use Cases:

• Industry-specific AI assistants (manufacturing, distribution, services)

• Custom data analysis and reporting through natural language

• Vertical-specific intelligent automation

• Integration with specialized AI models

• Custom recommendation engines

Requirements:

• Developer Skills: AL development, API understanding, AI/ML concepts

• Preview Program: Participation in Microsoft preview programs

• Development Environment: Business Central development tools

• Testing Infrastructure: Sandbox environments for validation

• Ongoing Maintenance: Custom code requires support and updates

Considerations:

• Preview Status: Features and APIs subject to change

• Production Readiness: Preview features may not be recommended for production

• Microsoft Support: Limited support during preview phase

• Breaking Changes: Be prepared for API changes before GA

• Documentation: Preview documentation may be incomplete

AL Language Copilot Extensions

Custom Copilot Actions in AL:

Developers can create custom Copilot experiences using AL language extensions:

Extension Points:

• Page Copilot: Add Copilot to custom pages

• Copilot Actions: Define custom actions users can invoke

• Prompt Customization: Tailor prompts for specific scenarios

• Response Handling: Process AI responses in custom ways

Development Process:

1. Define Copilot capability in AL code

2. Configure Azure OpenAI integration (if needed)

3. Implement prompt engineering and response parsing

4. Test thoroughly in sandbox

5. Deploy through AppSource or per-tenant extension

Best Practices:

• Follow Microsoft's Copilot design guidelines

• Implement proper error handling

• Provide clear user feedback

• Test with various prompt styles

• Consider token limits and costs

• Implement appropriate safeguards

Resources:

• Microsoft Learn: Copilot development documentation

• GitHub: Sample Copilot extensions

• Partner network: Development support

Important Note: Custom Copilot development requires:

• Advanced AL development skills

• Understanding of prompt engineering

• Knowledge of Azure OpenAI integration

• Budget for development and testing

• Ongoing maintenance commitment

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.

Note: Future capabilities described here are based on Microsoft's public roadmap as of January 2026. Features, timelines, and functionality are subject to change. Organizations should not make purchasing decisions based solely on future functionality.

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

Frequently Asked Questions (FAQ)

What is Business Central Copilot?

Business Central Copilot is Microsoft's AI assistant that provides intelligent automation and insights within Dynamics 365 Business Central:

Definition: Copilot is an AI-powered feature set built into Business Central that uses Azure OpenAI Service and machine learning to:

• Automate repetitive tasks

• Generate content and suggestions

• Provide data analysis through natural language

• Predict outcomes based on historical patterns

• Match and reconcile transactions intelligently

Core Copilot Capabilities (2026):

1. Sales Line Suggestions

• What: Create sales order lines using natural language

• Example: Type "5 ergonomic chairs and 2 standing desks" → Copilot adds items automatically

• Benefit: 50% faster order entry, reduced item search time

2. Bank Reconciliation Match

• What: AI matches bank transactions to G/L entries

• Example: Bank transaction "ACH CONTOSO 1250.00" → Copilot finds matching sales invoice

• Benefit: 70% reduction in manual reconciliation time

3. Analysis Assist (Chat with Data)

• What: Ask business questions in plain English

• Example: "Show me top 10 customers by revenue last quarter" → Instant table/chart

• Benefit: No report building needed, instant insights

4. E-Document Matching

• What: Match electronic invoices to purchase orders automatically

• Example: PDF invoice received → Copilot extracts data and matches to PO

• Benefit: 80% reduction in manual invoice processing

5. Marketing Text Generation

• What: Generate product descriptions for items using AI

• Example: Item "Ergonomic Office Chair" → Copilot writes compelling description for e-commerce

• Benefit: Faster product catalog creation

6. Late Payment Predictions

• What: Predict which customer invoices will be paid late

• Example: Invoice #12345 flagged as "85% likely late" based on customer history

• Benefit: Proactive collection management

7. Accounts Reconciliation Suggestions

• What: Suggest G/L account matches during reconciliation

• Example: Bank fee $25 → Copilot suggests "Bank Charges" account

• Benefit: Faster month-end close

8. Item Substitutions

• What: Recommend alternative items when stock is low

• Example: "Blue Widget" out of stock → Copilot suggests "Navy Widget" or "Teal Widget"

• Benefit: Reduce lost sales from stockouts

Technology Foundation:

• Azure OpenAI Service: Powers natural language understanding and generation

• Machine Learning: Learns patterns from your data (late payments, reconciliation matches)

• Responsible AI: Built with privacy, security, and transparency safeguards

Key Differentiators from Legacy ERP:

• ✅ Natural Language Interface: No technical query language needed

• ✅ Contextual Awareness: Copilot knows what page you're on and what you're doing

• ✅ Continuous Learning: Gets smarter as you use it and provide feedback

• ✅ Embedded in Workflow: Not a separate tool—integrated into daily tasks

Geographic Availability: Copilot respects data residency—processes data within your selected Azure region (EU, US, etc.).

How do I enable Copilot in Business Central?

Enabling Copilot in Business Central requires admin configuration at tenant and feature levels:

Prerequisites:

• ✅ Business Central Online (SaaS)—Copilot not available on-premises

• ✅ Premium or Essentials license (Copilot included)

• ✅ Admin permissions (Business Central Administrator role)

• ✅ Azure AD/Entra ID authentication

Step-by-Step Enablement Process:

Step 1: Enable Copilot in Admin Center (Tenant-Wide)

1. Navigate to Business Central Admin Center (admin.businesscentral.microsoft.com)

2. Select your environment (Production or Sandbox)

3. Go to Settings → Feature Management

4. Locate "Copilot and AI capabilities"

5. Toggle to Enabled

6. Select Data Movement Geography:

   • Option 1: Within Same Region (data stays in your BC region—EU, US, etc.)

   • Option 2: Allow Cross-Region (may send data to Azure OpenAI regions outside your BC region)

   • Recommendation: Choose "Within Same Region" for GDPR/data residency compliance

7. Click Save

Step 2: Enable Specific Copilot Features (Per-Feature)

1. In Business Central, navigate to Copilot & AI Capabilities page

2. Review list of available Copilot features:

   • Sales Line Suggestions

   • Bank Reconciliation Match

   • Analysis Assist

   • E-Document Matching

   • Marketing Text

   • Late Payment Predictions

   • (etc.)

3. For each feature:

   • Set Status to Enabled or Disabled

   • Choose Data Movement preference (if different from tenant default)

   • Review Privacy Notice and Terms of Use

4. Click Agree to accept terms for enabled features

Step 3: Assign User Permissions

1. Navigate to Users page

2. Select user or user group

3. Assign permission set: "Copilot User" or feature-specific permissions:

   • "Sales with Copilot": Sales Line Suggestions

   • "Bank Reconciliation with Copilot": Bank matching

   • "Analysis Assist User": Chat with data

4. Users can now access Copilot features in their assigned areas

Step 4: Test in Sandbox First (Recommended)

1. Enable Copilot in Sandbox environment first

2. Test features with real data

3. Train pilot users

4. Gather feedback

5. Once validated, enable in Production

Step 5: User Training & Communication

1. Notify users that Copilot is enabled

2. Provide training materials:

   • How to use Sales Line Suggestions

   • How to ask questions in Analysis Assist

   • How to review and approve AI suggestions

3. Encourage feedback via Copilot thumbs up/down buttons

4. Monitor adoption via telemetry

Configuration Options:

Granular Control:

• Enable Copilot globally BUT disable specific features

• Example: Enable Sales Line Suggestions, disable Marketing Text

Role-Based Access:

• Sales reps: Sales Line Suggestions only

• Accountants: Bank Reconciliation Match + Analysis Assist

• Administrators: All Copilot features

Data Movement Options:

Disabling Copilot:

1. Admin Center → Feature Management → Toggle Off

2. Or disable individual features in Copilot & AI Capabilities page

3. Users immediately lose access

Troubleshooting:

Problem: Copilot button not appearing

• Solution: Check user has "Copilot User" permission set

• Solution: Verify feature enabled in Admin Center AND Copilot & AI Capabilities page

Problem: "Data movement not allowed" error

• Solution: Enable cross-region data movement OR wait for same-region availability

Problem: Copilot suggestions poor quality

• Solution: Provide feedback via thumbs down, AI improves over time

• Solution: Ensure master data quality (clean item descriptions, customer data)

Licensing: Copilot features included in Business Central Essentials and Premium licenses (no additional cost for base features). Some advanced Copilot features may require add-on licenses in future.

Is Business Central Copilot secure?

Yes, Business Central Copilot is built on Microsoft's Responsible AI principles with comprehensive security:

Data Security & Privacy:

1. Data Processing Location

• Configurable: Choose whether data stays within your BC region or can move cross-region

• Transparent: Microsoft clearly discloses where data is processed

• EU Data Boundary: For EU customers choosing "Same Region," data never leaves EU

2. Data Encryption

• In Transit: TLS 1.2+ encryption for all data sent to Azure OpenAI

• At Rest: Data encrypted in Azure storage

• No Persistent Storage: Copilot doesn't store your prompts/data long-term (processes and discards)

3. Tenant Isolation

• Your BC data is never used to train OpenAI models for other customers

• Each tenant's data processed in isolation

• No cross-tenant data leakage

4. Access Controls

• Role-based permissions control who can use Copilot

• Admins control which features are enabled

• User activity logged for audit

5. Data Minimization

• Copilot only sends necessary data to Azure OpenAI (not entire database)

• Example: Sales Line Suggestions sends item descriptions, not customer financial data

Compliance & Governance:

GDPR Compliance:

• ✅ Data processing agreements in place (Microsoft as processor)

• ✅ Data residency options (EU customers can keep data in EU)

• ✅ Right to disable Copilot entirely

• ✅ Transparency about data usage

SOC 2 / ISO 27001:

• Azure OpenAI Service is SOC 2 Type II certified

• Business Central maintains ISO 27001 certification with Copilot enabled

Industry-Specific:

• Healthcare (HIPAA): Copilot can process PHI if BC deployed in HIPAA-compliant manner

• Financial Services: Meets regulatory requirements for data processing

Responsible AI Safeguards:

1. Human-in-the-Loop

• Copilot suggests, humans approve

• Users can reject or modify AI suggestions

• Critical actions (posting transactions) always require human confirmation

2. Transparency

• Copilot explains why it made suggestions ("Based on customer history...")

• Users understand AI logic, not "black box"

3. Feedback Mechanism

• Thumbs up/down buttons on suggestions

• Feedback improves AI quality (but doesn't expose your data to other tenants)

4. Bias Mitigation

• Microsoft tests for bias in AI models

• Regular audits of AI fairness (e.g., late payment predictions don't discriminate)

5. Content Filtering

• Harmful content blocked (profanity, inappropriate suggestions)

• Business-appropriate outputs only

What Microsoft Does NOT Do:

• ❌ Use your data to train public OpenAI models

• ❌ Share your data with other BC customers

• ❌ Store prompts/responses permanently (ephemeral processing)

• ❌ Sell your data to third parties

• ❌ Use Copilot interactions for advertising

What YOU Control:

• ✅ Whether to enable Copilot (opt-in, not forced)

• ✅ Which features to enable (granular control)

• ✅ Data movement geography (same-region vs. cross-region)

• ✅ Who can use Copilot (permission-based)

• ✅ Feedback and improvement (thumbs up/down)

Audit & Monitoring:

Telemetry Available:

• Which users used Copilot features

• How often features were used

• Acceptance rate of suggestions (users clicked "Accept" vs. "Reject")

• Performance metrics (time saved)

Access via:

• Business Central telemetry (Application Insights)

• Admin Center usage reports

Risk Comparison:

Recommendation for Risk-Averse Organizations:

1. Enable Copilot in Sandbox only initially

2. Test with non-sensitive data first

3. Choose "Same Region" data movement

4. Enable high-value, low-risk features first (e.g., Sales Line Suggestions)

5. Monitor usage for 30-60 days

6. Gradually expand to Production after validation

Security Resources:

• Microsoft Trust Center: https://www.microsoft.com/trust-center

• Azure OpenAI Security: https://learn.microsoft.com/azure/ai-services/openai/concepts/security

• BC Copilot Privacy FAQ: https://learn.microsoft.com/dynamics365/business-central/copilot-privacy

What Copilot features are available in Business Central 2026?

Business Central 2026 includes 10+ Copilot features across sales, finance, and operations:

Sales & Customer Management:

1. Sales Line Suggestions (GA - Generally Available)

• Release: 2024 Wave 1

• What: Create sales order lines using natural language

• Example: "Add 5 blue office chairs and 3 standing desks" → Copilot finds items and creates lines

• Availability: All countries/regions

• License: Included in Essentials/Premium

2. Item Substitution Suggestions (GA)

• Release: 2024 Wave 2

• What: Recommend alternative items when primary item out of stock

• Example: "Blue Widget" unavailable → Suggests "Navy Widget" with similar specs

• Availability: All countries/regions

3. Marketing Text Generation (GA)

• Release: 2023 Wave 2

• What: Generate product descriptions for items using AI

• Example: "Ergonomic Office Chair" → Creates compelling marketing copy

• Use Case: E-commerce catalogs, sales materials

• Availability: English language primarily

Finance & Accounting:

4. Bank Reconciliation Match (GA)

• Release: 2024 Wave 1

• What: AI-powered matching of bank transactions to G/L entries

• Example: Bank line "ACH PAYMENT CONTOSO" → Matches to customer payment

• Time Savings: 50-70% reduction in reconciliation time

• Availability: All countries/regions

5. Accounts Reconciliation Suggestions (GA)

• Release: 2024 Wave 2

• What: Suggest G/L account assignments during reconciliation

• Example: "Bank Service Fee $25" → Suggests G/L Account "6150 - Bank Charges"

• Availability: All countries/regions

6. Late Payment Prediction (GA)

• Release: 2023 Wave 2

• What: Predict likelihood of customer invoice being paid late

• Example: Invoice #12345 shows "78% likely to be paid late" based on customer history

• Use Case: Prioritize collection efforts, credit decisions

• Availability: All countries/regions

7. Collection Management Prioritization (Preview)

• Release: 2025 Wave 2

• What: AI ranks customers by collection priority

• Example: Dashboard shows "Focus on Customer A (high balance, late payment risk)"

• Availability: Select regions

Data Analysis & Reporting:

8. Analysis Assist (Chat with Data) (GA)

• Release: 2024 Wave 1

• What: Ask business questions in natural language, get instant insights

• Examples:

  • "Show me top 10 customers by revenue last quarter"

  • "What's our inventory turnover for electronics category?"

  • "Compare sales this month vs. last month by region"

• Output: Tables, charts, pivot analysis

• Availability: All countries/regions

• Languages: English, with expansion to other languages ongoing

Document Processing:

9. E-Document Matching (GA)

• Release: 2024 Wave 2

• What: Automatically match electronic invoices to purchase orders

• Example: PDF invoice received → Copilot extracts vendor, amount, PO# → Matches to open PO

• Time Savings: 80% reduction in manual invoice processing

• Availability: Countries with e-invoicing requirements (EU, LatAm, etc.)

Advanced/Preview Features:

10. Copilot Studio Integration (Preview 2026)

• What: Build custom Copilot agents for specialized workflows

• Example: Custom AI agent for warranty claim processing

• Availability: Requires Copilot Studio license

11. Model Context Protocol (MCP) Server Extensibility (Preview 2026)

• What: Extend Copilot with external data sources and custom AI logic

• Example: Connect Copilot to external weather API for demand forecasting

• Use Case: Advanced AI scenarios beyond standard Copilot

• Availability: Developers via AL extensions

Feature Availability Summary:

Upcoming Features (Roadmap 2026-2027):

• Inventory Demand Forecasting: AI predicts future demand

• Supplier Risk Assessment: Evaluate vendor reliability

• Automated Expense Categorization: Classify expenses via AI

• Contract Analysis: Extract key terms from contracts

How to Check What's Available in Your Tenant:

1. Navigate to Copilot & AI Capabilities page in Business Central

2. See list of features enabled for your environment

3. Check Release Plans (Microsoft Docs) for upcoming features

Cost: Most Copilot features included in Business Central Essentials/Premium licenses. Advanced features (Copilot Studio, some industry-specific) may require add-on licenses.

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