Microsoft Dynamics 365 Business Central 2026 Release Wave 1 is now available. This release delivers two GA AI agents, four embedded Power BI apps, a rebuilt financial reporting engine, a global Withholding Tax framework, and an enhanced MCP Server. These are changes that touch every team in your organization.
Finance teams have the most to evaluate. The Payables Agent is now generally available worldwide. It monitors shared vendor mailboxes, reads invoice attachments, and matches lines to purchase orders automatically. Watch the walkthrough | Microsoft Learn
Beyond AP automation, Wave 1 delivers Financial Reporting with a tile-based UI, lifecycle states, and scheduled email delivery (Overview); a new Withholding Tax Framework covering the full vendor purchase cycle (Overview); configurable Excise Duties for alcohol, sugar, plastic, and more (Overview); US Bonus Depreciation natively in BC; Self-Billing Invoices from posted purchase receipts; and a rebuilt E-Documents and Peppol framework (Overview).
The Sales Order Agent is now generally available. It monitors a shared customer mailbox, reads incoming orders, and creates BC sales order drafts for human review. A new Agent Task Pane surfaces all agent activity in a unified panel, and a Review Bar highlights every change an agent makes. Watch the walkthrough
Shopify gets two meaningful upgrades: Presentment Currency syncs the storefront price directly to the BC order, and Product Information Management lets you manage your catalog centrally in BC and push it to Shopify. An embedded Sales Analytics Power BI App rounds out this area.
Supply Chain and Reporting
Wave 1 adds a native Quality Management Extension with QA workflows, lot tracking, and inspection routing. Drop Shipment Posting and Purchase Order Matching both receive accuracy improvements that reduce manual reconciliation.
On reporting, Microsoft has embedded four Power BI apps directly in BC at no extra license cost: Finance, Sales, Supply Chain, and Subscription Billing. Analysis Mode v2 is now AL-deployable, and 36 new read-only APIs give external BI tools direct access to BC data.
Agent Designer reaches GA in May 2026, letting any team build custom AI agents connected to BC data using natural language and AL code. Microsoft Learn
The Business Central MCP Server receives five significant upgrades: configuration validation with one-click fixes, import and export between environments, any-host support for MCP-compliant AI clients, embedded resources for live BC data access, and telemetry and audit events. Watch the walkthrough | Microsoft Learn
Partners building Copilot features no longer need their own Azure subscription. Microsoft-managed Azure OpenAI resources are now available directly, with content filtering policies and an AI feature evaluator included. Watch the walkthrough
IT, Security and Administration
A new Permissions Overview Page lets admins analyze user permissions across every object in analysis mode. The Approval User Overview consolidates approval chains and delegation history in one view. Wave 1 also adds 12 new read-only APIs (5 permission, 7 approval and workflow), Cloud for Sovereignty controls with a full access audit trail, Database Index Management from the BC client, and a modernized Users list and detail page. Watch the walkthrough
What to Test Before Wave 1 Goes Live
Optional features enabled in Wave 1 become mandatory in Version 29. The highest regression risk areas are AP posting, Shopify currency sync, drop shipment reconciliation, Power BI data refresh, and user permission changes. Set up a dedicated sandbox, enable Wave 1 via Feature Management, document your baseline, and get process owner sign-off before touching production.
For a complete feature checklist organized by area, plus a five-step testing guide and links to every Microsoft Learn article and YouTube walkthrough, download the free BC 2026 Wave 1 Overview: Download the BC 2026 Wave 1 Release Overview
TheTestMart is an automated testing platform built specifically for Microsoft Dynamics 365, including Business Central and the wider D365 suite, mapping every Microsoft wave release to targeted test scenarios so your team gets clear pass/fail evidence before changes go live. If you want to know exactly what Wave 1 breaks before your users do, we can help.
What You Missed at the AI Agent & Copilot Summit 2026: TheTestMart was on the ground in San Diego. Here’s what stood out.
The AI Agent & Copilot Summit, produced by Dynamic Communities, wrapped last week at the Hilton La Jolla Torrey Pines in San Diego. Nearly 1,000 business and technology leaders gathered for three days of sessions on where AI is actually landing inside Microsoft Dynamics 365 environments. TTM was a proud sponsor, and we left with a clear point of view on what this moment means for D365 organizations.
IT is turning business needs into solutions
A consistent theme wasn’t about pure technology. It was about how teams are working together differently, faster. Kenny Mullican, CIO at Paragon Films, said it well: AI is giving technology teams the ability to support the business directly in ways they couldn’t before. Less time in ticket queues, more time solving real problems.
That showed up in the use cases shared. A major US manufacturer had been running traditional ML models to manage complex EDI workflows, but as those processes grew in complexity, they moved to AI, building D365 extensions mapped to specific APIs to pull exactly the data they needed. They’ve since applied that same pattern to fulfillment and transportation. AI isn’t replacing ERP. It’s making ERP more tailored to the specific needs of the business, and more mission-critical as a result.
Reskilling: outputs over prompts
A few things from the reskilling sessions stood out:
Measure outputs, not prompts. How a team thinks with AI matters more than how often they use it.
Make it safe to amplify AI use, not hide it. Better results with AI assistance is the outcome worth recognizing relayed, Shawn Dorward, Microsoft MVP and VP SMB Division at sa.global
As Will Hawkins, CEO of RitewAI, put it: AI is linked to how you think. PhD-level thinking gets PhD-level results.
The natural language ceiling
Natural language is a starting point, not a control plane. That was the undercurrent across a lot of sessions.
Copilot and AI agents work well for surfacing insights and handling lower-stakes workflows. But for revenue recognition, inventory valuation, or compliance-sensitive transactions, “the model interpreted it correctly” isn’t something a CFO signs off on. D365 environments are often too complex and too customized to take AI-generated outputs at face value. Teams are building agents on top of systems that were never designed to be interrogated dynamically, and the complexity compounds.
Data: still the real conversation
If there was one topic that surfaced in nearly every hallway conversation, it was data quality. AI doesn’t fix bad data, it amplifies it. We had a great conversation with Conor Doyle, CEO of DQ Global, who works on exactly this problem. His framing was simple: before you can use your data to inform your deepest customer decisions, you need to sort out all the “Dan’s, dans, Daniels, Danny’s” living inside your system. The models are only as good as what’s underneath them, and most enterprise data isn’t ready for what’s being asked of it.
Takeaway
AI adoption in D365 is accelerating. More customization, more agents, more unstructured data flowing into structured processes. The builds are moving fast. The question every team should be asking is whether their validation strategy is keeping pace. Because the cost of finding out it isn’t keeps getting higher.
Is Your Testing Strategy Ready for What You’re Building?
AI adoption in D365 isn’t slowing down — and neither are the risks of untested outputs. Is your testing strategy ready for what you’re building? Book a free D365 Automation Assessment with TTM’s Head of Testing and get a clear, actionable picture of where deterministic, automated testing fits into your roadmap.
We are excited to announce our new partnership with Elantis Solutions, a trusted Microsoft consultancy serving organizations across North America. For us at TheTestMart, this partnership is about more than two companies working together, it is about addressing a challenge that virtually every organization running Dynamics 365 faces, and building a better answer to it.
The Problem We’re Solving Together
Anyone who has been through a Dynamics 365 implementation knows the pattern. The build goes well. The go-live is a milestone. And then the reality of operating a cloud ERP sets in: mandatory updates, continuous releases, growing customizations, and a testing burden that only gets heavier over time. For most organizations, testing remains one of the most under-resourced parts of the D365 lifecycle — pulling business users away from their work, creating bottlenecks at every update cycle, and introducing risk at the exact moments when stability matters most.
That is the problem this partnership is built to solve.
Why Elantis
Elantis approaches Dynamics 365 the way enterprise platforms should be approached, as long-term systems that evolve alongside the business. Their team works across the full Dynamics 365 ecosystem, from Finance and Operations to Customer Service, Sales, and Field Service, helping organizations design, implement, and optimize their environments.
Beyond implementation, Elantis supports customers across the full lifecycle of their Dynamics 365 platforms, from migrations and modernization to managed services that help organizations continuously improve their environments without the overhead of large internal teams. Their focus is on helping clients get the most value from their D365 investments while keeping systems efficient, scalable, and cost-effective.
Where TheTestMart Fits In
TheTestMart is the Microsoft-recommended test automation solution for Dynamics 365, supporting organizations globally across D365 Finance, Supply Chain Management, Commerce, Sales, and the integrations and customizations built on top of them. Our AI-powered, no-code platform covers the full ERP stack, from core modules through to ISV solutions and third-party integrations, so that every layer of a customer’s environment is validated, not just the out-of-the-box functionality.
Microsoft’s update cadence does not slow down, and neither do the demands on the teams managing these environments. Our platform automates validation so organizations can move through updates, go-lives, and configuration changes with significantly less effort and significantly more confidence — compressing test cycles from weeks to days, with results that are clear and actionable.
A Shared Commitment to the Microsoft Ecosystem
When Elantis brings us into a Dynamics 365 engagement, quality assurance stops being a final hurdle and becomes part of the process from the start. Pre-go-live validation happens automatically. Updates get absorbed without a last-minute scramble. Defects surface early, when they are inexpensive to fix. And as the environment grows, the testing framework grows with it.
Both companies are built around long-term outcomes in the Microsoft space. This partnership is a shared commitment to making Dynamics 365 delivery better for the organizations navigating it every day — whether they are going live for the first time or managing a mature, global ERP environment.
We look forward to sharing joint resources, customer stories, and practical guidance for the D365 community in the months ahead.
Over the last few years, Microsoft has talked extensively about AI in Dynamics 365. Copilot, intelligent insights, automation, and more recently, agentic AI. But for many Finance & Operations customers, the question remains the same: what does this actually mean for my ERP?
If MCP is new to you, you are not alone. In many conversations across the Dynamics community, very few people can clearly explain what it is, why Microsoft is introducing it, or why it matters. This article breaks it down in plain terms.
First, What Is the Model Context Protocol?
The Model Context Protocol, or MCP, is an open standard designed to allow AI agents to interact with software systems in a structured, secure, and governed way.
Rather than building custom, one-off integrations for every AI scenario, MCP provides a consistent framework that lets AI models understand what data and actions are available, how to access them, and what rules must be respected along the way.
Anthropic describes MCP as a way to safely connect AI models to tools, data, and services without hardcoding brittle logic or bypassing security controls. The goal is not uncontrolled automation. It is controlled, explainable, and auditable interaction.
This concept becomes especially important in enterprise systems like ERP, where data accuracy, security, and compliance are non-negotiable.
Why Microsoft Is Bringing MCP into Finance & Operations
Dynamics 365 Finance & Operations sits at the core of many organizations. It contains financial data, operational processes, supply chain logic, and business rules that cannot simply be exposed to AI without strong guardrails.
Microsoft’s introduction of the ERP MCP Server is about creating those guardrails.
By implementing MCP directly within Finance & Operations, Microsoft is enabling AI agents to interact with ERP data and business logic through governed interfaces, rather than through screen scraping, custom scripts, or fragile UI-based automation.
This aligns closely with Microsoft’s broader direction across Dynamics 365.
Instead of bolting AI on top of existing systems, Microsoft is investing in platform-level capabilities that make AI a first-class citizen: secure by default, auditable, and aligned with enterprise governance requirements.
Microsoft documents this approach in its guidance on using Model Context Protocol for Finance & Operations applications, outlining how MCP enables secure, compliant access to ERP capabilities without compromising control.
What the MCP Server Actually Enables
At a practical level, the Dynamics 365 ERP MCP Server allows AI agents to do three core things:
Read ERP data, reason over that data, and act on ERP business logic.
It does this while enforcing the same security roles, permissions, and legal entity boundaries that apply to human users.
With the release of Dynamics 365 Finance & Operations version 10.0.47, Microsoft announced the general availability of the MCP Server for production use. This availability also extends to product quality updates for earlier versions.
In this release, Microsoft expanded MCP capabilities beyond existing Form Interaction tools and API Action tools by introducing Data tools.
These Data tools allow standard create, read, update, and delete operations to be performed directly against data entities, rather than working through form-level interactions. The result is significantly improved performance, reliability, and efficiency for agent-driven scenarios.
Collectively, MCP tools now expose over 650,000 operations across the Dynamics 365 ERP suite. This effectively opens access to nearly all ERP data and business logic through governed, supported interfaces.
What MCP Looks Like in Practice
To make this more concrete, it helps to look at how MCP-enabled interactions could show up in everyday scenarios, even outside of ERP.
Seeing the full onboarding picture without system hopping
An onboarding manager is responsible for getting new customers live quickly, but the process spans CRM, billing, operations, and support systems. With an MCP-enabled assistant, they can ask a simple question like, “Where are new customers getting stuck?”
The assistant can review onboarding status across systems, identify common delays, and summarize trends. MCP is what allows that assistant to safely access each system’s data without bypassing permissions or creating custom integrations.
The same concept applies inside Dynamics 365 Finance & Operations, where system complexity and governance are especially important.
Faster issue investigation without losing control
A Dynamics 365 administrator is asked why certain vendor invoices are not posting. Using an MCP-enabled assistant, they can review invoice status, workflow history, vendor setup, and posting validations in one place.
The assistant only accesses data the admin is authorized to see, and every action follows existing business rules. The admin gets clarity faster, without custom scripts or manual table checks.
Why This Matters as Dynamics 365 Evolves
Some Finance & Operations customers are already experimenting with AI agents and intelligent automation. Many others are still evaluating what makes sense for their organization, or are waiting for clearer patterns to emerge.
In both cases, MCP is highly relevant.
The introduction of the MCP Server signals where Microsoft is taking Dynamics 365. Future capabilities will increasingly assume that systems can be interacted with programmatically, intelligently, and contextually. MCP provides the foundation that makes this possible in a secure and governed way.
This means:
Less reliance on fragile UI-based automation
More consistent and governed access to ERP capabilities
Better alignment between AI innovation and enterprise control
Whether you are actively building AI agents today or simply preparing for what comes next, MCP shapes how Finance & Operations will be extended and interacted with going forward.
MCP and Microsoft’s Direction for Dynamics 365
MCP fits squarely into Microsoft’s long-term strategy for Dynamics 365.
Rather than treating AI as a feature, Microsoft is treating it as a platform capability, one that spans Finance, Supply Chain, Human Resources, and beyond.
By standardizing how AI agents interact with ERP systems, Microsoft is creating an ecosystem where innovation can happen without sacrificing reliability or governance.
This is a positive signal for customers. It shows investment in the core platform, not just surface-level features.
How TheTestMart Is Thinking About MCP
From TheTestMart’s perspective, MCP is not just an AI story. It is a quality and trust story.
As ERP systems become more intelligent and more autonomous, confidence in outcomes becomes critical. Whether actions are initiated by users, integrations, or AI agents, the expectation is the same: the system must behave correctly.
MCP changes how interactions happen, but it does not remove the need to validate business processes, data integrity, security boundaries, and end-to-end outcomes.
We see MCP as an important step toward a more capable ERP platform, and one that reinforces the need for thoughtful testing as Dynamics 365 continues to evolve.
Plan Ahead for What’s Next
Microsoft’s introduction of the ERP MCP Server is a foundational change, not a one-off feature.
As Finance & Operations continues to move forward under Microsoft’s One Version model, understanding when changes arrive and how they impact your environment becomes increasingly important.
As part of Microsoft’s 2025 update cadence, the 10.0.45 major release for Dynamics 365 Finance and Operations (F&O) introduces a wide array of new capabilities, optimizations, and platform shifts across modules. Whether you’re an IT owner, finance analyst, or supply chain leader, this release contains important functionality to be aware of — some optional, some mandatory, and others now turned on by default.
This blog breaks down the most important changes so your team can get ahead of the curve. We’ve grouped the information using the same four categories Microsoft uses in their release documentation shown below.
Customer invoice logging framework (Preview): Enables lifecycle logging for invoices, improving traceability in the Customer invoice workspace.
Asset Leasing: Adds workflow for lease impairment, mandatory journal descriptions, and auto-posting on lease termination.
Cash and Bank Management: Auto-matches vendor accounts via IBAN and optimizes auto-settlement performance.
Electronic Reporting (ER): Includes in-app PDF conversion, enhanced label access, batch import/export options, and several performance-focused runtime features.
Fixed Assets: Adds centralized proposal creation, intercompany asset transfer (Preview), and unified catch-up depreciation posting.
General Ledger: Reverses out-of-balance ledger settlements and detects dimension variability (via flight).
Message Processor: Automates cleanup of processed and canceled messages.
Product Info Management: Foreign trade parameters enabled globally.
Preview to GA Transition: Features like Approved Customer Lists, Advanced Quality Management, and foreign trade parameter configuration are now generally available.
Commerce
Store Commerce Offline for iOS & Android (Preview): Adds offline support, SQLite integration, a new SDK, and upgraded database functionality for Store Commerce on mobile platforms.
Human Resources
Streamlined Employee Entry: Becomes mandatory with a new parameter available to disable it.
Recruiting Add-On: Now in public preview, expected to reach GA within this release.
Feature Enhancements in This Release
Finance
Accounts Receivable: Fixes incorrect totals on posted invoice journals and adds invoice details to My Cases.
Cash and Bank Management: Improves reconciliation logic and account matching.
Credit and Collections: Enhances customer interest notes and email template variable support.
Fixed Assets: Refactors asset split logic to remove dependency on localized labels.
General Ledger: Adds audit trail columns and improves support for partial ledger settlements.
Subscription Billing: Enhances billing termination logic to reuse original exchange rates for credit notes.
Supply Chain Management
Procurement:
Calculate earliest confirmed receipt date for vendor responses.
Remove vendors from RFQs after bids have been sent or received.
Production Control:
Improves decimal precision for numpad input on production floor interface.
Shared AP/AR:
Enables multiple batch tasks for rebate processing.
Features Turned On by Default
Finance
Accounts Receivable: Custom search, penny difference voucher support, free text invoice tag support.
Cash and Bank Management: Expanded bank reconciliation settings, including prepayment logic and exchange rate usage.
Credit and Collections: Separate accounts for credit notes (Mandatory).
Fixed Assets: Numerous features including automated depreciation split logic and prevention of asset creation via project PO (some Mandatory).
Tax: Tax exemption defaults, batch sync, and external provider support (some Mandatory).
Supply Chain Management
Asset Management: Print work order attachments, role-based lifecycle access, forecast hour adjustments.
Inventory & Warehouse: Inventory Visibility integrations, dimension history cleanup, reservation offsets, soft reservation on SO lines.
Production Control: Streamlined registration for indirect activities, validation logic for expiration, and job progress tracking.
Sales & Marketing: Product bundle journal integration and performance optimizations.
Duplicate ID Prevention and Streamlined Employee Entry are both Mandatory by default.
Features Removed from Feature Management
Finance
ER format lookups, Globalization Studio features, and legacy ER PDF conversion replaced by in-app methods.
Multiple obsolete or localized AR features (e.g., Lithuania VAT label) removed.
Tax-related feature controls such as Czech zero-amount logic and payment report generation are now default.
Supply Chain Management
A range of previously feature-managed modules—including procurement workflows, cost logic, production control toggles, and inventory behavior filters—have been removed or consolidated.
Final Thoughts
The 10.0.45 release continues Microsoft’s focus on performance, automation, and simplification — with the most impactful changes landing in Finance and Supply Chain Management. From updates to bank reconciliation, Electronic Reporting, and subscription billing in Finance to new capabilities in production, inventory, and warehouse management in Supply Chain, this release brings valuable improvements across core operational areas.
We recommend reviewing your organization’s Feature management workspace to see which updates require manual enablement and aligning with your internal change calendar before the October auto-update window.
Managing each Microsoft update can be time-consuming — especially when manual testing slows you down. TheTestMart is here to help. If you’re unsure where to focus your testing efforts or want to speed up validation, we can help reduce the risk of every release and free up your team to focus on higher-value work.
A few members of our leadership team attended the Biz Apps Partner Executive Summit last week. Microsoft shared a clear vision for the future of Dynamics 365 and the role of AI in transforming business applications. Below, Dan Diefendorf, TTM’s CEO, shares his perspective on the key takeaways and how they align with what we’re building at TTM.
Last week’s Biz Apps Partner Executive Summit reaffirmed Microsoft’s commitment to AI and the rapid growth of the Dynamics 365 platform. In our team’s visit with Microsoft, this was underscored as we discussed direct industry scenarios where AI can help create previously unknown efficiencies- especially customers seek deeper and meaningful insights from connected systems into their D365 instances. As partners, we were urged not only to offer AI-powered solutions but to become “customer zero”—adopting tools like M365 Copilot and D365 pre-built agents internally to understand and demonstrate their value. But this is only the starting point and many partners are beyond internal adoption and building foundational solutions for customers real-time.
From my perspective, this resonates deeply with our approach at TTM. We’re seeing the benefits firsthand: by embedding AI and agentic thinking into our products and workflows, we’ve compress our time to ship, turnaround customer feature requests faster, and have full observability across all our tech stack and those we touch. AI is now a catalyst for faster, more secure innovation.
Microsoft also emphasized that Dynamics 365’s growth is accelerating—Business Central’s expansion is “stunning”—and that partners must align with FY26 priorities: copilots on every device, strong M365/D365 execution, frontier AI solutions, and secure cloud migrations. At TTM, we’re leveraging these priorities to help customers modernize their testing processes, gain deeper insights, and ensure end-to-end compliance and security across their business applications.
Embracing AI internally has been a game-changer for us. It’s given our team the confidence to guide customers through their own AI journeys.
But the impact goes beyond technology. Adopting AI has reshaped how we think about hiring and culture. We look for people who are curious about AI, eager to learn, and who value collaboration over silos. It’s not just about recruiting data scientists and engineers. It’s about finding teammates who are comfortable working alongside AI and who see it as a tool to amplify human potential. And while AI can do amazing things, we never lose sight of the people behind the tools. Investing in their training and providing the right support is essential to making AI work responsibly and securely.
In short, the future of business applications is AI-first.
As the Dynamics 365 ecosystem continues to evolve at pace, it’s clear that AI isn’t just an enhancement—it’s becoming the foundation for how modern businesses operate. At TTM, we’re committed to staying at the forefront of this transformation, both by adopting these tools internally and helping our customers unlock their full potential. The insights and momentum from the Biz Apps Summit only strengthen our focus: building smarter, faster, and more resilient solutions for the future of business applications.
