What’s New in Dynamics 365 Business Central 2026 Release Wave 1

The 2026 release wave 1 for Dynamics 365 Business Central has new functionalities and enhancements that will be released between April 2026 and September 2026. Some features are available now, and some will be released in the coming months.

Microsoft continues to move quickly with Dynamics 365 Business Central, and the latest updates focus on less friction, more intelligence, and better control across finance, supply chain, and operations to help deliver practical improvements that automate manual work, improve accuracy, and reduce operational overhead.

There are some great enhancements to look forward to, but below I will highlight some of the features that stand out to me.

AI Agents Continue to Expand with a Focus on Expense Management

One of the most impactful developments in Business Central is the continued expansion of Copilot and AI agents, with a new Expense Agent to be added soon. This has not been released yet; it is scheduled for release in mid-May.

This agent is designed to help streamline expense-related workflows, therefore reducing manual effort, improving consistency, and accelerating approvals. What’s notable is how quickly these agents are evolving. That pace signals where Microsoft is investing most heavily: embedded intelligence that works inside real-world processes, not beside them.

For customers, this means:

• Less time spent reviewing and correcting expenses.

• Faster turnaround from submission to posting.

• More consistency across teams and departments.

Below is a screenshot from Microsoft’s video demonstrating the Expense Agent, showing the selection of multiple receipts at once to capture expenses, which are then processed automatically in the background, and the agent extracts the key information to create the report:

We will monitor this agent’s release and share more information as it becomes available. For now, you can read more about this Agent in Microsoft’s announcement or see the agent in action in this Expense Agent in Dynamics 365 Business Central Microsoft video.

Smarter Document Storage with External File Support

Storage costs can creep up quickly when large volumes of documents, such as PDFs, invoices, receipts, and spreadsheets, are stored directly inside Business Central. A new enhancement introduces external document storage, allowing organizations to better manage where and how files are retained.

With this capability, documents can:

• Be retained in Business Central for a defined period.

• Automatically moved to external storage (such as SharePoint or Azure storage).

• Be removed from Business Central without losing access or traceability.

The screenshot below shows an ‘Upload and Delete Policy’ that you can enable after the file has been uploaded to the external storage:

The result is better cost control, improved performance, and a more sustainable long-term document strategy, especially for organizations with high transaction volumes.

Quality Management Built-In

One of the most significant supply chain updates is the introduction of a native Quality Management module in Business Central.

Previously, quality tracking often required third-party extensions. Now, organizations can manage:

• Quality inspections.

• Acceptance and rejection criteria.

• Quality-related workflows directly within Business Central.

For manufacturers and distributors, this brings better visibility into product quality without adding system complexity or additional licensing. Microsoft highlights the Quality Management capabilities in this video.

Drop Shipment Enhancements

The feature to post purchase invoices for drop shipment scenarios, where vendor invoicing is independent of customer billing, improves flexibility for complex shipping and invoicing workflows.

Financial Management Enhancements That Improve Accuracy and Compliance

Several financial updates stand out in this release, particularly for organizations dealing with complex tax and asset scenarios.

Excise Taxes

In this release, Business Central will help businesses by automating excise tax calculations, making it easier to apply the right tax rules for different products and regions. This will also help reduce manual effort and minimize the risk of costly mistakes or penalties.

Withholding Taxes

Business Central will include built‑in capabilities for setting up, calculating, and reporting vendor withholding taxes in all applicable countries and regions. This functionality will be available in the standard version of Business Central, removing the need for customizations or third-party solutions.

Accelerated Depreciation Options

With accelerated depreciation, organizations can account for faster asset consumption automatically without manual calculations or external tools. Accelerated depreciation will be a standard depreciation method for fixed assets. This automation improves accuracy, streamlines administration, and provides better insight into how accelerated depreciation compares to linear methods.

Self-Billing Invoices Simplify Vendor Processes

A notable addition to purchasing teams is self-billing invoices, which can streamline the traditional three-way matching process. This approach allows organizations to generate invoices based on agreed purchase orders and receipts without waiting for vendors to submit invoices.

This removes the need for vendors to submit invoices, provided a mutual agreement is in place. For high-volume or long-term supplier relationships, this can significantly streamline accounts payable operations.

Here is an example of a self-billing invoice:

Shopify Integration Improvements

This release includes multiple improvements to the Shopify connector. One to note is that the Shopify connector now supports multiple product images and item variants. This enhancement adds support for syncing item variant images from Business Central to Shopify product variants, expanding beyond the previous item‑level image synchronization.

Reporting and Data Analysis Enhancements

This Business Central release includes enhancements to reporting and data analytics. There are enhanced Power BI capabilities, upgraded Excel integration, modernized inventory reporting, and enhanced sales analytics, to name a few.

There is a new tile view for a quick report overview that, with smarter workflows and faster setup, makes it easy to define report properties once and reuse them everywhere, organize reports for better navigation, manage definitions over time, and audit report usage.

Here is a screenshot that Microsoft included in the release notes of what the report overview looks like:

Sustainability Tracking Continues to Mature

Sustainability management continues to evolve in Business Central, with enhancements to carbon tracking, ESG-related reporting, and document layouts.

While adoption varies by region and industry, these capabilities are becoming increasingly relevant as sustainability reporting requirements expand. For organizations preparing for future regulatory or customer-driven ESG expectations, this functionality lays important groundwork.

What’s Next?

Microsoft continues to evolve Dynamics 365 Business Central with new features, capabilities, automations, and improvements. For the full list of new features, enhancements, and release dates, please see Microsoft’s What’s New and Planned post.

Encore is committed to helping our customers identify and leverage specific changes that are relevant and beneficial to their business.

If you have questions about this release wave or readiness for future releases, please reach out to your Encore account manager or contact us.