Microsoft Business Central 2026 Release Wave 1 — Key Features for Growing Businesses

Microsoft Business Central 2026 Release Wave 1 delivers significant new capabilities across AI automation, supply chain management, financial compliance, and developer tooling. This update — versioned as Business Central 28.x and covering April through September 2026 — builds on the agent investments from 2025 with a new Expense Agent and the general availability of built-in quality management and manufacturing subcontracting.

At PapaSiddhi Technologies, we have been implementing and upgrading Microsoft Business Central for clients across the UK, Netherlands, Denmark, UAE, and USA for years. This guide summarises the most impactful changes in Release Wave 1, based on the official Microsoft Learn release plan, and what they mean for your business.

What Is Business Central 2026 Release Wave 1 (Version 28)?

Microsoft releases Business Central updates in two waves each year: Release Wave 1 in April (version 28.x) and Release Wave 2 in October (version 27.x). Each wave covers approximately six months of new features, compliance updates, and platform improvements.

For Business Central SaaS (cloud) customers, Wave 1 updates arrive automatically — no manual upgrade, no downtime, and no licence change required. Microsoft makes preview environments available earlier in the year so customers and partners can test custom AL extensions before the production rollout.

For on-premises Business Central customers, upgrading to version 28 requires a planned migration with a Business Central partner. PapaSiddhi Technologies manages these upgrades for clients, covering extension compatibility testing, data migration, and cutover planning.

Wave 1 2026 is built around five major themes: autonomous AI agents, financial compliance improvements, supply chain quality and manufacturing capabilities, sustainability tracking, and developer platform upgrades.

AI Agents: The Headline Feature of Wave 1 2026

The most significant story in Business Central 2026 is the expansion of autonomous AI agents — software that can execute complete business processes end-to-end without constant user intervention.

Payables Agent (Generally Available)

The Payables Agent, which reached general availability in late 2025 and has been expanded to additional countries in Wave 1, monitors shared vendor email mailboxes, reads invoice attachments, matches invoice lines to purchase orders using AI, and routes exceptions for human review. For businesses handling high invoice volumes — manufacturing, distribution, retail — this substantially reduces manual effort in accounts payable processing.

Wave 1 2026 adds the ability for users to see a full log of which emails the Payables Agent has already processed, making audit trails and exception handling straightforward. The agent is expanding to additional countries and languages throughout the wave period.

Expense Agent (Preview — May 2026)

The Expense Agent is the major new autonomous agent introduced in Wave 1 2026, entering public preview on production environments from May 2026. It automates end-to-end expense management: employees submit receipts by email or mobile app, the agent extracts key data (amount, vendor, date, category), detects duplicate submissions, generates expense reports automatically, and routes them through approval workflows.

A dedicated Expense Management module adds itemisation, per diem and mileage tracking, approval chains, and reimbursement posting. Mobile capture of expenses and multi-language support (German, Danish, French, Spanish) are targeted for later in the Wave 1 period.

Agent Designer and the Enhanced MCP Server

Agent Designer, reaching preview on production environments in May 2026, allows any Business Central team to build custom autonomous agents using natural language descriptions and AL code — without specialist AI development skills.

The enhanced MCP (Model Context Protocol) Server is now mandatory and enabled by default in all Business Central environments from April 2026. This allows Business Central to be connected as an MCP endpoint by any MCP-compatible AI client — including external AI tools, custom copilots built with Copilot Studio, and development environments like VS Code. For organisations building AI workflows that span multiple applications, this is a significant architectural capability requiring no custom development.

Finance and Accounting Enhancements

Wave 1 2026 delivers substantive finance module improvements that benefit all users regardless of AI agent licensing.

Excise tax calculation (generally available from May 2026) adds a native excise tax engine for businesses dealing with alcoholic beverages, tobacco, fuel, or similar goods subject to excise duties — reducing the need for third-party add-ons or workarounds.

Withholding tax for vendors (generally available from June 2026) provides a built-in withholding tax framework for vendor payments. This is an important compliance requirement for clients in Denmark, the Netherlands, UAE, and other regions where withholding tax obligations apply to certain vendor categories.

Self-billed invoices (generally available June 2026) supports buyer-created tax invoices — a common procurement arrangement in industries where buyers have better visibility of delivery quantities than the vendor.

Investment Boost for fixed assets (generally available May 2026) supports accelerated investment deductions, aligning Business Central with UK capital allowances and European investment incentive schemes.

Financial reporting also improves in Wave 1: enhanced deferral analysis reports, faster trial balance reporting, and a rebuilt financial reporting engine. An enhanced Subscription Billing Power BI app is included at no additional licence cost.

Supply Chain: Quality Management and Manufacturing

Built-In Quality Management (Generally Available — April 2026)

One of the most significant supply chain additions in Wave 1 2026 is native quality management. Business Central 28 introduces quality inspection processes directly on the platform: organisations can create quality inspections for incoming goods and materials, track non-conformances, generate certificates of analysis, and manage quality control workflows — all within Business Central, without a third-party add-on. Enhanced Word report layouts and demo data are included and further expanded in the June 2026 (28.2) update.

For manufacturing, distribution, and food and beverage businesses subject to quality requirements, this removes a gap that previously required separate quality management software.

Subcontracting in Manufacturing (Generally Available — July 2026)

Native subcontracting capabilities arrive in Wave 1 2026, allowing businesses to route specific production order operations to external vendors and track subcontracting costs and delivery within Business Central's manufacturing module. This is a long-requested feature that reduces the workarounds previously needed to manage outsourced manufacturing steps.

Additional supply chain improvements include improved drop-shipment handling (purchase invoices can now be posted independently of related sales invoices), better planning behaviour for items at locations without SKUs, requisition worksheet approvals, and improved item variant management (item attributes and images per variant).

Sustainability and ESG Compliance

Sustainability reporting requirements continue to grow for UK, Dutch, and Danish businesses in particular. Wave 1 2026 extends Business Central's sustainability capabilities with sales document report layouts that display carbon footprint data per item and transaction — enabling organisations to include sustainability information on customer-facing documents such as sales invoices.

New Sustainability APIs (preview April 2026, general availability planned June 2026) provide better integration for organisations feeding Business Central sustainability data into external ESG reporting platforms or carbon accounting systems. Scope 3 value chain emissions tracking continues as a Wave 1 investment area.

Shopify and E-Commerce Connector Updates

Wave 1 2026 delivers meaningful improvements to the Shopify connector. Administrators can now: assign custom Shopify collections to items exported from Business Central, define product options in Shopify based on Business Central item attributes, sync product variant images between both systems, and handle checkout currency correctly when generating Business Central sales documents from Shopify orders. For retailers managing their product catalogue in Business Central and selling through Shopify, these updates reduce manual synchronisation steps.

Power Platform and Microsoft 365 Integration

Dataverse field mapping (generally available April 2026) allows administrators to map newly added Dataverse fields to Business Central tables without waiting for a platform release — improving Power Platform integration flexibility.

Four enhanced Power BI apps are available at no additional licence cost in Wave 1 2026: Finance, Sales, Supply Chain, and Subscription Billing. All Business Central Power BI apps are now open-source on GitHub, allowing customers to fork and customise them. The updated Outlook integration (generally available April 2026) improves the Microsoft 365 add-in for Business Central contact and record management tasks.

Developer Platform: MCP Server, AL Tools, and VS Code

For businesses with custom Business Central extensions, Wave 1 2026 brings significant improvements to the AL developer tooling.

AL tests can now be run directly from Visual Studio Code through an integrated test runner — eliminating the need for separate test execution tooling and making test-driven AL development accessible. Extension symbols can be downloaded from NuGet feeds, supporting modern CI/CD pipeline architectures for Business Central development teams.

Developers can attach a debugger to running agent sessions, enabling step-by-step inspection of autonomous agent behaviour — essential for testing and maintaining agent-based customisations. New security controls for partner Copilot extensions provide cross-prompt injection attack (XPIA) mitigations, ensuring custom AI features built by third-party developers meet enterprise security requirements.

Business Central Pricing in 2026

Microsoft increased Business Central list prices in November 2025. Current pricing per user per month (paid annually, USD):

• ▸Essentials: $80 per user per month — financial management, sales, purchasing, inventory, warehousing, and project management
• ▸Premium: $110 per user per month — Essentials plus full manufacturing (production orders, BOMs, capacity planning) and service management modules
• ▸Team Members: $8 per user per month — limited access for approvals, time sheets, and read-only data access

Planning Your Wave 1 2026 Upgrade

For SaaS customers, preview environments are available now. Use this window to test custom AL extensions against version 28, validate integration connections (particularly any Dataverse or Power Automate flows), and review the new quality management and Expense Agent features with your operations and finance teams.

For on-premises customers on Business Central 2024 or earlier, begin planning the upgrade 3 to 6 months in advance. PapaSiddhi Technologies provides upgrade services including technical assessment, extension compatibility testing, data migration, and user training for new Wave 1 capabilities.

Our Business Central team specialises in helping growing businesses across the UK, Netherlands, Denmark, UAE, and USA maximise the value of each release wave. Contact PapaSiddhi Technologies for a Wave 1 readiness assessment — we will review your current extensions and customisations, identify any changes needed for version 28 compatibility, and outline a realistic upgrade timeline and investment.