Microsoft Business Central 2026 Release Wave 1 (Version 28): 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.

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.

Updated October 2026: release dates verified against Microsoft's release plan, and the 2026 release wave 2 (version 29) is now rolling out.

Key Takeaways

• ▸Business Central 2026 release wave 1 is version 28, released from April 2026 with monthly updates through September 2026.
• ▸Headline additions: the Expense Agent (public preview from 8 May 2026), native quality management (GA 1 April 2026) and manufacturing subcontracting (GA 8 July 2026).
• ▸Finance gains excise tax (GA May 2026), self-billed invoices (GA June 2026) and withholding tax for vendors (preview April 2026, GA planned October 2026).
• ▸Developers can run AL tests from VS Code, download symbols from NuGet and debug agent sessions.
• ▸Business Central 2026 release wave 2 (version 29) started rolling out in October 2026.

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 and release wave 2 in October, each with a new major version. The 2025 release wave 2 was version 27, the 2026 release wave 1 is version 28, and the 2026 release wave 2 is version 29. 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 by an experienced Business Central team. PapaSiddhi Technologies supports these upgrades, 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.

Custom Agents and the MCP Server

Microsoft is also opening agent building to customers and partners, so teams can create custom agents for their own processes — check Microsoft's current documentation for availability in your region before planning around it.

The enhanced MCP (Model Context Protocol) Server capabilities in Wave 1 are enabled automatically in Business Central environments. 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 (public preview from April 2026, with general availability planned for October 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), per the Microsoft Dynamics 365 Business Central pricing page — regional pricing varies, so contact a Microsoft CSP partner for your market:

• ▸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

What Comes Next: 2026 Release Wave 2 (Version 29)

Business Central version 29 — the 2026 release wave 2 — began rolling out in October 2026, with monthly updates through March 2027. Note that Microsoft has stopped publishing its traditional release-plan pages from September 2026, so track new features through Microsoft Learn's "What's new" documentation and your admin center notifications. SaaS customers receive an update window before version 29 installs automatically, so test your AL extensions in a sandbox during that window.

Planning Your Business Central Upgrade

For SaaS customers, use each update window to test custom AL extensions, validate integration connections (particularly any Dataverse or Power Automate flows), and review new features such as quality management and the Expense Agent 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.

How PapaSiddhi Can Help

Our Business Central team helps growing businesses in the UK, Netherlands, Denmark, UAE and USA get value from each release wave — from upgrades and AL extension development to Copilot and agent enablement. Comparing ERP options first? Read Business Central vs Dynamics 365 or our Business Central guide for manufacturing companies. You can also hire a dedicated Business Central developer. Contact PapaSiddhi Technologies for an upgrade readiness review.

Related case studies: multi-entity Business Central with ZATCA e-invoicing (Saudi Arabia).