Dynamics 365 Finance & Operations 2025 release wave 1

Discover the 2025 release wave 1 of Microsoft Dynamics 365 Finance & Operations

Microsoft has released the plans for 2025 release wave 1 of Dynamics 365 Finance & Operations (D365 F&O). D365 F&O consists of two applications: D365 Finance and D365 Supply Chain Management. The 2025 wave 1 updates focus on AI improvements, usability, automation, and new features to streamline financial and supply chain processes.

In this blog, we will explore the key updates and features released in the 2025 release wave 1 for these applications.

• Dynamics 365 Finance
• Dynamics 365 Supply Chain Management

Create dimensions and cubes faster with Copilot

The 2025 release wave 1 of Dynamics 365 Finance brings the ability to create dimensions and cubes using Copilot. Organizations traditionally spend a lot of time reviewing Excel sheets or previous planning tools when configuring planning models. With this update, Copilot will analyze existing spreadsheets to offer guided recommendations for dimensions, cube structures, formulas, and values.

This will simplify and speed up the implementation of planning software. Instead of manually defining and configuring every aspect, users can use Copilot to set up planning models. As a result, organizations can reduce the time from initial configuration to go live, minimize disruption, and maximize efficiency.

Automate account reconciliation tasks with AI-powered agents

The 2025 release wave 1 brings proactive reconciliation to the Account reconciliation agent workspace in D365 Finance. Instead of waiting until period-end, the new Copilot feature will continuously monitor subledger-to-general ledger balances. Users will receive immediate notifications when discrepancies occur, along with clear, actionable recommendations to resolve.

Key features:

• Proactive notifications: Copilot will identify discrepancies and notify users before they become issues.
• Recommended actions: Users will get detailed suggestions on how to fix reconciliation exceptions, such as adjusting main account settings or correcting posting profiles.
• Audit trail: Every reconciliation issue, recommendation, and action taken by Copilot will be tracked, to ensure transparency and compliance.
• Continuous improvement: Over time, Copilot will learn from past resolutions and move towards automated issue resolution.

Business performance planning and analytics

The 2025 release wave 1 of Dynamics 365 Finance brings several key updates to business performance planning and analytics. Features include planning, decision-making, flexibility, and global accessibility to help organizations respond to dynamic market conditions and optimize business performance.

Key features:

• Outlier detection in planning: Automates outlier detection and visualization so users can quickly spot anomalies. Users can exclude outliers from planning scenarios to get more accurate and reliable forecasting.
• More frequent data refreshes: Business performance analytics now supports two data refreshes a day. Incremental data processing means faster updates by only processing new or modified data, improving operational efficiency and responsiveness.
• Managed extensibility of data models: Provides flexibility by allowing seamless integration of D365 extensions and custom data sources into analytics models. Customers can add custom fields using placeholder fields and star schemas, so analytics are tailored to their business needs.
• Multilingual support: Expands accessibility by introducing multilanguage support for data, metadata, schema, and interface. This accommodates global users, reduces language barriers, facilitates international collaboration, and improves user engagement.

Asset management with Acquire to Dispose data model

The Acquire to Dispose (A2D) data model in D365 Finance gives organizations greater visibility and control over their asset lifecycle. By tracking assets from acquisition to disposal, this model reduces errors, saves time, and supports strategic financial planning. Users get dimension-based reporting to identify cost savings, optimize asset usage, and drive better financial outcomes.

Key capabilities:

• Comprehensive asset lifecycle management: Covers asset acquisition, depreciation, maintenance, valuation, and disposal in one data model.
• Dimension-based analysis: Allows customized reporting and granular insights into asset performance, usage patterns, and cost trends.
• Better efficiency: Reduces asset tracking errors and ensures timely and accurate asset valuations and disposals.
• Improved compliance: Supports accurate depreciation calculations and tax management to improve compliance and reporting.
• Better decision-making: Informs decision-making with asset tracking, financial visibility, and optimized asset investment.

Simplify journals with ledger account-only journals

Dynamics 365 Finance introduces a new journal framework in 2025 release wave 1, initially supporting ledger account-only journals. This framework improves financial journal performance, addressing common user issues such as poor performance, multi-company limitations, and lack of transaction visibility. By moving validation and posting to the voucher level, the new structure gives more flexibility, accuracy, and workflows.

Key features:

• Faster performance: Much faster import, validation, and posting, even for large journals, improving daily and period-end efficiency.
• Multicompany journal entry: Users can enter vouchers across multiple companies in one journal based on security access.
• Voucher-level processing: Validation, approvals, and posting can start at the journal level but are executed per voucher, improving accuracy and control.
• Voucher type categorization: Introduces specific voucher types for better transaction tracking and lifecycle management.
• New OData and DMF entities: Easier and more flexible integration and data management for the new journal structure.

Bank account reconciliation

The 2025 release wave 1 of Dynamics 365 Finance brings significant improvements to bank account reconciliation. These updates simplify workflows, reduce manual effort, and improve accuracy so financial teams can reconcile bank accounts faster. Enhanced reconciliation features include direct payment journal management, advanced matching preview, rule duplication, and more detailed reporting.

Key features:

• Cancel customer payment journals from reconciliation worksheet: Users can now reverse posted customer payments from within the bank reconciliation worksheet. This reduces errors, simplifies customer payment management, and ensures financial records are correct.
• Preview automatic matching results: Users can preview matching results, simulate matching rules, and handle exceptions proactively during bank reconciliation. This reduces discrepancies by allowing selective review and verification of exceptions before posting.
• Duplicate matching rules to save time: Users can duplicate existing bank reconciliation matching rules to save configuration time and ensure consistency. Rules can be tailored for unique transactions to improve accuracy and flexibility.
• More detailed bank reconciliation reporting: Bank reconciliation reports now include trading party details, voucher numbers, and voucher descriptions. This provides better clarity and more insights during reconciliation.

Fixed Asset management

D365 Finance introduces improvements to fixed asset management in 2025 release wave 1 to improve accuracy and efficiency. Businesses get more flexibility and precision when managing asset splits and intercompany transfers. This simplifies complex processes, supports better audit trails, and ensures compliance across companies.

Key features:

• Better fixed asset splitting: Users can now split fixed assets by amount or percentage and choose between spot or historical exchange rates for reporting. A new preview feature shows asset values before and after split in both accounting and reporting currency and a detailed audit trail is shown on the Fixed asset split list page.
• Simplified asset transfer between companies: Asset transfer between companies is now simpler and more automated. Users can select source assets, preview key financial details (acquisition cost, depreciation, net book value), and automate the creation of destination assets. The system manages disposal postings in the original company and acquisition postings in the target company, reducing manual effort and ensuring data is correct.

Additional updates in Dynamics 365 Finance 2025 release wave 1

In addition to the above updates, the 2025 release wave 1 of D365 Finance includes:

• Direct financial planning integration: Users can now integrate financial planning data to Business performance analytics tables. This simplifies planning, reduces manual entry, provides real-time data, and cuts operational costs. Users can select, transform, and import data tables into Dataverse and ensure accurate and timely analysis.
• Better bank account management: Advanced workflows for bank account opening, modification, and closing with built-in approvals and configurable protected fields. Access audit trails on account changes and additional signer details for compliance and security.
• Single journal for multiple vendor payments: Users can consolidate multiple vendor payment lines into one payment journal during bank reconciliation. This simplifies reconciliation, reduces errors, and gives flexibility in how journals are grouped.
• Improved user security and licensing management: New tools to manage security roles, audit licenses, and track violations. Reports on license usage and separation-of-duty conflicts help optimize software investment and compliance.
• Cross-company data analysis through accounting source explorer: Accounting source explorer now supports multi-company transactional data views and simplified data export to Excel. This makes it much faster to do cross-company financial analysis.
• More financial tags: Financial tags are now available in accounting source explorer and in the Record to Report data model in Business performance analytics. Users can add tags as analytical dimensions and get more precise and flexible financial reporting.
• Financial tags for purchase order invoicing: Organizations can apply financial tags directly to purchase orders, receipts, and invoices to get clearer transaction tracking without the performance overhead of traditional financial dimensions. Up to 20 custom fields can be used to add more analytical depth to procurement-related financial activities.

New supplier communications agent

In the 2025 release wave 1 of Dynamics 365 Supply Chain Management, Microsoft introduces the supplier communications agent, which automates most of the manual procure-to-pay tasks. The agent helps procurement teams reduce repetitive administrative work like tracking vendor emails or updating purchase orders. By automating these interactions, businesses increase efficiency, improve responsiveness, and increase procurement productivity.

Key features:

• Auto vendor follow-ups: The agent drafts ready-to-send emails for common tasks like checking on delayed orders or asking suppliers to confirm purchase orders.
• Automated purchase order updates: Incoming vendor emails are analyzed by the agent, identifying confirmations and change requests, and updating purchase orders according to predefined rules.
• More procurement efficiency: By reducing manual work, the agent allows procurement staff to focus on strategic tasks, leading to a more resilient and agile supply chain.

Use follow-up questions in Copilot

Dynamics 365 Supply Chain Management introduces follow-up questions in Copilot in the 2025 release wave 1. Users can now easily extend conversations within Copilot’s contextual help by selecting automatically generated follow-up questions. Instead of typing new queries, users can just click on the questions and get rapid access to information and guidance.

Key features:

• Auto-generated follow-up questions: Copilot suggests questions based on previous interactions and provides intelligent guidance to the user.
• Seamless conversation continuation: Users can have productive conversations without having to type new queries.
• AI-powered contextual help: Copilot provides conversational answers to natural language questions and supplements with intelligent follow-up suggestions.
• Out of the box: This feature is part of the Copilot sidecar and requires no setup and is available across all tasks.

Lean manufacturing, catch weight, and step consumption

Dynamics 365 SCM expands Planning Optimization capabilities in the 2025 release wave 1. New support for lean manufacturing, catch weight pricing, and step consumption gives businesses more flexibility and precision in their production planning. This results in lower operational costs, less waste, and better supply chain responsiveness.

Key features:

• Lean manufacturing: Enables companies to implement lean principles within the planning engine to maximize customer value and minimize waste through continuous improvement.
• Catch weight: Accurate planning and pricing for products sold by actual weight, required for industries like meat, seafood, and fresh produce.
• Step consumption: Non-linear consumption rates in material usage based on specific production quantities for process manufacturers.

Demand forecasting and planning

In the 2025 release wave 1 Dynamics 365 Supply Chain Management, Microsoft has improved demand forecasting features to help organizations optimize their planning. The new features provide advanced analytics and more accurate forecasting to help companies manage their supply chain better and improve financial performance.

Key features:

• Assortment planning: Allocate demand forecasts across multiple dimensions like products, customers, or sales channels based on custom criteria.
• Time freeze: Define specific periods where continuous forecast calculations pause and update to baseline forecasts to ensure planning stability during critical times.
• Forecast with signals: Incorporate multiple data signals into forecasts, selecting from Prophet, XGBoost, or an automated best-fit forecast model for more accuracy.
• Automatic seasonality detection: Automatically detect seasonality patterns across product and location dimensions to improve forecast reliability and precision.

Simplified contract lifecycle management integration

Managing supplier contracts in the source-to-pay process is critical but often complicated by disconnected systems. Dynamics 365 Supply Chain Management simplifies this by integrating with external contract lifecycle management (CLM) systems. Users can directly align purchase agreements and contractual terms without manual effort.

Benefits and features:

• Flexible external CLM integration: Connect to external systems and reduce friction in managing supplier contracts and agreements.
• Seamless purchase agreement management: Ensure automatic alignment of pricing and terms directly from contracts and enhance procurement accuracy and efficiency.
• Built-in rules and integration points: Standardized integration simplifies implementation and supports both purchase and non-disclosure agreements using master data from Supply Chain Management.
• Improved compliance and accuracy: Minimize errors and streamline supplier interactions by enforcing agreed contractual terms.

Supplier relationships and collaboration tools

The 2025 release wave 1 improves supplier relationship management in D365 SCM. Procurement teams now have a centralized dashboard to consolidate supplier data and interactions across multiple legal entities. An improved supplier portal also enhances collaboration, to onboard, communicate, and transact with suppliers.

Key features:

• Centralized relationship management: View supplier performance data, manage appointments, schedule periodic reviews, and monitor potential suppliers through a single Power Apps interface.
• Supplier portal: Built on Microsoft Power Pages, the new portal simplifies onboarding and transactional collaboration including RFQs, purchase orders, and invoicing.
• Improved collaboration: Integrates with existing vendor collaboration in Supply Chain Management for smoother and more productive supplier interactions across strategic and operational tasks.

More flexibility in vendor rebate management workflows

Vendor rebate management sees big improvements in Dynamics 365 Supply Chain Management 2025 release wave 1. New features give clerks more flexibility when managing and reconciling vendor rebates. Instead of relying on fixed vendor settings, clerks can now reconcile rebates directly with transactional vendors. This makes rebate processes simpler, workflows more streamlined, and financials more accurate.

• Vendor rebate workflow resubmission: Clerks can edit and resubmit rebate deals for more accuracy and flexibility in managing vendor agreements.
• Flexible posting profiles: Transactions can be reconciled with vendors based on actual purchases instead of fixed vendor assignments.
• Consolidated invoice outputs: Multiple ledger lines for a single vendor combined into one vendor invoice line to simplify reconciliation and financial tracking.

Enhanced supply chain visibility with tracking attributes

The 2025 release wave 1 of Dynamics 365 Supply Chain Management has improved supply chain traceability with tracking attributes. These features allow detailed monitoring and analysis of products, batches, and serial numbers. Quality, sales, and production managers can now easily access and analyze tracking data to quickly identify deviations or issues in the supply chain.

Core features:

• Detailed data collection: Configure and assign data collection to business activities and codes to capture precise measurements and attributes for traceability.
• Attribute retrieval: Retrieve all recorded measurements and attributes for individual batches, serial numbers, assets, or lot numbers to analyze effectively.
• Where-used searches: Search based on specific attributes or measurements, like all products produced under defined conditions, to resolve issues and make better decisions quickly.

What to learn more?

The above updates, features, and enhancements are just a few of what’s available in Dynamics 365 Finance & Operations 2025 release wave 1. Start using them today to boost productivity, efficiency, and accuracy in your financial and supply chain processes. To fully use, optimize, and get the most out of your system, we recommend you work with a Microsoft Dynamics 365 Finance & Operations consulting partner.

The right Dynamics 365 Finance & Operations partner will guide you through each step of adopting and implementing new features. Experienced consultants bring valuable expertise, tailored support, and strategic insights to help you navigate the complexities and get the most out of your system. By working with experts, you can optimize your Dynamics 365 F&O environment.