Microsoft expands Copilot features for accounting and tax workflows

Automating the financial close

Microsoft has significantly expanded the finance capacities of its Copilot AI platform to support core bookkeeping operations. The system is now designed to organize and track activities for month-end, quarter-end, and year-end closes. This includes managing checklists, identifying task owners, and monitoring due dates and approvals.

One of the primary functions of the update is the ability to perform reconciliations. The AI compares balances and transactions across various sources, such as bank statements, vendor records, and general ledgers. It identifies discrepancies like duplicate entries or missing records and prepares proposed corrections for human review.

To ensure accuracy in these sensitive tasks, Microsoft added a specific feature in Excel. Professionals can now start an audit trail whenever they use an accounting capability. This creates a record in the chat history that documents exactly what Copilot changed and the reasoning behind those specific actions.

Audit and tax support tools

The update introduces tools specifically for audit, tax, and compliance workflows. For auditors, Copilot can help plan and document both internal and external audits by selecting samples and testing controls. It can also trace transactions back to source records and track the results of those tests.

Tax professionals can use the AI to prepare analyses, supporting calculations, and workpapers for tax planning and compliance. The system is capable of estimating payments, reconciling tax accounts, and tracking filing requirements. It can also identify specific issues and due dates found in tax notices while documenting the underlying assumptions.

Compliance support is another major addition to the platform. The AI can test accounting controls to ensure adherence to company policies and prepare regulatory reports. It also documents test results, identifies exceptions, and tracks the owners and due dates for any necessary corrective actions.

ERP and data integrations

Microsoft is making it easier for finance teams to pull data from their primary systems of record. A new Dynamics 365 ERP apps plugin allows accountants to prepare journal entries and supporting schedules using data directly from their existing systems. This helps bridge the gap between raw data and actionable financial documents.

The platform also includes a plugin for Fabric IQ, which makes governed Microsoft Fabric data more accessible. This allows finance teams to take reports and semantic models from Microsoft Power BI and carry them into deeper analysis. These integrations aim to streamline how corporate finance teams prepare briefings and follow-up communications.

The update also includes a Finance plugin for Cowork. This tool helps teams identify blockers, investigate variances that require explanation, and draft commentary for review. It can also consolidate budget inputs and prepare forecast-review briefs that include supporting spreadsheets and presentation materials.

Expanding the partner ecosystem

Microsoft is broadening the reach of Copilot by connecting it to a wide array of third-party integrations. For accounting and financial management, the AI now connects with popular platforms like Intuit QuickBooks, Xero, and Zoho Books. This allows for a more seamless flow of information between different software providers.

The ecosystem also includes connections for risk intelligence and investment analysis. These include integrations with companies such as CB Insights, D&B Finance Analytics, FactSet, and Morningstar. Additionally, the AI can now connect to market data and news sources like S&P Global, Statista, and Zacks.

For spend management and business banking, Copilot now connects to Mercury. These various connections are intended to provide a more comprehensive view of a company's financial health. As Accounting Today reported, these features are designed to help professionals manage complex data across multiple platforms more efficiently.

Expanded operational capabilities

Beyond core accounting, the update introduces a suite of diverse capabilities to handle complex corporate tasks. These include managing stakeholder Q&A, creating quarterly workbacks, and organizing audit evidence packages. The AI can also perform expense itemization and conduct deep dataset analysis to provide a more comprehensive view of financial operations.

These tools are designed to assist teams in managing the logistical side of finance. By automating the preparation of evidence and the organization of workbacks, the platform aims to reduce the manual labor required for recurring corporate reporting and internal oversight.

Early adoption and partner growth

Microsoft highlighted a growing ecosystem of partners, noting that Copilot now features numerous third-party integrations. During a limited Insiders availability period, more than 8,000 unique users invoked accounting skills over 44,000 times across more than 18,000 Copilot conversations. However, it remains unknown what portion of these conversations involved professional accountants at CPA firms.

The company is continuing to expand these connections to include various specialized services. This growth in the partner network suggests a strategy to make the AI more useful across different industries by connecting it to the specific software and data sources that different types of finance professionals use daily.