Model Context Protocol for Dynamics 365 Finance and Operations and Copilot Studio: A complete guide

An overview of Dynamics 365 ERP MCP tools: What’s available?

The Dynamics 365 ERP MCP server includes a static list of predefined tools. Each tool is backed by a custom Dataverse API, which defines its schema and performs the operation. You can find these APIs in the corresponding Dataverse solutions:

• • Copilot in Microsoft Dynamics 365 Finance

• • Copilot in Microsoft Dynamics 365 Supply Chain Management

  Each tool includes:

• • A description of its purpose

• • A schema definition via the Dataverse custom API

• • A list of input parameters

• • A set of expected outputs

  Here are some tools:

1. Find approved vendors

• • Name: findapprovedvendors

• • Purpose: Retrieves vendors approved to supply specific items

• • Input Parameters:
    • • ItemNumber (String, Optional) — The item ID to filter approved vendors
    • • vendorAccountNumber (String, Optional) — If provided, limits the result to this vendor

• • Use Case: Used by procurement agents to validate sourcing.

• • Output:
    • • Itemnumber (String) — The item number.
    • • approvedvendoraccountnumber (String) — The vendor account number of the approved vendor for the item.
    • • validfrom (datetime) — The date and time from which the approval is valid.
    • • validto (datetime) — The date and time from which the approval is valid.

• • Custom API: msdyn_FindApprovedVendors

2. Create a transfer order for a single item

• • Name: createtransferorderforsingleitem

• • Purpose: Creates a transfer order for a specified item.

• • Input Parameters:
    • • ItemNumber (String, Required) — The item code to transfer.
    • • fromWarehouseId (String, Required) — Warehouse ID from where the item will be shipped.
    • • toWarehouseId (String, Required) — Warehouse ID to which the item will be sent.
    • • quantity (int, Required) — The number of items to transfer.

• • Use Case: Used in inventory management agents to automate internal stock movements.

• • Output:
    • • result (String) — A message indicating the result of the transfer operation.

• • Custom API: msdyn_CreateTransferOrderForSingleItem

3. Match the invoice

• • Name: matchinvoice

• • Purpose: Matches vendor invoice with product receipt.

• • Input Parameters:
    • • invoiceId (String, Required) — Vendor invoice number to be matched.

• • Use Case: Ensures invoicing and receipt records align.

• • Output:
    • • fullyMatched(Boolean) —Whether the invoice has been fully matched

• • Custom API: msdyn_VendInvoiceMatchProductReceiptCustomAPI

Conclusion

Successfully integrating the Model Context Protocol (MCP) with Microsoft Dynamics Finance and Operations empowers businesses to create intelligent agents that are scalable, secure, and deeply embedded into their operational processes. At Confiz, we’ve seen that a well-planned MCP implementation, paired with strong technical expertise and cross-functional alignment, can enhance automation, streamline data access, and support faster and smarter decision-making across the enterprise. Considering MCP for your AI integration strategy? We’ll help you evaluate compatibility, identify gaps, and plan a seamless rollout. For tailored guidance or to explore your integration needs, connect with us at marketing@confiz.com.