You already pay for Copilot licences, but nobody can say who used them last month. Usage-based services add another question: who can consume Copilot Credits, and where does that consumption stop? By the end, you will know which two reports to open and which limits need an owner.
The new charge can arrive beside the licence
A per-user licence and usage-based billing answer different questions. A licence grants access. Copilot Credits meter eligible services as people use them. Microsoft describes Copilot Credits as a shared usage currency that can sit beside fixed licences, with prepaid capacity, pay-as-you-go or a combination of methods (Microsoft usage-based billing overview, checked: 2026-10-05).
This distinction matters because some eligible services require both a Copilot licence and credits. Microsoft's current list includes Cowork, advanced work in SharePoint, advanced work in OneDrive, Work IQ API, Copilot Managed Runtime and Teams Phone Agent. Other products, including Copilot Studio, have their own billing administration, so one screen does not describe every Copilot-related charge (Microsoft usage-based billing overview, checked: 2026-10-05).
The immediate date needs careful reading. Microsoft says new Microsoft 365 Copilot Business purchases through a CSP will get usage-based billing enabled by default from 1 December 2026 in supported markets. The default per-user ceiling is 4,000 Copilot Credits per month, which an administrator can change (Partner Center announcement, checked: 2026-10-05).
Poland and the Netherlands are among the markets initially excluded from that change. Microsoft also lists Australia, Belgium, Brazil, France, Germany, India, Italy, Korea and Spain as unavailable at first, with further information promised later. A company in Poland or the Netherlands should prepare, but it should not assume the switch happens on 1 December (Partner Center announcement, checked: 2026-10-05).
Two controls solve two different problems
The licence report shows whether licensed people are active. Cost management shows how many credits a policy allows and consumes. Treating one as a substitute for the other leaves a blind spot.
The Microsoft Copilot usage report is under Reports, Usage, Microsoft Copilot, Copilot. It shows enabled users, active users and each licensed user's last activity date across periods of 7, 28, 90 or 180 days. The report can be exported to CSV, and activity data usually appears within 48 hours (Microsoft Copilot usage report, checked: 2026-10-05).
Names are hidden by default in usage reports, so the person reviewing licences may need the tenant's reporting privacy setting changed by an authorised administrator. Opening Copilot alone does not count as activity. Microsoft records a user as active after a prompt is sent (Microsoft Copilot usage report, checked: 2026-10-05).
Cost management sits under Copilot in the Microsoft 365 admin center. Its Overview, Configuration and Consumption areas cover spending policies, organisation and user limits, alerts, billing methods, credit requests and consumption. This is the place to connect a technical ceiling with a named reviewer in your Microsoft 365 licence and security review.
Set the controls before consumption becomes routine
Export ninety days of licence activity
Start with the 90-day view in the Copilot usage report. Export the CSV and separate licensed people into active, inactive and unclear. Do not cancel anything from the spreadsheet alone. An absent person, a new starter or a role that uses Copilot seasonally needs context.
Record who will review this list and when. A quarterly review is more useful than a dashboard nobody owns. If Microsoft changes a date or product name, the same owner should also follow the process described in who reads the change notices.
Microsoft now calls Microsoft 365 Copilot "Microsoft Copilot" and Microsoft 365 Copilot Chat "Microsoft Copilot Chat," although licence names may retain the older wording during the transition (Microsoft enterprise data protection, checked: 2026-10-05). Keep the name from the invoice in your register so finance and administration discuss the same item.
Find the active spending policy
Open Copilot, then Cost management, and inspect Configuration. Microsoft's documented first-run path is Get Started, followed by activation of a default spending policy. A Global Administrator or Billing Administrator must perform that initial setup (Copilot Credits setup, checked: 2026-10-05).
Write down the billing method, organisation limit, user limit and alert recipients. If Cost management is absent, do not infer why from a screenshot. Ask the CSP or administrator whether the feature is available for this market and subscription.
Choose hard limits and useful alerts
The setup offers "Don't limit monthly spending" or "Limit monthly spending." Microsoft recommends a per-user limit to prevent one person from consuming credits without a ceiling. When a policy reaches its limit, affected services stop for the rest of that month, and credits renew on the first day of the next month (Copilot Credits management, checked: 2026-10-05).
That makes a limit a hard operational decision, not just a warning. Pick it with the service owner. Send alerts to the person who can investigate usage and to a second person who can see the financial effect. The default figure supplied with a CSP change is a technical default, not a recommendation for your firm.
Decide how new services enter the policy
The "Auto-apply new services" setting is enabled by default. New Microsoft agents and services that support usage-based billing can therefore join the policy automatically. If you switch it off, an administrator must review and add each new service manually (Copilot Credits management, checked: 2026-10-05).
Neither option is universally correct. Automatic inclusion reduces administration but broadens the policy without a separate approval. Manual inclusion creates a review point but can delay a service someone expects to use. Record the decision and its owner instead of leaving the default unexplained.
Separate visibility from authority
Global and Billing Administrators can change billing methods. AI Administrators and Licence Administrators can edit policies, limits and alerts but cannot create policies. Reader roles can view consumption without changing it (Copilot Credits setup, checked: 2026-10-05).
Finance often needs visibility, not the ability to change a policy. Give the narrowest role that supports the job, then document who may approve a higher limit. Credit requests should reach a person who understands why the service is needed, not an unattended shared mailbox.
What not to do
Do not leave unlimited monthly spending in place because usage is currently low. Low use today does not explain what a newly added service can do next month.
Do not treat 4,000 credits as a safe, generous or small limit. Microsoft chose it as a default for the CSP change. Your useful limit depends on the work you have approved.
Do not use audit logs as the licence activity report. Microsoft states that the Copilot usage report, rather than the audit log, is the reporting source for this purpose (Microsoft Copilot usage report, checked: 2026-10-05).
If your business is in Poland or the Netherlands, do not assume default billing starts on 1 December 2026. Those markets are initially excluded. Microsoft says it will share more information as availability expands.
When you can handle this yourself
You can do the first review internally when one administrator can export the usage report, identify the subscription owner and read the active spending policy. The output should be short: unused licences to investigate, current limits, alert recipients, the Auto-apply decision and the next review date.
Bring in help when several policies overlap, different groups need different limits, or nobody can explain the Azure subscription behind pay-as-you-go. The same applies when credits are allocated across Microsoft 365 and Copilot Studio. At that point, the work is billing architecture and role design, not a quick settings check.
The useful result is a named person who can say who has a licence, who used credits, which limit stopped them and who may change that limit.