Managing Copilot: Billing, Monitoring & Prompts
The day-to-day admin work — assigning licenses, monitoring usage, managing billing, and governing how people use prompts. This is what Maya does every week.
Maya’s admin checklist
Think of Maya as the manager of a gym membership programme.
She needs to: give members their access cards (assign licenses), track who’s actually using the gym (monitor adoption), make sure the monthly bill makes sense (manage billing), and set rules about what equipment is available (govern prompts and features).
If she gives everyone a card but nobody shows up, she’s wasting money. If someone runs up a huge bill on the premium equipment, she needs alerts. And if people are using the equipment unsafely, she needs policies.
That’s Copilot admin in a nutshell.
1. Assigning Copilot licenses
Two methods — the exam tests both:
Individual assignment (small scale or pilot)
- M365 admin center → Users → Active users
- Select the user → Licenses and apps
- Check Microsoft 365 Copilot → Save changes
Best for: Quick pilot access (e.g., “give the CEO Copilot today”), testing with a small group.
Group-based assignment (recommended for scale)
- M365 admin center → Groups → Active groups
- Select the group → Licenses
- Assign licenses → select Microsoft 365 Copilot → Save
Best for: Department rollouts. Everyone in the group gets Copilot automatically — new members inherit the license when added.
Exam tip: Individual vs group licensing
The exam often presents a scenario where an admin needs to “enable Copilot for the Marketing department.” The answer is almost always group-based licensing — not individual assignment. Individual assignment doesn’t scale and requires manual work for every new hire.
Watch for: Questions about removing access. With group-based licensing, you remove the user from the group — the license is automatically unassigned. With individual assignment, you must manually remove it.
2. Managing pay-as-you-go billing
Setting up pay-as-you-go is a two-step process:
| Step | Where | What You Do |
|---|---|---|
| Step 1: Create billing policy | M365 admin center → Copilot → Billing & usage → Billing policies | Name the policy, link to Azure subscription, set user scope, define budget + alerts |
| Step 2: Connect to Copilot service | Same page → Pay-as-you-go services tab | Select the Copilot service (e.g., Copilot Chat) and attach your billing policy |
Critical: Both steps are required. If you only create the policy but don’t connect it to a Copilot service, pay-as-you-go stays disabled for those users.
Budget alerts — set these or regret it
When creating a billing policy, always set budget alerts:
- 50% threshold → early warning
- 80% threshold → investigate usage patterns
- 100% threshold → take action (review, restrict, or convert heavy users to monthly)
Without alerts, a project team that suddenly hammers Copilot (during year-end reporting, for example) can triple your monthly costs. The alerts go to email recipients you specify — include yourself AND finance.
3. Monitoring usage and adoption
This is where Maya answers: “Are people actually using Copilot? Is it worth the cost?”
| Tool | What It Shows | Where to Find It |
|---|---|---|
| M365 admin center reports | Enabled vs active users, usage by app | Reports → Usage → Copilot |
| Copilot Analytics | Adoption trends, feature diffusion, user segments | M365 admin center → Copilot section |
| Viva Insights | Deeper adoption analysis, productivity impact | Viva Insights Copilot Dashboard |
| Azure Cost Management | Pay-as-you-go spend, cost trends, budget status | Azure portal → Cost Management |
The key metric: enabled vs active
- Enabled users = people who have a Copilot license assigned
- Active users = people who actually used Copilot in the reporting period
If you have 200 enabled but only 50 active, you’re paying for 150 unused licenses. Maya’s job is to close that gap — either by driving adoption or reallocating licenses.
Scenario: Northwave's monthly Copilot review
Maya runs her monthly check:
- M365 admin center → Reports → Copilot — 200 enabled, 142 active (71% adoption)
- Breakdown by app: Teams 89%, Outlook 76%, Word 45%, Excel 22%
- Action: Excel adoption is low → schedule training for finance team
- Azure Cost Management — pay-as-you-go engineers used $1,200 (within $1,500 budget)
- Action: 3 engineers used it heavily → consider switching them to monthly licenses (cheaper)
This monthly review cycle is exactly what the exam expects admins to do.
4. Managing prompts
Prompts are how users interact with Copilot. As an admin, you need to govern how prompts are saved, shared, and reused.
| Action | What It Means | Where |
|---|---|---|
| Save | Users save effective prompts for reuse in their Prompt Library | In-app (personal) |
| Share | Share prompts with colleagues or M365 Groups | Via Microsoft 365 Groups |
| Schedule | Set prompts to run automatically (Copilot Scheduler) | Copilot Scheduler |
| Delete | Remove prompts from the library | Prompt Library |
| Govern | Admin controls who can share, what’s auditable | Prompt Policies in admin center |
Why prompt governance matters
Without governance, users might:
- Share prompts containing sensitive instructions — “Summarise all salary data for the exec team”
- Create misleading organisational prompts — prompts that look official but produce unreliable output
- Bypass compliance — prompts that extract data in ways that violate DLP policies
Admin controls:
- Prompt Policies — control who can share prompts and at what scope
- Audit logs — track prompt creation, sharing, and usage in Reports → Copilot Usage
- Naming standards — encourage descriptive names so prompts are discoverable and trustworthy
Exam tip: The exam tests whether you know that prompt sharing and scheduling are admin-configurable — they’re not just user features.
Operational best practices
The exam also tests general admin best practices:
- RBAC / least privilege — don’t make everyone a Global Admin. Use specific roles:
- License Administrator — assigns licenses
- Billing Administrator — manages billing policies
- Compliance Administrator — manages prompt policies and audit
- Group-based licensing for onboarding — new hires automatically get Copilot when added to their department group
- Service health monitoring — check M365 admin center → Service health for Copilot issues
- Communication plans — tell users WHAT Copilot can do, train them on good prompts, set expectations
🎬 Video walkthrough
Flashcards
Knowledge Check
Maya set up a pay-as-you-go billing policy and linked it to an Azure subscription. But users still can't access Copilot. What did she miss?
Northwave has 200 Copilot licenses. Maya's report shows 200 enabled users but only 80 active users. What should she do FIRST?
Next up: Building Agents — hands-on: how to create Copilot Chat agents and SharePoint agents, step by step.