If you’ve spent any time in finance or operations, you know that Accounts Payable (AP) is one of those functions that’s essential, but often messy. Manual invoice processing, endless follow-ups, late payments — sound familiar? For many teams, especially those using Microsoft Dynamics 365 Finance and Sales modules, it’s an area that still eats up time and energy every single month.
But there’s good news: AP automation has come a long way. And when it’s properly integrated with D365 Finance, it can completely transform how your team handles payments, approvals, and reporting.
Let’s unpack how it works — and more importantly, why it matters.
Why Manual AP Is Still Holding You Back
Before we talk about automation, it’s worth looking at what many companies are still dealing with today. The classic AP setup is often built on:
- Invoices that show up in different formats — email, PDF, even paper
- Manual data entry into Dynamics 365
- Long email chains for approvals
- And worst of all, surprise invoices that weren’t in the budget
It’s not that your team isn’t working hard. It’s that the system itself is clunky. You’re relying on people to push paper (or digital paper), chase approvals, and spot errors, which is a recipe for slow processing, strained vendor relationships, and missed early-payment discounts.
The problem isn’t your team — it’s the workflow.
How AP Automation Changes the Game
When we talk about AP automation, we’re not just talking about scanning invoices and uploading them to the dynamic business center. We’re talking about a full end-to-end process that:
- Captures invoice data automatically (no typing required)
- Matches it to purchase orders or receipts
- Route it for approval based on your own business rules
- Post it directly into your ledger for payment
The result? Less admin work, faster approvals, better visibility, and more accurate financial reporting.
And because D365 Finance is already the core system for many mid-sized and enterprise businesses, integrating AP automation into it doesn’t mean adding more complexity. It means making your existing tools smarter.
Real Improvements You’ll See with AP Automation in D365 Finance
Here’s where it gets interesting. When you plug AP automation into Dynamics 365, you start to see tangible improvements pretty quickly. We’ve broken them down below.
1. You’ll Stop Manually Entering Invoice Data (Finally)
Data entry is boring. It’s also where a lot of mistakes happen, especially when you’re dealing with hundreds or thousands of invoices a month.
With automation tools, invoice data gets pulled in automatically. Whether it’s emailed as a PDF or entered through a vendor portal, the system extracts the key details (vendor name, PO number, amounts, line items) and syncs it straight into D365 Finance.
No more re-keying. No more copy-paste errors. Just accurate data flowing where it needs to go.
2. You’ll Match Invoices to POs Without the Headaches
One of the more tedious parts of AP is the 3-way match: making sure the invoice lines up with the purchase order and the goods receipt. Manually, this takes time — and usually involves chasing down buyers or warehouse staff for clarification.
With automation, this happens behind the scenes. The system checks invoice details against what’s already in D365 Finance and flags anything that doesn’t match. That means you can resolve discrepancies early, instead of after a payment goes out.
3. You’ll Get Faster, More Reliable Approvals
Approvals are a huge bottleneck in most AP processes. You’ve got department heads who are busy, unclear approval chains, and invoices stuck in inboxes.
Automation takes the guesswork out. Invoices are routed based on predefined rules: amount thresholds, departments, vendor types — whatever makes sense for your business. Approvers get automated reminders, and you can track where everything is in real time inside D365 Finance.
What used to take days or weeks can often be done in a few clicks.
4. You’ll Pay Vendors on Time — and Maybe Even Early
This might not sound exciting, but timely payments matter. Vendors are more likely to prioritize your orders, waive fees, or even offer early payment discounts if they know your payment process is reliable.
With automation, payments are scheduled and tracked within D365 Finance. You’re not scrambling at month-end, and you don’t have to guess which invoices are still waiting on approvals.
The bottom line: your vendors are happier, and your finance team isn’t stuck firefighting.
5. You’ll Trust Your Financial Reports
This one’s huge, especially for finance leaders. When your invoice data is reliable, approvals are timely, and posting is accurate, your financial reports start to reflect reality.
That means better visibility into cash flow, clearer forecasting, and fewer surprises at month- or year-end. And because everything is housed within D365 Finance, your reporting doesn’t depend on spreadsheets or patchwork tools.
As businesses grow, their AP processes become more complex. Manual systems can’t keep up with higher volumes of invoices, global vendors, or multi-currency payments. AP automation scales effortlessly, enabling businesses to expand without being bottlenecked by back-office inefficiencies.
Since D365 finance is designed to handle multi-entity and multinational operations, its integration with AP automation tools ensures consistent performance across geographies and business units.
Integrating AP Automation with Dynamics 365: How It Works
Integrating AP automation with Dynamics 365 Business Central or any other module of it is not just about syncing tools—it’s about building a cohesive digital finance ecosystem. Here’s how a typical integration works:
- Invoice Receipt: Invoices arrive via email, portal uploads, or EDI systems. AP automation tools automatically ingest these invoices into the system.
- Data Capture: OCR and AI extract invoice data, validate it against existing data in D365 Finance (e.g., vendor info, PO numbers), and flag anomalies.
- Matching: Invoices are automatically matched to POs, GRNs, and contracts based on rules set within the D365 finance module.
- Approval Workflow: The invoice is routed through pre-defined approval workflows using Dynamics 365’s native tools.
- Posting and Payment: Once approved, the invoice is posted directly to the ledger in D365, and payment is scheduled or triggered via connected banking systems.
- Audit Trail and Reporting: Every action is logged, and data flows into financial dashboards for performance tracking and compliance reporting.
Challenges and Considerations
While the benefits are clear, it’s important to approach AP automation integration thoughtfully. Here are a few considerations:
- Data Cleansing: Ensure vendor master data and PO information in D365 Finance are accurate and up to date.
- Change Management: Train finance staff on the new workflows and encourage adoption across departments.
- Customization vs. Configuration: Balance out-of-the-box functionality with any custom requirements specific to your business model.
- Vendor Selection: Choose an AP automation solution that offers certified integration with Dynamics 365 and has a strong track record of implementation success.
The Role of AI and Machine Learning
Modern AP automation tools go beyond simple rule-based workflows. With AI and machine learning capabilities, these tools can learn from historical data to:
- Predict approval routing paths
- Detect fraud and anomalies
- Recommend payment prioritizations
- Auto-categorize expenses based on context
When integrated with D365 finance, these features add another layer of intelligence, helping businesses evolve from reactive financial management to proactive decision-making.
Conclusion
Accounts Payable automation, when integrated with Dynamics 365 Sales and Finance modules, is a catalyst for operational excellence. It eliminates inefficiencies, reduces costs, improves accuracy, and strengthens compliance—all while freeing up teams to focus on strategic initiatives.
In a digital-first world, businesses cannot afford to rely on outdated manual processes. AP automation is no longer a luxury—it’s a necessity. And with a powerful platform like D365 Finance at the core, organizations can unlock a new level of agility, scalability, and performance.
Every Microsoft Dynamics CRM Consultant works on integrating AP automation as soon as possible, as it is the best logical next step in your digital transformation journey.
Ready to streamline your financial operations? AP automation within D365 Finance is your path forward.
