Invoice capture for Microsoft Dynamics 365 Business Central

invoice capture in microsoft d365 business central: concise overview and measurable benefits

Invoice capture in Microsoft D365 Business Central extracts vendor details, invoice number, date, line items and totals automatically from PDF and image files. The feature uses OCR and AI/ML to read different invoice formats and to learn layouts over time. As a result, teams reduce manual entry and errors quickly, and approvals move faster. Industry benchmarks show that organisations using AI-driven invoice capture report up to a 70% reduction in invoice processing time and up to a 60% drop in cost-per-invoice according to independent reviews. These figures emphasise why finance leaders prioritise automation and accuracy.

Technically, the process combines optical character recognition with machine learning for field matching and confidence scoring. Then, robotic steps handle routine posting and simple approvals to streamline the flow. The invoice capture feature in Business Central can also read different invoice formats from different vendors and tag exceptions for human review. For finance teams that need audit trails and digital retention, capture provides traceable records and posting history. Microsoft states that the tool uses “AI, ML, OCR, and RPA to make the process of handling invoices faster and more accurate” (ERP Software Blog), and that improves compliance and readiness for audits.

Quickly put, the measurable benefits include faster approvals, better supplier relationships, and lower processing costs. You also get fewer data entry errors and more predictable cash flows. Organisations see a 30–50% decrease in manual data entry errors when they capture invoice data with AI and OCR (ERP Software Blog). If you want to move from paper to digital, the base Business Central capture capability starts work fast, and teams can get started in minutes with invoice tools and minutes with invoice data capture during a pilot.

microsoft dynamics and dynamics 365 finance: how invoice capture links to accounts payable

Invoice capture connects tightly to accounts payable records and posting logic inside Dynamics 365 and dynamics 365 finance modules. Incoming files are routed to the Incoming Documents page, where OCR extracts key fields and then maps them to vendor cards, posting profiles and the invoice journal. The system integrates with vendor master data so that vendor invoices match automatically when vendor IDs, tax numbers or purchase order references align. For non-PO lines, recent updates extended non-po invoices handling directly in the invoice journal, reducing manual intervention and keeping AP teams focused on exceptions. See the release notes on new capabilities in release wave 2 for confirmation (Cegeka).

Because capture integrates with approvals and postings, your audit trail becomes both visible and verifiable. The posting history records who approved a document, when approval occurred, and which ledger entries resulted. That means compliance checks and financial reporting work from the same source of truth. KPIs to watch include processing time, approval cycle length and exceptions rate. Track the straight-through processing rate and the percentage of invoices that never require manual entry. Measuring these KPIs shows where to tune vendor mappings, approval workflows and vendor onboarding.

For teams using broader automation, the capture flow also links to the Power Platform and to Copilot-style insights, so finance leaders can build dashboards and trigger downstream actions. If your organisation needs to streamline digital correspondence around invoices and vendor questions, our virtualworkforce.ai agents can draft context-rich replies and check ERP status in real time, which reduces time spent on routine vendor emails (ERP email automation for logistics). This keeps AP focused on approvals, cash optimisation and supplier relationships.

invoice automation and accounts payable automation: processing vendor invoices and modernising ap workflows

Invoice automation modernises how AP teams process vendor invoices end to end. The typical workflow runs capture → auto-map → verify/approve → post. Exceptions route to reviewers with confidence scores and annotated images. For PO-backed invoices, the system matches line items and totals against purchase order data. For non-PO invoices, the system posts through the invoice journal or routes for coding, depending on rules. This mix of automation and human checks raises the straight-through processing rate and lowers exceptions per 100 invoices.

Measure what matters. Track STP percentage, exceptions rate, cost per invoice, and days payable outstanding. Industry studies show invoice automation reduces processing time by up to 70% and can shrink cost-per-invoice by as much as 60% to 80% in some cases (Rho). These gains come from fewer clicks, less manual entry and faster approvals. Teams that free up AP staff can focus on supplier negotiation, early-payment discounts and cash flow forecasting. They also improve vendor relationships through faster payment and clearer dispute resolution.

Choose rules that reflect your business requirements. Start with high-volume vendors, and then expand. Use vendor cross-references and posting groups to reduce manual coding. Where invoices include many line items, configure the system to read line items and to propose GL codes, then let approvers confirm. If you need help managing email threads and vendor requests as invoices move through the workflow, virtualworkforce.ai drafts replies, cites ERP context and can even log activity back to systems (automated logistics correspondence). That reduces the human time spent on status checks and increases throughput.

invoice capture solution: ocr, ai and machine learning to capture in dynamics 365 finance and improve accuracy

An effective invoice capture solution blends optical character recognition with AI models that learn invoice templates and suggest coding. OCR converts images to text, then ML maps fields such as vendor name, tax ID, invoice number, invoice date and totals. The system assigns a confidence score. Low-confidence fields go to humans for review. Over time the ML model refines mappings and raises the automatic coding rate.

Microsoft provides built-in capabilities in dynamics 365 finance, and partners add specialised options for complex requirements. For instance, Continia and Fidesic appear in AppSource and provide deeper AP workflow features and vendor onboarding tools. If your invoices include many line items or complex tax rules, you might choose a partner app to reduce setup work. The 2023 release wave extended these capabilities in dynamics 365 finance and operations and broadened support for non-po invoices (Cegeka).

Expect accuracy to start lower on poor-quality scans and then rise as the system sees more samples and as vendor mappings improve. Use cross-references and vendor mappings to speed automatic coding. Also, use the AI Builder or other Azure services when you need custom extraction rules, and integrate the model into your workflow by using Power Platform connectors. If you want to compare capture tools, remember to test with a representative sample of your document set, because different invoice formats and image quality produce very different results.

Finally, the capture tool you pick should match your governance needs. Apply role-based access controls, audit logs and retention policies for legal entities and financial reporting. For teams that want rapid deployment, some providers advertise that you can get started in minutes with invoice data capture, but plan a pilot so you can measure STP and exceptions before you scale.

configure and using microsoft features to automate invoice capture: setup, mapping, approvals and governance

Configure capture by choosing an OCR tool, enabling Incoming Documents, setting vendor cross-references, and defining posting groups. Then set approval flows in the invoice journal and test. Start with a pilot on high-volume vendors. Measure straight-through processing and exceptions for four to six weeks. Refine your mappings and approval rules based on results.

Best practice suggests mapping common invoice formats from different vendors first. That increases early STP and trains ML faster. Define exception rules so that small differences do not create false positives. Apply segregation of duties and approval limits for financial controls. Retention policies, user roles and audit logs help with compliance and financial reporting. When you run a pilot, include a mix of PO and non-PO invoices. Include purchase order matching as part of the test for PO-backed invoices.

Use platform features to extend capture. For example, integrate with SharePoint or OneDrive for document storage, or use Power Apps and Power Platform flows to automate notifications. You can also leverage Copilot-style insights from microsoft to ask natural language questions about workflow status. If you need email drafting or rapid replies during approvals, virtualworkforce.ai can draft and send context-aware emails that cite ERP context and track synchronization back to the ledger (how to scale operations with AI agents). That reduces manual entry and repeated status checks.

Finally, involve IT for security updates and technical support. Use Azure services for scale, and test backup and retention across legal entities. Document your business requirements, and schedule regular reviews of STP, cost per invoice and exceptions so you can continuously improve the invoice processing workflow.

fidesic, invoice capture in dynamics 365 and third-party options: choose the right solution for accounts payable processes

Choosing between built-in capture and third-party apps depends on your complexity, timeline and budget. Native capture in base Business Central covers many standard scenarios and integrates with the invoice journal and vendor cards. For heavier requirements, partner solutions like Fidesic add advanced supplier portals, payment automation and deeper exception handling. Search AppSource for specialised modules or consult partners who build on microsoft dynamics 365 business central if you need advanced workflows.

Consider these comparison points: configurability, support for complex line items, speed of deployment, reporting, and total cost of ownership. If you need to process invoices with many line items, or if you must support multiple legal entities and bespoke posting rules, a partner solution might reduce customisation effort. Third-party capture tools often include prebuilt connectors to popular ERPs such as dynamics gp and to financial operations modules. They can also support invoice formats from different vendors and automated vendor onboarding.

When you evaluate providers, run a pilot that mirrors real volume and document quality. Include a test set that covers scanned paper, email PDF attachments and electronic invoices. Check whether the vendor supports synchronization with your vendor master data and whether it can manage vendors and posting rules across multiple companies. Also, verify security updates, technical support, and the ability to customize extraction for unusual layouts. If you want to reduce time spent on vendor emails during roll-out, consider adding email automation so AP staff get fewer status questions and more time for exception handling (virtual assistant for logistics).

Finally, choose the solution that supports your long-term goals. If you aim to streamline accounts payable processes and to scale without hiring, pick a tool that matches your required STP rate, supports your purchase order and non-po use cases, and offers clear reporting for financial reporting and audit trails. AppSource listings and partner demos help you compare options quickly, and a staged pilot helps you prove ROI before enterprise rollout.

FAQ

What exactly does invoice capture do in Business Central?

Invoice capture extracts key invoice fields automatically and maps them to records inside Business Central. It reduces manual entry by using OCR and ML so AP teams can focus on exceptions.

Can invoice capture handle both PO and non-PO invoices?

Yes. Dynamics 365 updates increased support for non-po invoices, and you can process those directly in the invoice journal. PO matching remains available for standard purchase order workflows.

How much time can businesses expect to save?

Industry studies report as much as a 70% reduction in invoice processing time when companies adopt AI-driven capture (Rho). Actual results depend on document quality and vendor mix.

Does invoice capture require third-party software?

Not always. Base Business Central offers built-in capture features, but partners like Fidesic or specialised apps on AppSource may add advanced workflow and reporting. Choose based on complexity and volume.

How does OCR fit into the solution?

Optical character recognition converts scanned images into text that ML models then map to fields. OCR quality affects initial accuracy and the volume of human intervention needed.

What KPIs should we monitor after implementation?

Track average invoice processing time, cost per invoice, exceptions rate and STP percentage. These metrics show how much automation reduces manual entry and speeds approvals.

How should we pilot invoice capture?

Start with 100–500 representative invoices across vendors and formats. Configure mappings, run the capture tool, measure KPIs for 4–6 weeks, then iterate before wider rollout.

Can invoice capture integrate with other Microsoft tools?

Yes. You can integrate capture with Power Platform, SharePoint, OneDrive and Copilot features. You can also use Azure for custom models and the AI Builder for tailored extraction.

Will capture replace AP staff?

No. Capture reduces manual entry and repetitive work, freeing AP staff for higher-value tasks like supplier management and cash optimisation. Human intervention remains for exceptions and approvals.

How does virtualworkforce.ai help with AP efficiency?

virtualworkforce.ai drafts context-aware emails and automates replies during approval cycles, which cuts time spent on vendor correspondence and reduces errors. That keeps AP teams focused on approvals and exceptions while ensuring timely communication.