Dynamics AP Automation in '25: 5 Solutions & Features Analyzed

Microsoft Dynamics finance is an ERP vendor with a finance automation solution including capabilities in accounts payable, accounts receivable, financial reporting and more.

Though Dynamics provides a broad range of AP automation capabilities, these capabilities can be improved with add-ons such as PairSoft that can increase AP automation levels and ease of use.

Explore Dynamics’ key features, insights from case studies and reviews, and how to utilize native ERP integrations to improve accounts payable process automation.

*Apart from our sponsors, table is sorted in alphabetical order

Overview of Microsoft Dynamics

Accounts payable automation is crucial for the continuity of financial processes. Deploying AP automation constitutes 41% of the incoming agenda of businesses. 71% of AP leaders see it as one of the most important factors affecting AP performance.¹

Dynamics GP

Dynamics GP is a business management solution for small to mid-sized organizations. Its focus is mainly on financial management and automation. It offers capabilities in AP automation such as:

• invoice processing
• payment scheduling
• vendor management.

Dynamics 365

Dynamics 365 is one of the key players in the ERP market. It has contributed $5.4 billion to Microsoft’s revenue as of 2023, growing faster than most other product categories.²

Features & key capabilities in AP automation

Dynamics 365 Finance improves accounts payable processes by accommodating invoice capture in various formats, both digital and manual. As with some of the other AP automation software, its main focus is invoice processing & automation. Features such as coding, and error resolution are also included in their catalog. Some of the key capabilities regarding Dynamics AP automation are:

Invoice automation

Figure 1: Microsoft Invoice Capture Process. Source³

Invoice capture process includes:

• Invoice sent by the supplier (PDF, PNF, JPG etc.)
• Power Automate monitors e-mails and downloads attached files
• A model built through AI Builder is used to extract relevant info from the invoices
• From Invoice documents, relevant info is retrieved
• Through RPA, invoice info automatically enters into Dynamics 365
• Finally, invoice is matched and posted in Dynamics 365

In the cases where Azure AI & integrated platform environments are not involved, Dynamics 365 offers embedded invoice capture solutions with OCR like APAI solutions. For the options available in the current version of Dynamics 365 finance, see Figure 2:

Figure 2: Options available in Dynamics 365 finance for invoice capturing. Source⁴

Vendor management

Dynamics’ system allows for management of vendor information such as payment terms, agreements, and historical data. Users can also benefit from features such as creating vendor groups (Figure 3).

 Figure 3: A sample action of creating a vendor group through Dynamics 365 finance. Source:⁵

Three-way matching

Dynamics supports a three-way match system. Purchase orders (POs), receipts, and incoming invoices are basic components of the process.

Example:

John, the finance manager at Faltren Manufacturing, implements three-way matching in Dynamics 365 for equipment purchases. This process matches vendor invoices with both purchase orders and product receipts to prevent overpayments and track discrepancies.

Prerequisites:

• John sets the matching policy to three-way matching in Dynamics 365.
• Automatically update header matching status is set to Yes.
• Match price totals is set to amount with a 10% tolerance.
• Item 2300 – Hydraulic Press is set for three-way matching.

Scenario:

David requests 2 Hydraulic Press machines. Lisa creates a purchase order with Northwind Traders.

Mark receives the machines and updates the product receipt for 2. Sarah in accounts payable checks the invoice:

Sarah verifies the invoice matches both the order and receipt within tolerances, and the invoice is posted:

Payment automation

Dynamics 365 finance automates payment processing by scheduling payments, electronic fund transfers (Figure 4). It also allows the management of multiple payment methods and currencies.

Figure 4: An example of scheduling payment processes through Dynamics 365 finance. Source:⁶

Workflow automation

Key features of Dynamics 365 Finance regarding the ability to view workflow history and analyze the process include:

• Automatically routing imported invoices through workflows
• The touchless processing rate
• Detecting days required to process an invoice
• Showing approvals per assigned approver

Dynamics mostly offer customizable workflow capabilities. This way, invoice data and payments go through the proper approval processes.

Expense management

The module includes tools for managing and reimbursing employee expenses. It optimizes the expense management cycle, from submission to reimbursement, controlling costs in line with compliance with financial policies and regulations.

Employees can also submit expense reports directly through the Dynamics 365 platform. They can upload receipts, classify expenses, and provide additional information such as project codes or client names.

Dynamics offer mobile-app as well. The app allows you to capture receipts, submit reports, and track reimbursement status from smartphones or tablets.

Financial insights

Dynamics 365 Finance provides real-time insights and analytics on financial data. Businesses can track their & vendor actions through business central. (See Figure 5)

Figure 5: Dynamics 365 Business Central⁷

For overall services provided by Dynamics 365 finance, see:

Figure 6. Microsoft Dynamics 365 Finance overall features⁸

Native integrations to improve Dynamics’ AP capabilities

Sponsored: PairSoft with its native Dynamics integration can increase automation levels in different Dynamics ERP solutions such as Dynamics SL, GP, NAV and Dynamics 365:

• Dynamics SL: Optimized for project-based businesses, offering strong project and financial management tools.
• Dynamics GP: For small to mid-sized businesses, providing broad financial and HR management capabilities.
• Dynamics NAV: Currently Dynamics 365 Business Central, targets small to mid-sized businesses as well, but with a focus on adaptability to support various industries with business management features.

PairSoft, with products like PaperSave can enhance AP automation and document management in Dynamics family of products by:

• capturing documents in numerous different ways (e.g. ScanLater allows matching multiple physical documents to existing transactions, Outlook integration enables capturing invoices in emails)
• establishing connection through APIs that will allow you to build a workflow between different SaaS applications
• tracking changes on documents
• exporting query specific document data to excel
• scanning invoices with mobile phones thanks to OCR
• enabling structured & unstructured searches

Additionally, PairSoft can connect other ERP systems with the help of a universal ERP connector.

Explore PairSoft’s AP automation capabilities in Dynamics 365 or Dynamics GP and other Dynamics solutions.

Pros of Dynamics 365

Integration with other modules: Dynamics 365 is integrated with other modules and third-party applications. As pointed out in customer stories, this can improve the overall functionality and data coherence.

Figure 7: Integration capabilities of Dynamics 365⁹

Apart from its comprehensive tools, users also liked the features below.

 Figure 8: Dynamics 365 Business Central pros.Source: ¹⁰

Cons of Dynamics 365

Manual process in POs: Users stated that some processes still include manual tasks such as PO data entry and removing completed POs. Other than this, the most complained features of Dynamics 365 are given below:

Figure 9: Dynamics Business Central cons. Source:¹¹

Dynamics 365 pricing structure

Although Dynamics 365 offers different payment plans in some processes, the overall payment plan is as follows:

Figure 10: Microsoft Dynamics 365 Finance. Source:¹²

The AP automation process can sometimes result in the use of other services in Microsoft environments. The pricing of related products are given in the figure below:

Figure 11: Dynamics 365 Pricing in related products.

Analysis of 5 vendors

1- PaperSave for Dynamics 365 Finance & Operations

PaperSave natively integrates with various Dynamics 365 products as given in table above.The features of PaperSave that can extend Dynamics AP automation are:

• PaperSave offers 13 different ways of capturing documents. It can deliver documents through scanners, fax, email, printing, recapturing, drag and dropping, attaching and Microsoft Office/Outlook integration.
• You can retrieve documents with relevant queries with a click. Information, including hyperlinks to each document, can be exported to Excel. This can facilitate the audit process.
• PaperSave allows you to search content whether structured and unstructured. It has a similar mechanism of Google search engine that uses record & user values.
• PaperSave can be used in mobile devices. You can control documents & capture invoices with OCR via your mobile device. 

2- AvidXchange AP & Payment Automation

Avidxchange offers an API integration with Dynamics. The features can extend Dynamics’s AP automation are:

• You can create as many custom workflows as you need to replicate your existing approval process.
• With the API integration, the data between Dynamics and Avidxchange is automatically synchronized. 
• You can convert your checks to e-payments.
• Avidxchange offers a variety of payment options including MasterCard; AvidPay checks; or AvidPay Direct.¹³  

3- Basware Accounts Payable Automation

Along with invoice scanning and procurement solutions, Basware offers an AP automation specific solution for Dynamics.¹⁴  

The prominent features offered for Dynamics are:

• With SmartCode, users can route invoices to the authorized people with PO and invoice data. Feature also includes automatic coding templates that can help with validation 
• Users can set up automatic payments for recurring non-PO invoices using schedules, budgets, or self-billing payment plans.
• Basware offers a global network with 220+ e-invoicing partners. This can help receiving invoices from different vendors in a centralized way.

4-Esker Accounts Payable Automation 

Esker offers end-to-end & pre-built integration with Dynamics 365. Solutions that can extend Dynamics AP automation includes:

• Esker’s mobile app, Esker Anywhere™, allows managers to review, approve, and reject purchase requisitions and supplier invoices.
• Within a Dynamics 365 workflow, Esker allows for the electronic processing of both PO and non-PO invoices, including invoice verification, approval, and automatic posting. It can also automatically generate and confirm sales orders.
• Esker offers a suite that can directly integrate with: Dynamics 365 Finance & Operations (cloud) and Dynamics 365 Business Central.

5- Medius Accounts Payable for Microsoft Dynamics 365 Finance and Operations

Medius offers built-in integration with Dynamics. The solutions offered for Dynamics AP automation are: 

• Medius offers a mobile application with OCR that allows users to capture invoices & create requisitions with mobile devices.
• Medius automatically distributes invoices for review and approval
• Users can manage invoice periods with automation for monthly recurring routines 
• Medius integrates with all Dynamics ERPs, including AX, GP, NAV, and D365. 

6- Rillion

Rillion offers ready-made integration with Dynamics 365 for Finance and Operations. The solutions Rillion offer in integration include:

• Rillion provides a cloud-based archive of all processed and pending invoices. This way users can sort and retrieve invoice records as needed.
• Rillion automates the matching of purchase orders, invoices, and goods receipts, supporting both two-way and three-way matching.
• A timestamped audit trail is offered for all transactions in line with compliance with internal and external audits.
• Approved invoices are transferred to Dynamics 365 for payment processing. Alternatively, Rillion Pay can be used to automate payments directly.

5 things to consider while choosing AP automation solution for Dynamics

Integration: The AP automation software should integrate with -several- Dynamics products. This can facilitate synchronization and data accuracy across systems in cases such as managing multiple invoices and pending vendor invoice lines.

Automation capabilities: Evaluate the software’s ability to automate the entire  tasks embedded in the accounts payable process to avoid manual data entry and vendor-lock-in.

Scalability: Consider whether the AP automation solution can scale with your business needs and if they can handle an increasing volume of transactions and data without performance loss.

Compliance: Assess the software’s compliance with industry regulations

Support and usability: Determine the level of customer support offered and the software’s ease of use. Adaptability for your accounts payable team with a minimum training is also a pro.

Dynamics 365 case studies

Columbia Sportswear Company

Columbia Sportswear, dedicated to equipping people for the outdoors with its range of apparel, footwear, and accessories has adopted Microsoft Azure along with Dynamics 365 Finance, and Dynamics 365 Supply Chain Management to streamline its operations.

Columbia utilized tools such as IT data centers, warehouse inventory and point-of-sale systems. This move proved beneficial during record-breaking holiday sales in 2019 and provided corporate resilience during the COVID-19 pandemic. The investment in cloud technology has enhanced Columbia’s business performance overall.¹⁵

Bel Fuse

Bel Power Solutions switched from a relatively costly ERP system to Microsoft Dynamics 365. This move automated their financial operations and improved supply chain visibility, saving them nearly $2 million annually in IT services.

Dynamics 365 also allowed Bel Fuse to handle more finance tasks in-house, like managing an Italian site’s finances from Slovakia, leading to further cost reductions. This new system is less customized, ensuring future flexibility.¹⁶

Alterra Mountain Company

Alterra Mountain Company, which initially merged four companies with seven different ERP systems, adopted Dynamics 365 to unify its financial and operational management. This transition allowed them to have a single financial system and a consistent view of customer interactions across various locations. 

They standardized on a single chart of accounts, and thus achieved consistent financial reporting throughout the company. Alterra further streamlined their procure-to-pay process using Dynamics 365 with the aim to improve buying efficiency and implement centralized procurement, which increased POs and reduced supplier numbers significantly.

This system provided a comprehensive view of procurement across all units. Additionally, the use of Dynamics 365’s expense management features has simplified expense submissions for about 900 users.¹⁷

Kinara Capital

Before implementing Dynamics 365 finance, Kinara was uploading 100,000 transactions that took nearly two hours each day. After the implementation, the company was able to handle four times as many transactions in the same duration without needing additional resources.

Tasks such as managing prepaid loans, fixed assets, and fixed deposits were also automated. Rojinn Anto, VP-Accounts at Kinara Capital, highlights another feature of Dynamics 365 as a crucial tool: transition to remote work in the pandemic. The platform ensured cloud integration, maintaining timely deliverables and quality standards.¹⁸

Hampton Products

Hampton Products utilized Dynamics 365 Finance in the accounting procedures such as:

• speed up the financial transactions
• improving precision and security in transactions
• accessing real-time financial and operational data

This way, the company eliminated the need to wait for offline business cycles. Dynamics also helped Hampton in accurate forecasting and detailed inventory cost models with a clear view of the total inventory value, including items in warehouses or in transit.

Further benefits of Dynamics 365 Finance were the management of fixed assets, revenue deferment, and year-end closing processes.¹⁹

Further Reading

• In-Depth Guide to Accounts Payable (AP) Automation
• Accounts Payable (AP) Automation Tools Benchmarking
• 5 AI Applications in Accounts Payable (AP) Processes
• Automated Invoice Validation: Benefits & Use Cases
• Finance Automation: What It Is, Best Tools & 6 Processes
• Enterprise Invoice Processing: 4 Guidelines & 3 Solutions
• 7 Vic.AI Alternatives to Automate Accounting
• Top 10 ReadSoft Alternatives / Competitors
• Top 10 Kofax Alternatives/Competitors
• 14 Rossum AI Competitors/Alternatives

External Links

• 1. “Ardent Partners’ Accounts Payable Metrics that Matter in 2023” January 24, 2024. 
• 2. Microsoft discloses scale of Dynamics software in annual report. CNBC
• 3. ”Overview of AP Automation Features Inside Dynamics 365 Finance” Retrieved on 14 October 2024
• 4. Install the Invoice capture solution - Finance | Dynamics 365 | Microsoft Learn.
• 5. Create vendor groups - Training | Microsoft Learn.
• 6. Configure terms of payment and payment days - Training | Microsoft Learn.
• 7. Accounts payables analytics - Business Central | Microsoft Learn.
• 8. Find the right app | Microsoft AppSource.
• 9. Enhance business performance with Microsoft Dynamics 365 Finance Premium - Microsoft Dynamics 365 Blog. Dynamics 365 Blog
• 10. Microsoft Dynamics 365 Business Central Reviews 2025: Details, Pricing, & Features | G2.
• 11. Microsoft Dynamics 365 Business Central Reviews 2025: Details, Pricing, & Features | G2.
• 12. Finance Management Software Pricing | Microsoft Dynamics 365 .
• 13. AvidXchange AP & Payment Automation.
• 14. Basware Accounts Payable Automation.
• 15. Columbia Sportswear gains business flexibility and a sales boost with Microsoft Azure and Dynamics 365 | Microsoft Customer Stories.
• 16. Manufacturer unifies data and gains agility in finance and supply chain with Dynamics 365 | Microsoft Customer Stories.
• 17. “ Microsoft Customer Stories Search” January 24, 2024. 
• 18. Kinara Capital achieves anywhere accounting with Dynamics 365 Finance | Microsoft Customer Stories.
• 19. Hampton secures warehouse efficiency with Dynamics 365 | Microsoft Customer Stories.