Manual invoice processing is one of the most time-consuming and error-prone tasks in the accounts payable (AP) department. From managing paper invoices to chasing down approvals and rekeying data, traditional workflows often lead to delays, duplicate payments, and compliance risks.
Fortunately, Microsoft Dynamics 365 Finance offers integrated invoice capture solutions that help organizations modernize their accounts payable (AP) processes. Whether you're dealing with hundreds or thousands of invoices each month, automating invoice capture can significantly reduce costs and increase efficiency. Here's how.
Invoice capture refers to the process of automatically extracting key data from supplier invoices, such as vendor name, invoice number, date, amount, and line items, and entering it into your financial system. Advanced invoice capture solutions use OCR (Optical Character Recognition) and AI-driven data recognition to pull information from paper, PDF, and digital invoices with high accuracy.
In the context of Dynamics 365 Finance, invoice capture can be integrated directly into your existing workflows, allowing seamless invoice processing from receipt to payment.
Yes, Microsoft Dynamics 365 Finance offers OCR capabilities through its Dynamics 365 Invoice Capture solution, which leverages AI Builder and Microsoft Power Automate. This functionality enables users to automatically scan and extract data from invoices using machine learning and optical character recognition (OCR) technologies.
The solution is designed to identify key fields like invoice numbers, vendor details, total amounts, and dates—even when the layout varies from one supplier to another. For businesses that require more robust or specialized OCR features, integrations with third-party tools like Kofax, Medius, ABBYY, or Yooz can further enhance data capture accuracy and streamline the entire AP workflow.
Microsoft Dynamics 365 Finance is widely adopted by organizations seeking a comprehensive financial solution. Here are just a few of the reasons why.
Manual data entry is not only slow—it's prone to human error. Invoice capture tools automatically extract and validate data, ensuring that information such as invoice amounts, due dates, and vendor details is accurate before it reaches your ERP system.
With automation, invoices can be ingested, matched, and routed for approval within minutes. This reduces cycle times significantly and helps you take advantage of early payment discounts or avoid late payment penalties.
Invoice capture in Dynamics 365 can be linked to your purchase order and payment processes. Automated 2-way or 3-way matching (invoice, PO, and receipt) minimizes the need for manual review and enables touchless processing for compliant invoices.
AP managers can monitor invoice status in real time and identify bottlenecks quickly. Dashboards and reporting tools provide insights into KPIs like invoice cycle time, exceptions, and vendor performance.
Automated systems create an audit trail for every invoice, showing when it was received, who approved it, and when it was paid. This simplifies compliance with internal controls and external audits.
To implement invoice capture in Dynamics 365 Finance, you can explore native functionality as well as third-party integrations. Microsoft offers Dynamics 365 Invoice Capture, a relatively new capability that uses AI Builder and Power Automate to streamline invoice processing. Alternatively, many companies integrate with AP automation providers like Rio, which offer advanced features such as supplier portals, exception handling, and invoice archiving.
Dynamics 365 Finance's built-in invoice capture feature is a great starting point that continues to be used by a number of organizations. It can handle basic OCR data extraction and seamlessly link invoices to your existing AP workflows. But as your invoice volume grows or your processes get more complex, some AP teams have noticed that they have hit a few limitations.
For example:
So, while Dynamics 365 invoice capture is a solid foundation, it's not always enough for large organizations that want to move beyond automation basics and drive real strategic improvements.
That's where Rio steps in. Think of Rio as the digital AP team member that turbocharges what Dynamics 365 Finance already does.
Here's how:
The best part?
Rio is designed to work with Dynamics 365 Finance—so you don't have to rip and replace your old solution. It's about extending what you already have and taking your invoice automation to the next level. See how it fits with your existing strategy by filling out the form below.