Blog: ERP

Vendor Invoice Automation: The Microsoft Dynamics 365 Edge

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March 14, 2024 - by Synoptek

Global organizations depend on many vendors and partners to efficiently run their businesses and achieve long-term goals. But for these partnerships to be successful, it is important to streamline vendor management tasks, especially around invoices. Read on to learn more about the need for vendor invoice automation and the role Microsoft Dynamics 365 Finance plays.

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Vendor Invoice Automation: A Business Priority

Whether you have an ERP implemented, applications in the cloud, or a bunch of security tools in place, each platform and solution is managed and supported by a competent vendor. However, dozens of system integrators, resellers, specialist suppliers, and IT support partners make managing invoices and maintaining vendor relationships a Herculean task.

Manually processing paper invoices is not only time-consuming but also extremely prone to error. It is labor-intensive and offers poor visibility into the status of different invoices. The cost per invoice is also very high, and organizations often have a tough time identifying incorrect or missing line items and handling exceptions. There is also a higher probability of risk or fraud caused due to data entry errors, payment delays, and lost invoices.

Vendor invoice automation streamlines the process of submitting and processing invoices. By submitting imported vendor invoices to the workflow system and matching posted product receipt lines to pending vendor invoice lines, automation enables accounts payables clerks and managers to:

  • Enjoy high levels of visibility and transparency into the progress of a vendor invoice as it moves through each of the invoicing processes.
  • Process vendor invoices more efficiently and minimize the errors and inefficiencies caused by manual data entry – thus strengthening vendor relationships.
  • Automatically apply prepayments to vendor invoices, match product receipts to pending invoice lines, and quickly and efficiently view workflow and automation history.
  • Process multiple invoices simultaneously for different vendors for different requirements and across different timelines.
  • Reduce the time spent creating, managing, and sharing invoices, thus minimizing labor costs while closing deals quickly and efficiently.
  • Focus more on strategic tasks and minimize the time spent entering details into spreadsheets, emailing invoices to vendors, and ensuring timely payments.
  • Track and manage invoices via a centralized platform and get real-time insight into invoices – regardless of the department, service, or location.

Streamlining Vendor Invoice Automation with Microsoft Dynamics 365 Finance

Microsoft Dynamics 365 Finance offers a vendor invoice automation workspace that lists all information related to vendor invoices. From invoice summaries to visualizations related to vendor invoices, this workspace provides comprehensive insight into current and past invoices. It also provides a list of invoices that are completed, pending or have failed, as well as the reason for failure. Here’s how teams can leverage vendor invoice automation capabilities in Dynamics 365 Finance:

  • Automatically submit vendor invoices: With Dynamics 365, vendor management teams can automate the submission of invoices. Using a flexible framework, they can define company-specific rules, specify the frequency of submissions – either hourly or daily – and apply prepayments before or after posting the imported invoice.
  • Match product receipts to invoice lines: Dynamics 365 Finance allows vendor teams to automatically match posted product receipts to invoice lines that have a three-way matching policy defined. The process runs continuously until the matched product receipt quantity equals the invoice quantity. Teams can specify the maximum number of times that the system should try to match product receipts to an invoice line before it concludes that the process failed.
  • View historical vendor invoice information: In Microsoft Dynamics 365 Finance, teams can get an easy-to-read view of vendor invoice workflow history directly from the vendor invoice. Not only does this minimize the time needed to view critical invoice information but it also helps identify the current process step, as well as the steps that have already been completed.
  • Track amounts and dates: In Microsoft Dynamics 365, vendor management teams can view dates when the company received the invoice from the vendor. This works as a starting point for tracking the invoice’s progress through the automation processes. They can also view the invoice amount and sales tax amount for vendor invoices and ensure that invoices are posted only if the imported values match the calculated values.
  • Create vendor invoices from digital invoice images: Dynamics 365 Finance makes use of optical character recognition to create vendor invoices from digital invoice images. This minimizes the efforts needed by AP accountants to verify data on invoices, make adjustments or corrections during the period close, and prevent financial losses due to error or fraud. It also allows teams to read different invoice formats from different vendors without much human intervention and improves the accuracy of invoice processing.

Build Long-term Vendor Partnerships

The strength of your vendor relationships strongly correlates with the overall success of your business. While there are many aspects to establishing and maintaining a good rapport with vendors, invoice processing is a critical aspect that needs special attention. Vendor invoice automation can go a long way in streamlining the invoicing process, bringing much-needed accuracy and precision. It can lead to faster approvals, lower costs, and increased visibility and control.

Leverage the vendor invoice automation capabilities of Dynamics 365 Finance today to reduce invoicing errors, boost team productivity, and ensure timely payments.

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