Unlocking Invoice Management Efficiency in Microsoft Dynamics 365FO

White Paper

December 16, 2019

TABLE OF CONTENTS

Introduction

Today, organizations are managing their accounts payable (AP) operations in a variety of ways. Some back offices remain in the era of paper—where AP clerks must manually scan and enter paper invoices—while other organizations may have a homegrown or enterprise resource planning (ERP) solution in place to automate part of the AP process. These methods for managing AP operations have been the status quo for years. But, innovative, new solutions have proven to be more optimal in terms of efficiency, maintenance, and costs.

In particular, for organizations using MS Dynamics as their ERP, there are significantly more benefits for ERP-based AP tools. MS Dynamics 365 for Finance and Operations (MS D365FO) consolidates and provides visibility into many of the financial operations at an organization, while also enhancing current business processes and offering business intelligence.

However, MS D365FO alone does not meet the many needs of AP organizations—such as invoice data entry, routing, streamlined payments, and mobile accessibility. Consequently, this leads some organizations to adopt a separate AP solution specifically for the functions of AP. While this solution may be extremely helpful in targeting AP inefficiencies and may offer more advanced functionality than an ERP-based tool, the lack of integration with the organization’s ERP often leads to a data disconnect and challenges in internal adoption.

In this whitepaper, Levvel Research details why organizations using MS D365FO should choose a solution that is both advanced in its AP functionality and deeply integrated with MS Dynamics.

Challenges of Managing AP With Just MS D365FO

MS Dynamics is a popular ERP known for its advanced finance and business operations capabilities. It has the advantage of being part of the Microsoft suite of solutions, and thus has the affiliated connections and support. For example, Dynamics has a built-in connection with other Microsoft products, such as Outlook, which is a commonly used email platform for many organizations. In addition, Dynamics offers features built into the Azure cloud platform—such as continuous and centralized updates.

However, MS D365FO’s current AP support capabilities are very limited, and the ERP does not offer any true AP automation. With MS D365FO—which sells itself as a “comprehensive business management solution”—organizations report that manual data entry and manual routing of invoices are significant pain points (see Figure 1). Because the ERP alone cannot capture invoice data automatically, AP clerks must manually enter invoice and payment information. Then, because MS Dynamics has limited workflow capabilities to support AP requirements, the clerks end up routing those invoices separately for approval.

Figure 1

Pain Points of MS Dynamics Users

Main AP Pain Points Include Manual Processes

What are the top three biggest pain points you experience in your work ow process? (Select up to 3)


Given these pain points and the constraints of ERP functionality, AP departments that want to reach the next level of efficiency and performance face significant barriers without turning to technology. In fact, in order to meet their goals, many organizations will need to adopt an AP solution that:

  • Extends the Dynamics system beyond its current reach.
  • Eliminates paper.
  • Automates manual tasks.
  • Streamlines and modernizes AP operations.

Benefits of Extended AP Solutions for MS Dynamics 365FO

When it comes to AP solutions, organizations have a few different options. The appeal of different solution types and use cases varies by organization depending on their existing technical environment, budget, industry, or regulatory requirements:

  • Embedded use cases involve AP tools that are deeply integrated into the Dynamics system, offering underlying technology that bridges the gaps between the AP and ERP functions. This method champions ease of use and simplifies processes as it consolidates different interfaces and data environments for finance teams. However, because the features are nested within Dynamics, its functionality still lives within the clumsy interface of the ERP.

  • Standalone use cases involve solutions that are completely separate from MS D365FO; instead, they connect to the ERP via a specialized integration. These are external, standalone tools that often have sleeker designs and more capabilities than the ERP. However, for some organizations, the transition to using this software for AP functions can be complex and time-consuming. Furthermore, managing data between the two systems can involve additional diligence and time.

  • Extended use cases involve software that bridges the previous two models—a solution that is still seamlessly integrated with MS D365FO yet extends the current ERP through additional features. These options are typically web-based services that operate alongside D365FO; they provide the user with a more appealing and role-based interface, as well as broader functionality. What’s more, this solution’s capabilities are not restricted to what is offered on MS D365FO; instead, it enhances what is already offered and adds more.

Important AP Solution Features

An important characteristic of extended solutions is the revamped user interface (UI) and user experience (UX). Updating the look and feel of a solution makes it easier for users to navigate and complete their tasks. According to Levvel Research survey data, ease of use is the most important criteria for purchasing an AP solution (see Figure 2). Furthermore, UI/UX is the fourth-most important criteria, which could also be considered a contributor to ease of use.

Figure 2

Relative Importance of AP Solution Purhcase Criteria

Purchase Criteria for AP Solutions

For each set, please select the least important criteria and the most important criteria. (Selected "Most Important") (n = 258)


Ease of use technologies—often supplemented by modern UI and UX—are critical for the work satisfaction of the end-user (i.e. professional users within finance and occasional users in business). For instance, if the experience is “fun” and simple, employees tend to be more motivated to use the system and are more productive. In almost all cases, well-designed software that was created with the end-user in mind is more successful in gaining buy-in and adoption, thus resulting in higher ROI. And, ideally, these designs are not completely foreign from the MS D365FO interface; they might have a similar look and feel, use the same terminology or business logic, or place menu panes in a recognized order to ensure users are familiar with and comfortable in the new environment. Extended AP solutions also have the flexibility to manage different types of invoice formats, whereas the MS D365FO system cannot.

Invoice Format Types

Paper is still a quite common invoice format. Actually, when combined with other manual methods such as email and fax, they make up more than 75% of the average organization’s invoice volume (see Figure 3). However, these manual forms are time-consuming to process and often lead to issues such as missing invoices, high rates of exceptions, and lost data.

Figure 3

Invoice Receipt Type By Organization Size

Enterprise Organizations Report the Lowest Volume of Paper Invoices

Please allocate 100 percentage points to indicate the methods in which your organization receives invoices. (n = variable)


Accordingly, an AP solution should be able to automate the manual processing of these paper and emailed PDF invoices. It should also be able to support all invoice types—including EDI, XML, and electronic invoices submitted through e-invoice networks and supplier portals. This sort of flexibility is not offered within the MS D365FO ERP.

Added Benefits of Extended AP Solutions

Due to its short learning curve, some additional benefits of extended AP solutions include higher internal adoption rates and greater productivity among employees. Moreover, because this type of solution balances embedded integration with the advanced features of an external solution, it also maximizes the efficiency of automated AP. Hence, it expedites AP processes and frees up AP professionals to handle exceptions and more strategic work—instead of relying on them for tedious data entry.

Extended AP Software Functionality

When adopting an MS D365FO-specific extended AP solution, organizations should look for a few key features.

First and foremost, it is crucial that the solution seamlessly integrates with MS Dynamics. This must include touchless data synchronization or embedded navigation panes. In addition, it is also critical that the solution offers an extension of MS D365FO’s existing features. The solution should have supplementary capabilities and flexibility that D365FO and other Microsoft products, like AX, do not offer.

Next, the solution should be modern, cloud-based software. (Azure-hosted platforms work especially well with the Microsoft suite.) Cloud-based solutions—rather than on-premise products—are much more scalable, secure, and flexible, thus ensuring a greater long-term ROI. As a result, cloud-based software also allows for real-time functionality and accessibility, as well as a single source of truth for invoice data. Other benefits include its ability to reduce overall IT maintenance costs in an organization; provide a stable data back-up in the cloud; and complete continuous, automatic updates.

Advanced UI and UX designed specifically for AP users and approvers take these integrated solutions to the next level. A simple, intuitive and mobile-first interface means that less training is required, resulting in easy adoption and increased flexibility. The features might have a familiar structure or “look and feel” to MS D365FO to make it feel natural for users, but it should actually be even simpler, less cluttered, streamlined, and modern.

The solution should also offer all of the cutting-edge features of the leading AP tools available today. These include OCR and data-capture capabilities, and the ability to support and process multiple different types of invoices, including electronic invoices. Workflow automation is another important aspect of AP software—including routing, reviewing, approving, ledger account coding, and simultaneous processing of multiple invoices. Users should also be able to attach pictures and other documents to invoices, as well as manage approval workflows. And, mobile accessibility and coding make the solution even more convenient for approvers.

Advanced AP tools leverage innovative and emerging technologies to enhance basic automation capabilities. Beyond data capture and workflow features, an AP-powered feature might be an actionable history log for every invoice with collaborative commenting and messaging functionality. Solutions might also include a data dashboard and analytics tools, as well as configurable privacy controls.

About the Sponsor

Dooap is a multinational Accounts Payable automation company headquartered in Austin, TX. It offers a world-class AP automation solution designed for Microsoft Dynamics 365FO and hosted in Microsoft Azure cloud. Dooap provides a great user experience – on mobile and on desktop.

By simplifying and automating the AP process, Dooap helps SME, midmarket and enterprise companies save time and increase efficiency by making invoice management simpler and smarter. Dooap supports mobility and results in fewer errors, and lower purchase-to-payment processing costs. Your AP professionals will have more time for exceptions rather than routines.

Visit dooap.com for more information.

Authored By

Jamie Kim

Research Content Specialist

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Meet our Experts

Jamie Kim
Research Content Specialist

Jamie Kim is a Research Content Specialist for Levvel Research based in New York City. She develops and writes research-based content, including data-driven reports, whitepapers, and case studies, as well as market insights within various digital transformation spaces. Jamie’s research focus is on business automation processes, including Procure-to-Pay, as well as DevOps, design practices, and cloud platforms. In addition to her research skills and content creation, Jamie has expertise in design and front-end development. She came to Levvel with a research and technical writing background at an IT consulting company focused on upcoming AI and machine learning technologies, as well as academic book editorial experience at Oxford University Press working on its music list.

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