If your AP team is spending most of their time on tasks that should happen automatically — keying invoice data, chasing approvals, fixing mismatches — the problem usually isn't effort. It's workflow design.
Dynamics 365 has the infrastructure to handle invoice automation end to end. Most teams aren't using it fully. This post explains where manual processing tends to creep back in, how to identify your specific bottlenecks, and what a well-configured workflow actually looks like.
Start by finding where the time actually goes
Before changing anything, map your current invoice journey and put a number on each step. Most AP teams are surprised by what they find.
The questions to answer:
- How does each invoice enter the system? Email, PDF, e-invoice, portal?
- How much of that data is keyed manually versus captured automatically?
- What percentage of invoices match on the first pass, and what triggers exceptions?
- How long do invoices sit in approval, and with which approvers?
- How often does an invoice get posted without any manual intervention at all?
That last number — your touchless rate — is the clearest single indicator of how well your automation is working. Industry benchmarks suggest best-in-class AP teams achieve 70–80% touchless processing. If yours is significantly below that, the bottleneck analysis below will tell you why.
The four places manual processing lives
1. Invoice capture
The most common source of manual work in AP isn't approval — it's data entry at the front of the process. An invoice arrives, someone downloads it, opens D365, and keys in the supplier, amount, dates, and PO reference by hand.
This is entirely avoidable. Automated capture within D365 handles PDF invoices via email ingestion, structured formats like XML and EDI, and e-invoices via Peppol and equivalent standards. Extraction rules pull the relevant fields and validate them against your vendor master before AP sees the invoice.
The output isn't just speed — it's consistency. Manual data entry introduces errors that compound downstream: wrong PO numbers that break matching, transposed amounts that hold up payment, missing VAT codes that cause posting failures. Automated capture removes the error class entirely.
2. Matching and coding
Even teams with decent capture often hit a wall at matching. The invoice comes in cleanly but the matching rules are either too rigid (flagging every minor variance) or too permissive (letting legitimate mismatches through).
Two things fix this:
Tolerance rules that reflect reality. A 1% price variance on a recurring supplier shouldn't require human review. Configure per-vendor or per-category tolerances and let the system auto-approve within those bounds. Reserve the exception queue for variances that genuinely warrant attention.
Pre-coding for non-PO invoices. For invoices without a purchase order — facilities, subscriptions, professional services — auto-coding rules based on vendor, cost center, or historical patterns mean AP isn't making coding decisions from scratch every time. The system suggests or applies the coding automatically; AP confirms or overrides.
3. Approval workflows
This is where the most time disappears in most D365 environments. An invoice sits with an approver for three days not because they're busy, but because the routing wasn't right, the notification didn't reach them, or there was no visibility into the queue.
A well-designed finance approval workflow in D365 has three properties:
Routing that matches your actual authority matrix. Invoices route by amount, cost center, project code, dimension owner, or PO match result — not to a generic finance inbox. The right person gets it immediately.
Auto-approval for low-risk invoices. Invoices that match on all criteria and fall within policy thresholds don't need a human to approve them. Configure auto-approval rules and let AP focus on the cases where judgment is actually needed.
Visibility at every stage. AP can see where every invoice is in real time — who it's with, how long it's been there, and whether any SLA is about to breach. Approvers see their queue clearly and can act from any device without needing direct D365 access.
4. Exception handling
Every AP team has exceptions. The problem isn't that exceptions exist — it's that most teams handle them informally, which means they pile up, get forgotten, or get resolved inconsistently.
Exceptions need a structured path inside D365: automatic notification to the right person, a defined response window, escalation logic if nothing happens, and a full log of resolution. When exceptions are managed inside the same workflow engine as standard invoices, they get cleared faster and don't accumulate into a backlog that derails period close.
What a fully automated invoice workflow looks like in D365
End to end, the flow looks like this:
Invoice arrives via any channel → captured and validated automatically → matched against PO and receipt, or auto-coded for non-PO → auto-approved if within policy, or routed to the correct approver → posted directly to the general ledger and subledgers → status visible in real-time dashboards throughout.
At each stage, the system is making decisions that would otherwise require a person. AP's role shifts from processing to exception management and continuous improvement — reviewing KPIs, adjusting matching tolerances, identifying suppliers whose invoices consistently create problems.
The KPIs to track once you've made changes
Reducing manual invoice processing isn't a one-time project. It's an ongoing configuration exercise that requires measurement to sustain.
Track these monthly:
Touchless rate. The percentage of invoices that go from capture to posting without manual intervention. This is your headline number. Target incremental improvement each quarter.
Invoice cycle time. Average days from receipt to posting. A 2026 study by Avanade on D365 AP automation references a 40–60% reduction in cycle time as a repeatable outcome from well-configured workflows.
Exception rate. The percentage of invoices that require manual intervention at any stage. Broken down by supplier, invoice type, and workflow step, this tells you exactly where to tune next.
Approval turnaround by approver. If one person is consistently holding invoices longer than others, that's a process conversation, not an AP problem. The data makes it visible.
Cost per invoice. The full operational cost divided by monthly volume. This is the number that connects AP performance to finance leadership.
Where to start
If your touchless rate is low and cycle times are long, the fastest wins are usually in capture and matching — two areas where configuration changes produce immediate results without requiring broader process change.
If cycle times are reasonable but approval turnaround is slow, the problem is workflow design: routing rules, notification logic, and auto-approval thresholds.
If both are problems, start with capture. Everything downstream is cleaner when invoices arrive in D365 with complete, validated data.
Truvio's AP Automation (ExFlow) runs natively inside Dynamics 365 — no separate platform, no integration overhead. Book a demo or read the AP Automation Maturity Report to see where your process stands.
.svg "truvio_logo"){kind=small}
