Business Central’s New Payables Agent (2025): A Practitioner’s Deep Dive

August 15, 2025|In Copilot|7 Minutes

Business Central’s New Payables Agent (2025): A Practitioner’s Deep‑Dive

The new Payables Agent in Dynamics 365 Business Central (v26.3+) monitors a mailbox for vendor invoices, uses AI to extract data, drafts purchase invoices for review, and posts them per your policies—reducing manual AP entry and errors. It also leverages generative AI to answer common invoice questions such as:

  1. Expense type
  2. Payment status
  3. Subscription deferral
  4. Fixed asset purchases
  5. Departmental cost splitting
  6. Policy compliance
  7. Standard handling of expenses

See the video for more information

Introducing: Payables agent

Why this matters

Accounts Payable (AP) teams spend huge chunks of time triaging emails, rekeying invoice data, and chasing exceptions. The Payables Agent automates the low‑value parts so your team can focus on approvals, vendor relationships, cash planning, and exceptions.

What you can expect

  • Less manual data entry and fewer errors
  • Faster invoice cycle times and higher first‑pass match rates
  • Centralized, auditable flow from inbox → draft → approval → posting

What is the Payables Agent?

The Payables Agent is an AI‑driven teammate inside Business Central that:

  • Monitors designated email mailboxes (e.g., ap@yourcompany.com) for vendor invoices (typically PDF attachments).
  • Extracts header/line details (vendor, dates, totals, taxes, lines, PO reference) and applies your policies and purchase history.
  • Creates purchase invoice drafts in Business Central for a human supervisor to review and correct if needed.
  • Routes invoices into your existing approval workflows and posts once approved.

Status: Production‑ready preview in BC 26.3 (2025 Release Wave 1). Ideal for a controlled pilot before broad rollout.  This feature is currently available only for US tenants; you can create a sandbox within your admin area.

Who is it for?

  • AP leaders who want measurable efficiency gains without a full rip‑and‑replace
  • Controllers/CFOs who need auditability and policy enforcement
  • IT/BC admins who want to introduce AI safely and incrementally

Prerequisites (quick checklist)

  • Business Central v26.3+ environment
  • An AP intake mailbox (Microsoft 365) dedicated for vendor invoices
  • Permissions to configure Copilot & Agent features in BC
  • Defined approval workflows and posting policies

Tip: Before you turn it on, standardize how vendors send invoices (PDF, one invoice per email, include PO number in subject/body).

End‑to‑end flow at a glance

  1. Vendor sends invoice → lands in AP mailbox.
  2. Agent picks it up → extracts data (header + lines).
  3. Draft is created in BC → supervisor reviews.
  4. Corrections (if any) → the agent learns patterns over time.
  5. Approval workflow → routed as per your policy.
  6. Post & archive → GL impact + audit trail.

Step‑by‑step setup (approx. 60–90 minutes)

  1. Enable Copilot/Agent features in BC admin settings.
  2. Create/confirm the AP mailbox (e.g., ap@yourcompany.com).
  3. Connect the mailbox in the Payables Agent setup wizard.
  4. Define parsing rules & policies (e.g., default vendor mapping, tax handling, tolerances).
  5. Set supervisor role(s) and security, including who can review drafts and post.
  6. Test with 10–20 historical invoices—measure extraction accuracy and corrections.
  7. Switch to pilot mode with real vendors; monitor KPIs weekly.

Governance tip: Keep a simple “exceptions log” for 30 days of pilot to drive policy tweaks.

Configuration tips & best practices

  • Mailbox hygiene: Ask vendors to send machine‑readable PDFs; discourage scans with handwriting.
  • Vendor normalization: Align vendor names/IDs and require invoice # + PO # in subject or body.
  • Tolerances: Set realistic 2‑ or 3‑way match tolerances so the agent doesn’t over‑flag small variances.
  • Tax rules: Confirm jurisdiction rules (HST/GST/PST/VAT) and default codes before go‑live.
  • Attachment retention: Store original PDFs alongside posted invoices (BC + SharePoint) for audit.
  • Security: Restrict posting permissions; separate duties between reviewer and poster.

What the reviewer sees

  • A draft purchase invoice with:
    • Detected vendor
    • Invoice/PO numbers, dates, currency
    • Lines (descriptions, quantities, unit costs, tax)
    • Totals and tax breakdown
    • Original PDF attached
  • Inline suggestions (e.g., “Mapped to Vendor X by email domain”)
  • Quick‑edit fields and an Approve/Send to Workflow action

Limitations & gotchas (as of preview)

  • Format sensitivity: Handwritten or poor‑quality scans can degrade accuracy.
  • Non‑PO invoices: Still supported, but you’ll want stronger policies for coding & approval.
  • International tax variety: Validate rules for multi‑jurisdiction operations.
  • Change management: Agents reduce keystrokes; they don’t replace approvals or policies.

Plan for a weekly triage of misclassifications during the first month.

Security, privacy, and audit

  • Use role‑based access for reviewers/posters
  • Maintain the email → draft → approval → posting audit trail
  • Keep original files attached to the posted document
  • Review your data residency/compliance stance if you operate across regions

Measuring success: KPIs to track

  • First‑pass extraction accuracy (% of drafts needing zero edits)
  • AP cycle time (email received → posted)
  • Touch time per invoice (minutes) and invoices per FTE
  • Exception rate and rework causes
  • Duplicate/overpayment incidents (should drop)

Target: 60–80% first‑pass accuracy in month 1, improving with policy clean‑up and vendor outreach.

Two‑week pilot plan (template)

Week 1

  • Day 1: Enable features; connect mailbox; set policies
  • Day 2: Import 20 sample invoices; tune mappings
  • Day 3–4: Train reviewers; finalize approval flows
  • Day 5: Start live capture with 5–10 vendors

Week 2

  • Daily: Review drafts; log exceptions
  • Day 8: Adjust tolerances/tax rules
  • Day 10: Check KPIs; decide on expansion

Artifacts: exceptions log, vendor communication template, KPI dashboard screenshot, go/no‑go memo.

FAQs

Does the agent learn from corrections? Yes—over time it improves vendor identification and field mapping. Keep corrections consistent.

Do we still need approval workflows? Yes. The agent drafts invoices; your approvals remain in control.

Can it handle multiple companies? Yes—configure mailbox routing and company‑specific policies.

What about duplicate invoices? Use BC’s duplicate checking + enforce vendor invoice # rules.

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