What is the best AP automation software that integrates with Microsoft Dynamics 365?

AP automation means something slightly different depending on which version of Dynamics 365 you’re running, and that’s easy to miss when you’re comparing vendors. Most guides on the topic reduce it to invoice capture: scan a PDF, extract the fields, match it to a purchase order, and post it to the ledger. That’s worth automating, of course, but it’s only one part of what happens to spend before it reaches Dynamics.

The bigger issue for controllers on Dynamics 365 is everything that isn’t a supplier invoice. Card spend, employee expenses, and reimbursements usually sit in separate tools or spreadsheets until someone keys them into Dynamics by hand at month-end. Invoices get automated, and everything else stays manual, and that’s usually where the close bogs down.

This guide covers what AP automation for Dynamics 365 actually means, where Dynamics 365’s native tools stop, what to look for when comparing vendors, and how the main options stack up, including when a Dynamics-native specialist is genuinely the right call. By the end, you should have a clear way to decide whether you need an invoice tool, or something that controls all your spend.

What is AP automation for Microsoft Dynamics 365?

AP automation for Microsoft Dynamics 365 is software that captures, codes, approves, and pays supplier invoices, and ideally all other business spend, so it all flows into Dynamics 365 without anyone re-typing it. The phrase gets used loosely, though, because ‘Dynamics 365’ isn’t one product. It’s three, and which one you’re on changes what AP automation looks like in practice.

Work out which product you're on before you start comparing tools. A connector built for Business Central won't behave the same way against Finance, and pricing, setup time and features all shift depending on the underlying product.
This matters because most vendor marketing talks about ‘Dynamics 365 integration’ as if it's one thing. It isn't. Ask any vendor on your shortlist to say exactly which of the three products they support, and what data actually moves in each direction.

Does Dynamics 365 automate accounts payable natively?

Yes, up to a point. Dynamics 365 Finance and Finance & Operations both have invoice capture built in, which reads digital invoice images with OCR and AI and turns them into vendor invoice records without anyone typing them out. There's also automated vendor invoicing, which matches product receipts to pending invoices and pushes them through workflow on its own.

Microsoft covers the setup and licensing for both in its documentation on invoice capture and automated vendor invoicing. Business Central missed out on this particular engine, so BC customers are reaching for an extension or a third-party connector from the start.

Even where the native tools exist, there are a couple of catches worth knowing before you assume you're covered. Dynamics 365 Finance gives you 100 invoice capture transactions per tenant a month, and after that you're paying for extra Electronic Invoicing capacity. Anyone without a full Finance licence also needs a separate Power Apps licence just to use it.

Neither of these is a flaw in the feature itself, but they're easy to miss if you've assumed ‘we're on Finance, so this comes free.’
The real gap has less to do with licensing and more to do with scope. Native invoice capture only ever touches supplier invoices sitting inside the ERP. It has nothing to do with employee card spend, out-of-pocket expenses, reimbursements, or approvals that span entities.

It won't catch someone paying for something on a personal card and claiming it back weeks later with no policy check, and it won't code that spend before it reaches your ledger. That's the gap finance teams end up building a layer on top for, not because Dynamics' own AP tools fall short, but because they were never designed to cover it.

If your AP process really is just supplier invoices at a manageable volume, native Dynamics might do everything you need. Most mid-market and enterprise teams find that invoices are only ever a slice of what they're actually managing.

What to look for in AP automation for Dynamics 365

Before you look at named tools, it's worth deciding your own criteria first, otherwise vendor pitches end up setting the agenda for you. Here's a checklist worth taking into any evaluation:

• Native two-way Dynamics sync, not just an API pushing data one direction. Spend data should go out to Dynamics, and master data like suppliers, GL accounts and dimensions should come back.
• Clean master-data pull. Suppliers, chart of accounts, financial dimensions and VAT or tax codes need to stay in sync between systems, without someone maintaining two versions by hand.
• Whole-spend coverage. Supplier invoices, card transactions, expenses and reimbursements should all run through one process, not four separate ones.
• Two- and three-way matching. Invoice against purchase order against goods receipt, wherever you raise POs.
• Multi-entity support, if you run more than one legal entity or currency through Dynamics.
• Approval workflows and spend controls, including spend limits and merchant or category rules, set before money leaves the business rather than checked afterwards.
• A live bank feed and native reconciliation, so balances stay current without a manual bank rec every month end.
• Security, audit trail and role-based permissions, especially if you're dealing with SOX-style controls or an external audit.

This matters because most finance teams are already juggling too many disconnected tools. Payhawk's research for The CFO Agenda, produced with Raconteur, found that 85% of finance leaders say visibility is their biggest challenge when managing multiple tools, and 73% point to data quality and consistency specifically. Both come from the same root cause: spend data scattered across systems that don't talk to each other.

Best AP automation tools for Microsoft Dynamics 365, compared

Here's how the tools most commonly shortlisted against Dynamics 365 actually differ, based on which Dynamics product they support, what spend they cover, and who they suit best. None of these is set up to look weak on purpose. Several are genuinely the right choice for teams with narrower needs than ‘control all our spend.’

Payhawk works natively with all three Dynamics 365 products: Business Central, Finance, and Finance & Operations. Finance and F&O connect through a deployable Payhawk extension: a native, two-way sync that imports master data (chart of accounts, VAT rates) and pushes reviewed expenses, settled payments, purchase invoices, and general ledger journals straight into D365, not a file export. Business Central connects directly too. It covers everything: invoices, card transactions, expenses, reimbursements and payments. It's built for finance teams who want control over all their spend and clean ERP data, not just faster invoice processing. See Payhawk's accounts payable automation overview, or the Dynamics 365 Business Central integration and Dynamics 365 Finance & Operations integration pages for how it works.

Medius connects to both Business Central and Finance & Operations, and its integration has passed Microsoft's AppSource validation for both. It stays focused on invoices and payments rather than card or expense spend, which makes it a good fit for large enterprises with high-volume, invoice-heavy AP.

ExFlow (from SignUp Software, also sold as Truvio) sits inside Business Central and F&O rather than integrating as an outside system. It handles invoice capture, coding, matching and approval entirely within Dynamics, so AP staff never leave the ERP. That's the right choice for teams who specifically want AP done inside Dynamics itself.

Continia is built into Business Central and covers invoices, document capture and expense management as native BC add-ons, priced on usage. It suits BC-centric teams who'd rather have everything stay inside Business Central than adopt a separate platform.

Tipalti works with both Business Central and Finance & Operations, and its real strength is global supplier payments, mass payouts and tax compliance across countries, on top of invoice workflows. It's the better pick if cross-border payments, rather than spend control, are your biggest headache.
Stampli covers Business Central and Finance & Operations and takes a collaboration-first approach, built around conversation threads on each invoice rather than rigid workflow steps. It suits AP teams whose main friction is chasing approvers or resolving invoice queries.

Rillion supports Dynamics 365 alongside a wide range of other ERPs and focuses on invoice-centric AP with AI-assisted coding. It's a solid choice for AP-focused mid-market teams, particularly if you're running more than one ERP across group entities.

Check current Dynamics product support directly with each vendor before you shortlist anything. Integration coverage and pricing in this space change often enough that even a year-old comparison can be out of date.

Considering a switch? Here’s what Payhawk changes

Most AP tools solve for one thing: getting supplier invoices into Dynamics faster. Payhawk starts somewhere different, on the idea that your ledger only stays clean if every type of spend, not just invoices, is coded and controlled before it reaches Dynamics.

On Business Central, Payhawk pushes expenses, card transactions and bills across as purchase invoices or journal entries once an expense is reviewed, and pulls suppliers, GL accounts, financial dimensions and VAT rates back so coding stays consistent between the two systems. The detail is in Payhawk's guide to exporting expenses and payments to Business Central. Worth being upfront about: exported spend lands as a purchase invoice or journal that still needs posting in BC. It doesn't post itself.

On Finance and F&O, spend posts as purchase invoices, expense reports or general ledger journals, with an export you can customise to match how your entity handles payment methods and reimbursement currencies. Payhawk's page on shared data with Dynamics 365 Finance lists exactly which fields sync each way. Two things worth knowing before you rely on them: Dynamics 365 Finance stores a link to the invoice image rather than the file itself, and discount values don't sync across automatically.

A live bank feed keeps balances current once you're connected, and drives Dynamics' own bank reconciliation module, covered in this guide on the Dynamics 365 Finance live bank feed. That real-time part applies to balances and reconciliation specifically, not to how quickly an invoice gets posted after it's exported.

What teams actually notice isn't faster invoice capture on its own; it's less manual coding overall. Nick Millard, VP Finance at GDS Group, put it simply: before Payhawk, his team spent over 15 hours a month coding expenses to make sure spend went against the right budget. Now cardholders code their own expenses as they upload receipts, and his job is to check the final coding rather than do it himself.

If you're weighing up switching from a point AP tool, the case for Payhawk isn't that any one feature is unique. It's that supplier invoices, card spend, expenses and reimbursements all reconcile to Dynamics through one platform, so you're not maintaining a second system just to keep the ledger clean.

How AP automation speeds your month-end close in Dynamics 365

A faster close comes down to three things working together: clean master data, automatic export of every type of spend, and a bank feed that's already reconciled by the time you get there. Miss any one of those and the close still drags, because someone still has to chase down the gap by hand.

Manual month-end will sound familiar to most Controllers: chasing missing receipts, correcting mis-coded expenses after the fact, going through card statements line by line against the ledger, fixing supplier data that's drifted out of sync. None of these tasks is huge on its own. Add them up across a full ledger, and they cost days.

The automated version clears most of that reconciliation work before month-end even starts, because spend has already been coded, matched and pushed to Dynamics all month, and the bank feed has kept balances current the whole time rather than catching up in one go at close. Carolina Einarsson, Finance Director at Essentia Analytics, shared her experience: since moving to Payhawk, her team's month-end close never takes longer than five working days.

That kind of close time isn't down to one feature. It comes from not having to reconcile card spend, expenses and invoices as three separate jobs against the same ledger.

Six best practices for AP automation in Dynamics 365

A few practical steps make any AP automation choice work harder, whichever tool you land on:

1. Know which Dynamics product you're on before you shortlist anything. Business Central, Finance and F&O each need a different integration approach, so when a vendor says they ‘support Dynamics 365,’ ask them to be specific about which one they mean.
2. Don't let card and expense spend run through a separate tool from invoices. If it bypasses your AP process, it's not reaching the ledger cleanly, and someone ends up fixing it by hand later.
3. Let master data flow from Dynamics rather than maintaining it in two places. Suppliers, GL accounts, dimensions and VAT codes should sync from the ERP, not get typed in twice.
4. Match against purchase orders wherever you raise them. Two- or three-way matching catches pricing and quantity issues before they hit the ledger, not after someone's already queried the invoice.
5. Keep the bank feed live all month, not just at close. That's what turns reconciliation into a non-event instead of a scramble in the last few days.
6. Focus your team on exceptions, not every transaction. The whole point of automation is that people stop keying data in and start making the judgement calls that actually need a human.

What this means for your shortlist

The best AP automation for Dynamics 365 isn't the tool that captures invoices fastest. It's the one that keeps your whole ledger clean, because invoices are only ever one part of total business spend. Native Dynamics 365 Finance and F&O handle invoice capture and automated vendor invoicing well enough, but that stops at the ERP's edge. It has nothing to say about card spend, expenses or reimbursements happening anywhere else in the business.

A platform approach, one system handling every type of spend into Dynamics with clean supplier, GL, dimension and VAT data, is what actually shortens the close. Point AP tools solve the invoice piece well. They leave the rest of your spend exactly where it was.

If your finance team runs Dynamics 365 but still handles card spend, expenses and invoices through separate tools, it's worth seeing how Payhawk syncs every type of spend into Business Central and Finance. Book a demo to see it working against your own setup.