Processing invoices received from vendors is one of the repetitive activities that consistently consumes time in accounting and finance departments. An invoice arrives by email, it needs to be opened and checked, the vendor must be identified, the information extracted, the appropriate G/L accounts determined, the invoice lines entered into the ERP, and finally, the document needs to be reviewed and approved.
For companies processing dozens, hundreds, or even thousands of invoices every month, all these operations quickly turn into a significant administrative workload.
With the development of AI capabilities in Microsoft Dynamics 365 Business Central, a significant part of this process can now be handled by an autonomous agent.
Payables Agent, available in Business Central, is designed to automate the processing of vendor invoices received by email and transform PDF documents into purchase invoices ready for review and approval. The agent combines document processing with generative AI to reduce manual data entry and accelerate the accounts payable process.
From an invoice received by email to a document in Business Central
The scenario is simple. A vendor sends an invoice in PDF format to a dedicated email address used for invoice processing. Payables Agent monitors that mailbox and identifies messages containing PDF documents.
This is where the automated process begins. The agent uses Azure Document Intelligence to extract information from the invoice, including vendor details, document number, dates, amounts, and invoice lines. The extracted information is then analyzed in the context of the data already available in Business Central.
In practice, instead of an employee opening the invoice and manually entering the information into the ERP, the agent can prepare the document for review. And this is where one of the most important differences compared with traditional automation becomes apparent: Payables Agent does not simply extract information. It attempts to understand what needs to be done with that information.
How does it identify the vendor?
For an invoice to be processed correctly, the first important step is identifying the vendor.
Payables Agent can use several methods to establish this match. It can check information such as the VAT registration number or Global Location Number, compare the vendor’s name and address, and, when an exact match is not available, use AI to search for the appropriate vendor in existing data and transaction history. This is particularly relevant in practice because the name displayed on an invoice is not always identical to the name entered in the ERP. There may be formatting differences, abbreviations, or other variations in the vendor’s name. The agent can analyze the available context to identify the most likely vendor. If it cannot establish a sufficiently reliable match, processing stops and user intervention is requested.
What if the vendor does not exist in Business Central?
Another interesting scenario occurs when an invoice comes from a vendor that does not yet exist in the database. Payables Agent can propose creating a new vendor card based on the information included on the invoice. However, creating a vendor is considered a high-risk action and requires explicit user approval. This is a very good example of how Microsoft combines AI autonomy with human control. The agent can prepare the action. The human decides whether it is correct.
AI goes beyond reading the invoice
One of the most interesting capabilities of Payables Agent is accounting classification. After identifying the invoice lines, the agent can suggest the appropriate G/L accounts by using information from the chart of accounts and transaction history. It can also recommend deferral templates when certain expenses should be recognized over a longer period and identify items that correspond to existing products in inventory.
For example, if a company repeatedly receives invoices for certain services, the history of previous accounting decisions can help the agent generate more relevant suggestions. This highlights an important aspect: the more high-quality historical data is available, the more useful the agent’s suggestions can become.
Companies with a limited transaction history will receive fewer automated suggestions because the agent has less information from which to learn existing patterns.
From PDF invoice to purchase invoice
After extracting the data, identifying the vendor, and generating accounting suggestions, Payables Agent can create a purchase invoice draft in Business Central. The document contains the extracted information and AI-generated suggestions and is prepared for user review. It is important to understand the difference between a draft and a posted accounting document. Payables Agent does not automatically post invoices. The agent creates documents in draft status, and the user must review and approve the information before the process is finalized. This approach provides companies with a balance between automation and control.
What happens when the Agent is not sure?
A good AI system is not defined only by what it can do independently, but also by how it responds when it does not have enough information. Payables Agent can request user intervention when it encounters uncertain situations, such as a vendor that cannot be identified or an unclear accounting classification. Instead of continuing the process based on an assumption, the agent escalates the situation to the user. This is particularly important in finance, where an incorrect assumption can have consequences for accounting and reporting.
An AI Agent with its own identity in Business Central
Another important element is traceability. Payables Agent operates with its own user identity in Business Central, and the actions performed by the agent can be attributed to it.
This allows the organization to track which actions were performed by the agent and provides a clearer record of the process.
For finance and accounting departments, this level of visibility is particularly important when automation becomes part of an ongoing operational process.
Control remains with the user
When we talk about automating financial and accounting processes, it is natural to ask: “If AI does all of this, who is left to check it?” Microsoft’s answer is clear: the user.
Payables Agent is designed to automate repetitive activities, not to eliminate human control. Invoices created by the agent must be reviewed before approval, and high-risk actions, such as creating a vendor, require user approval. The agent does not automatically post invoices or make permanent financial changes without explicit approval from a person.
The model is therefore based on a human-in-the-loop approach: AI processes and proposes. The human reviews and approves.
What Does It Actually Bring to the Finance Department?
From a business perspective, the benefits of Payables Agent can be viewed from several angles.
1. Less manual data entry
Information from invoices is extracted automatically, reducing the amount of data that needs to be entered manually into Business Central.
2. Faster processing
Invoices can be processed automatically as they arrive in the dedicated email inbox, without each document having to be manually processed by a team member.
3. More time for value-added activities
Instead of spending hours entering data and searching for information, the finance team can focus on analysis, control, cash flow, reporting, and other activities that require professional expertise.
4. Process standardization
An automated workflow can contribute to a more consistent approach to invoice processing, particularly in organizations handling high volumes or operating across multiple entities.
Data quality becomes even more important
Payables Agent demonstrates a principle that applies to all AI projects within ERP systems: AI is only as useful as the data and processes it is integrated with.
Vendor information needs to be accurate and up to date. The chart of accounts needs to be well structured. Transaction history needs to provide enough relevant information.
The better the data, the better the context the agent has for making matches and generating suggestions.
Therefore, implementing an AI agent can also be a good opportunity to assess the quality of the data in Business Central.
There are also limitations
Like any AI technology, Payables Agent has limitations that need to be considered.
Currently, the agent processes invoices in PDF format and works with emails containing such attachments. Microsoft also specifies volume limitations: up to 100 emails per day and up to 50 emails in a single batch. PDF documents must be no larger than 20 MB and 10 pages. More importantly, AI-generated suggestions should not be treated as infallible. There may be situations where the vendor is incorrectly identified or the proposed accounting classification is not appropriate. That is why human review remains essential.
Payables Agent in Business Central 28: a simple way to test AI
One of the interesting new features in Business Central 28 is the ability to test Payables Agent through a free trial mode, which allows users to process up to 50 invoices without configuring an email inbox for processing. For companies, this can be a good way to evaluate the technology using a controlled volume of documents before deciding whether the automation should be expanded.
Instead of starting directly with a large-scale project, you can test a specific scenario:
- Select a set of invoices.
- Observe how accurately the data is extracted.
- Check vendor identification.
- Analyze the accounting suggestions.
- Measure the time saved.
- Identify situations where user intervention is required.
This way, the conversation about AI moves from “What could it do?” to “What results can we achieve in our actual process?”
What needs to be prepared for implementation?
To use Payables Agent, the organization needs to configure the Business Central environment and the required permissions, while the agent is assigned specific permissions. Microsoft uses a security model in which the agent has its own identity and permission sets, allowing its access to data and functionality to be controlled. Administrators can configure which users are allowed to delegate tasks to the agent and control the agent’s access. The organization can also disable Payables Agent for a company when necessary.
Payables Agent is about more than just invoices
At first glance, Payables Agent may seem like a tool designed to automate invoice data entry. In reality, it illustrates a broader shift in the way we can think about ERP systems. A traditional ERP stores data and executes processes. An ERP enhanced with AI agents can begin to interpret information, make limited operational decisions, and execute a sequence of actions based on an objective, while still keeping the user in control of important decisions.
In the case of Payables Agent, the objective is clear: transforming an invoice received from a vendor into a purchase document ready for review and approval.
Payables Agent in Microsoft Dynamics 365 Business Central is a concrete example of how agentic AI can be used in financial and accounting processes. The agent can monitor emails, extract information from PDF invoices, identify vendors, suggest accounting classifications, and create purchase invoice drafts. But perhaps more important is how it does this:
- It does not eliminate human control.
- It does not automatically post documents.
- It does not turn an AI suggestion into an accounting decision without review.
Instead, it takes over part of the repetitive work and allows the finance team to focus its attention where professional expertise and judgment matter most.
For companies already using Microsoft Dynamics 365 Business Central, Payables Agent can represent a concrete first step toward intelligent automation of financial and accounting processes.
And the question worth asking is not simply: “Can we use AI to process invoices?” It is: “How much of our team’s time can be freed up for activities that truly create value?”
The Arggo team can work with you to analyze your organization’s financial and accounting processes and identify the scenarios where the AI capabilities of Business Central can deliver the most relevant benefits.
