Payables Agent in Business Central: What’s New and How It Transforms AP

How Does the Payables Agent Work?

Understanding the Payables Agent’s workflow is essential to appreciating its impact. Below is an end-to-end description of how invoices move from email receipt to draft invoice creation in Business Central:

Monitoring Email for Incoming Invoices

The Payables Agent is configured to monitor a dedicated shared mailbox in Microsoft 365 where vendors send invoices. This mailbox serves as the single source of truth for all incoming invoice emails, minimizing the risk of lost or overlooked documents.

Once an invoice email arrives, the agent detects it automatically, identifying unread emails and retrieving any attached PDF invoices. This eliminates the need for AP staff to manually open emails or download attachments, saving valuable time and effort.

Using an internal-only mailbox for invoices is recommended to reduce noise from unrelated emails, ensuring that only legitimate vendor invoices enter the system.

Importing Invoices into Business Central

Each invoice PDF attachment is imported directly into Business Central’s Inbound E-Documents queue. If an email contains multiple PDF attachments, the agent processes each PDF separately, creating an electronic document record for every invoice.

This electronic document becomes the container that holds all extracted data, and serves as the starting point for further processing.

AI-Powered Data Extraction and OCR

After import, the Payables Agent leverages Azure Document Intelligence, a sophisticated Optical Character Recognition (OCR) and machine learning service, to analyze each invoice. It extracts key fields such as vendor name and address, invoice number, invoice and due dates, line items with quantities and prices, tax amounts, and totals.

Business Central provides tools that allow AP supervisors to validate and review this extracted data easily. For example, an enhanced attachment viewer lets users view the original invoice PDF side-by-side with extracted fields, helping verify accuracy and make corrections if necessary.

The AI engine is even smart enough to flag documents that might not be invoices (like credit notes or purchase orders) so they can be routed appropriately.

Matching or Creating Vendors

Once data extraction is complete, the Payables Agent attempts to match the invoice vendor with existing vendor records in Business Central. If a confident match is found, the invoice is linked accordingly.

When no match exists or the confidence level is low, the agent suggests creating a new vendor record based on extracted details. Importantly, these new vendor records are created in a blocked state, requiring manual review and approval by finance staff before they can be used in transactions — ensuring proper governance and audit controls.

Draft Invoice Creation

With vendor data confirmed, the agent proceeds to draft the purchase invoice. Using historical purchase patterns, account coding, and dimension defaults, it intelligently pre-populates the draft invoice with suggested general ledger accounts, cost centers, and line items.

The draft acts as a preliminary invoice that awaits human review. Finance teams can edit, add, or remove lines, adjust amounts, and update accounting details as necessary.

Review and Approval

Human oversight is a cornerstone of the Payables Agent’s design. Draft invoices generated by the agent are never posted automatically. Instead, designated AP users review the drafts, confirm accuracy, and post invoices into the system.

This ensures the final invoice posting reflects the correct business context, complies with policies, and prevents errors or fraud.