You probably spend more time than you like in Microsoft Dynamics 365 Finance and Operations. The platform has undoubtedly saved you a lot of time and hassle, but there’s still much more you can do to increase efficiency. Automating some of the finance tasks you do is one of the most direct ways to reduce cost and risk in D365 F&O. The platform can handle more of these tasks than many teams use it for.
Now, you’re probably wondering where to start. This article covers five processes worth automating first, why each one matters and what changes once the automation is set up.
Process automation in Dynamics 365 Finance and Operations: Key takeaways
- Process automation in Dynamics 365 F&O is one of the most direct ways to reduce the manual work, cost and risk for finance teams.
- The ERP can take on more of that work than many teams currently use it for, and the challenge is figuring out where to start.
- The five processes that are generally best to automate first are accounts payable, approval workflows, vendor payment runs, bank reconciliation and other recurring tasks.
- Accounts payable is typically the best place to begin, because entering, matching and approving invoices is high in volume and prone to manual error.
- Each of these is something you set up and configure to fit how your business works, rather than a feature that runs out of the box. ERP Mechanics, a managed IT services and consulting company specializing in Microsoft Dynamics 365 Finance and Operations, can help you optimize your setup.
What process automation means in Dynamics 365 F&O: Key terms to know
D365 F&O offers several automation tools, and it helps to know what’s generally available to you before you get serious about automating specific processes:
- Process automation allows users to set up recurring processes that run in the background, with a calendar view of what is scheduled and what has already happened.
- Workflow routes documents like invoices to the right people for approval, based on set rules.
- Business events allow an action triggered in D365 F&O to trigger something in another third-party system, such as a Microsoft Teams message.
- Batch jobs run processing tasks in the background.
5 Dynamics 365 Finance and Operations processes to automate early
The five processes below are where most finance teams see the quickest returns from automation, because they tend to carry the heaviest manual load:
1) Accounts payable
Accounts payable typically involves the most manual processes in any finance function, which is why it’s often the first process to automate. Invoices are entered by hand, matched against purchase orders and receipts and routed for approval, often passing through several people before any payments are processed.
A survey by the Institute of Financial Operations and Leadership found that 68% of respondents manually key invoices into their ERP/accounting software, and only 32% have an automated process. Unfortunately, that level of manual effort comes with many opportunities for errors.
Once vendor invoice automation is configured, D365 F&O handles much of the manual accounts payable work that slows finance teams down. Invoices are matched to product receipts and purchase orders against the matching policies you define, submitted into the approval workflow automatically, and held for review only when something falls outside the rules. The busy finance team moves from processing every invoice manually to managing the exceptions.
2) Approval workflows
Approvals are a very common bottleneck, and an easy one to underestimate. An expense claim waits in someone’s inbox, but the person who needs to sign it doesn’t see it. With no dependable record of who approved what, finance teams are spending hours each week chasing approvals.
Dynamics 365 Finance and Operations helps you manage approvals through its workflow engine, which you can configure to set rules. You can set up workflows by document type and route expense reports, purchase orders and other relevant documents to the right approver, escalate them when there’s a delay and reassign them when someone is away, recording every step of the process as it goes.
3) Vendor payment runs
Once invoices are approved, someone still has to take the time to build the payment run. A missed due date can strain important vendor relationships, and mistakes in payment runs take time to fix.
D365 F&O can generate payment runs automatically through automated vendor payment proposals. Once configured, it runs on a schedule you set and selects invoices to pay by due date or cash discount date, creating the payments in a vendor payment journal. What it doesn’t do is post them. The journal is created but left for review, so your existing validation, approval and posting controls stay intact.
4) Bank reconciliation
Manual bank reconciliation is slow and error-prone exactly at the point in the month where you need to get tasks done quickly. It’s also a very strong automation candidate because, for the most part, matching a statement to the ledger follows clear, repeatable rules.
Advanced bank reconciliation in D365 F&O imports electronic bank statements and reconciles them against your Finance bank transactions using matching rules you define. Those rules run in sequence and clear every transaction that meets them, so only genuine exceptions are left for someone to match manually.
It takes some setting up (something we at ERP Mechanics can help you with), but once it’s in place, the reconciliation runs each time a statement comes in. Most of the matching is then handled for you autonomously, saving you time that’s much better spent elsewhere.
5) Broader automation opportunities: Recurring tasks
Beyond core finance processes, a large amount of routine work runs on a set schedule throughout the month. Handled manually, these tasks are easily delayed or even missed, with nothing signaling that they need prompt attention.
Batch jobs are ideal for moments like this. A batch job runs your routine processes in the background on a schedule, so the work that used to sit on someone’s long to-do list happens automatically. You can set it to alert you when a job finishes or fails, so nothing stalls in the background when you’re not looking.
Business events keep your team informed in real time. When something significant happens in D365 F&O, such as an invoice being approved, the system can automatically alert the right person via the communication channel of their choice, or start an action in another tool your business uses.
Here’s what combining these two features might look like in practice: a batch job could check each day for invoices due soon and use a business event to drop a reminder into Teams for whoever needs to act.
How to decide what to automate first
Automating everything at once is rarely, if ever, the right approach. An honest look at where the manual effort is causing the most problems will point to a few processes in desperate need of automation.
Start with the highest-volume, most repetitive work
The first thing to look at is how much manual effort processes require, which is really a question of how often processes run. In D365 F&O, that usually points to accounts payable. The work is high-volume, follows the same steps and happens near constantly, which is why vendor invoice and workflow automation are so often the first things a finance team does to save time.
Consider the cost of mistakes
Automating regular, repetitive tasks is one thing, but it’s also worth considering what a mistake costs when it happens. A vendor payment run is a good example. It happens less often than invoice capture, but paying the wrong amount, missing a cash discount window or creating a duplicate payment are expensive and embarrassing errors.
Ranking the processes by what an error would roughly cost, alongside how often these errors occur, will show you where automation will make the biggest difference.
ERP Mechanics: Your Dynamics 365 Finance and Operations partner
Approached mindfully, these early D365 F&O automations pay off quickly and build the case for the next round of automation. Knowing where to start, and what to leave until later, isn’t always clear from the inside. An experienced Dynamics 365 Finance and Operations specialist can work through your business’s processes with you, agree on what to automate and in what order.
At ERP Mechanics, we work with both end users and Microsoft Partners on D365 F&O projects, helping finance and operations teams automate the processes that still tie up too much of their time. Our team helps you with process mapping, configuration, integration and ongoing D365 F&O support, so the automation is built around how your business actually works and keeps running reliably after the project ends.
Because we are built as a flat, modern team rather than a traditional hierarchical consultancy, decisions happen quickly and support is there when you need it. Throughout the project, we focus on reducing risk and cutting costs wherever possible at every stage.
Thinking about automating more of your Dynamics 365 Finance and Operations setup, but don’t know where to start? Get in touch and we’ll talk through your options.