💫🗒️ERP Systems: Microsoft Dynamics 365's Financial Tags [Notes]

Disclaimer: This is work in progress intended to consolidate information from the various sources and not to provide a complete overview of all the features. Please refer to the documentation for a complete overview!

Last updated: 23-Mar-2025

[Dynamics 365] Financial Tags

• {def} user-defined metadata elements used to track additional information on accounting entries for analytics or processes purpose
• provide an additional layer of metadata
• {objective} eliminate the need to use document numbers, descriptions, or financial dimensions [1]
• stored on the accounting entries that are created for the transactions [1]
• {benefit} improved accuracy 
• ensure each transaction is linked with the correct accounting and auditing elements, enhancing the accuracy in financial reporting and compliance [8]
• {benefit} streamlined processes 
• by automating the categorization of financial transactions, financial tags affect a more efficient invoicing process [8]
• {benefit} better financial track 
•  allow for granular tracking of expenses and revenues, enabling more detailed financial analysis [8]
• shown as separate columns on voucher transactions and similar GL inquiry forms 
• legal entity specific
• can be shared by using the Shared data feature [3]
• designed to support any amount of reuse
• do not default from master data
• {feature|planned} defaulting will be enabled through user-defined rules
• similar to financial dimensions
• an alternative to creating financial dimensions
• structured (account structures, account rules, validation) 
• designed for medium to high reuse 
• the two are most likely mutually exclusive
• every transaction that supports dimensions will eventually support financial tags 
• unstructured 
• no structure, no rules, no validation
• require a delimiter between the tag values
• via General ledger parameters >> Financial tags
• it can be deactivated but not deleted 
• ⇐ helps ensure that the tag values remain available for reporting on posted general ledger entries can easily be activated and deactivated at any time
• the label of each financial tag can be changed at any time, even after transactions are posted
• if transactions have been posted for a specific financial tag, the tag values don't change
• tag values
• are associated with an accounting entry
• can be reused 
• have header to line defaulting
• are stored as simple text 
• do not reference other data 
• are not validated at any time, including during entry and posting
• can be entered or edited at any time prior to posting 
• can be changed at any time after posting 
• by enabling "Allow edits to internal data on general ledger vouchers" feature
• up to 20 financial tags can be defined
• e.g. Customers, Vendors, Projects, PO numbers, Payment references
• each is 100 characters [1]
• {type} text 
• free text with no lookup 
• {type} custom list
• free text with lookup 
• {type} list
• predefined list of many common types of data with lookup 
• list values are also not validated
• supported by
• general journals
• customer and vendor payment journals, including entities 
• {operation} editing
• values can be entered or edited at any time prior to posting 
• values can be changed at any time after posting 
• by enabling "Allow edits to internal data on general ledger vouchers" feature
can be disabled at any time [1]
• any values that were entered for financial tags on transactions will be maintained in the database [1]
• values will no longer be visible on any transactions or in inquiries [1]
journals and transactions support for tags
[10.0.32] introduced
• [10.0.37] [1]
• general journal, including entities 
• global general journal
• allocation journal
• fixed asset journal
• all asset leasing journals
• periodic journal
• reporting currency adjustment journal
• customer payment journal, including entities 
• vendor payment journal, including entities 
• invoice journal (vendor)
• global invoice journal (vendor)
• invoice register
• SO documents 
• Sales order, packing slip and customer invoice
• {feature} "Enable financial tags for sales order invoicing"
• voucher transactions and Transactions for [account] forms 
• general journal account entry reporting entity 
• ledger settlement (manual settlement)
• [10.0.41|PP] PO documents
• {feature} "Enable financial tags for purchase order invoicing"
• {feature} [10.0.42] financial tag rules 
• allow to enter default value or automatically populate values in financial tags [7]
• {benefit} ensure consistency and efficiency in transaction tagging [7]
• ⇐ essential for accurate financial tracking and reporting [7]
• journals support [7]
• general journal
• global general journal
• allocation journal
• reporting currency adjustment journal
• invoice journal (vendor)
• {operation} Create a financial tag rule
• via General ledger >> Chart of accounts >> Financial tags >> Financial tags >> New >>
• {operation} Copy a financial tag rule within legal entity
• copies a rule that is defined for one transaction entry point to another entry point in the same legal entity [7]
• {operation} Copy a financial tag to other legal entity
• copies rules to any legal entity where financial tags are defined and active. Select one or more rules to copy to another legal entity [7]
• {feature} rule-based defaulting engine for financial tags 
• e.g. default the vendor name to financial tag XX 
• {feature} financial tag defaulting rules
• {feature} valuate storing financial tags directly on subledger data 
• e.g. store financial tag values in the bank subledger to use with advanced bank reconciliation matching rules

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References:
[1] Microsoft Learn (2025) Dynamics 365 Finance: Financial tags [link]

[2] Microsoft Learn (2025) Dynamics 365 Finance: Differences between financial tags and financial dimensions [link]

[3] Microsoft Learn (2025) Dynamics 365 Finance: Microsoft Learn (2022) Financial dimensions [link]

[4] Dynamics on Demand (2025) Financial Tags in Microsoft Dynamics 365 Finance | 10.0.32 [link]
[5] Ramit Paul (2025) Financial Tags in Microsoft Dynamics 365 Finance and Operations [link]
[6] Microsoft Learn (2025) Dynamics 365 Finance: Financial tag rule reference (preview) [link]
[7] Microsoft Learn (2025) Dynamics 365 Finance: Financial tag rules (preview) [link]
[8] Dynamics Global Edge IT Solutions (2024) Financial Tags For Purchase Order Invoicing In MS Dynamics365 F&O [link]

Resources:
[R1] Dynamics365lab (2024) Ep. 120:4 Exploring Financial Tags in Dynamics 365 F&O [link]
[R2] Nextone Consulting (2024) New Feature: Financial Tag Rules in Dynamics 365 SCM 10.0.42 [link]

[R3] Dynamics on Demand (2024) Financial Tags in Microsoft Dynamics 365 Finance | 10.0.32 [link]
[R4] Axcademy (2023) Is this the end to Financial dimensions in D365FO as we know them? [link]
[R5] HItachi Solutions (2024) New Feature in Dynamics 365 Finance - Financial Tags [link]

Acronyms:
D365 F&O - Dynamics 365 for Finance and Operations

GL - General Ledger
GA - General Availability
LE - Legal Entity
PO - Purchase Order
PP - Public Preview
SO - Sales Order

💫🗒️ERP Systems: Microsoft Dynamics 365's Business Performance Analytics (BPA) [notes]

Disclaimer: This is work in progress intended to consolidate information from the various sources and not to provide a complete overview of all the features. Please refer to the documentation for a complete overview!

Last updated: 15-Mar-2025

[Dynamics 365] Business Performance Analytics (BPA)

• {def} centralized reporting hub within D365 F&O designed to streamline insights and help organizations make faster, data driven decisions [3]
• solution designed to transform organization's data into actionable insights [1]
• provides an intuitive out-of-box data model along with familiar tools like Microsoft Excel and Power BI for self-service analytics [4]
• data extracted from D365 is classified in BPA in the form of value chains
• ⇐ a group of business processes on top of the value chain [4]
• {benefit} allows to simplify data insights by providing a unified view of business data across entities in near real time [4]
• {benefit} allows to streamline financial and operations reporting to reduce the cycle times [4]
• {benefit} allows users of all technical abilities to quickly access and analyze data to facilitate data driven decisions [4]
• {benefit} provides auditors with direct access to financial data, making the audit process more efficient
• {benefit} enables ease of use through familiar apps like Excel and Power BI, in addition to AI driven insights and automation in this platform that can be scalable and extendable [4]
• {feature} extends into Microsoft Fabric
• {benefit} provide a scalable, secure environment for handling large data sets and ensuring insights are always powered by the latest technology [3]
• {feature} ETL process 
• involves extracting data from finance and operations database, transforming and loading it into Dataverse [4]
• each of the entities required for the generation of the dimensional model for the value chains that were mentioned earlier, they are backed by the underlying tables in finance and operations database [4]
• installed in Dataverse, virtual  entities that are created will then pull in the data into the managed data lake [4]
• the data is then transformed to generate the dimensional  model which is then pushed into the embedded Power BI workspace in the form of analytical tables [4]
• BPA consumes this data from Power BI workspace to render the power BI reports [4]
• this data can also be extended to Fabric if there is a need to consolidate data from multiple sources [4]
• {feature} reports 
• designed to provide a detailed overview of an organization's financial health [8]
• further reports will be added to expand the coverage for the value chains [8]
• out-of-box reports can't be modified
• ⇐ users cannot rename, delete or edit these type of reports [8]
• there’s the option to duplicate the base report and edit the version thus created [8]
• can be shared with other users who have access to BPA 
• ⇐ they can receive an in-app notification [8]
• can be shared over email with another user by entering user’s email address [8] 
• one can configure whether the recipient can edit or view the report [8]
•   {feature} allows to create a new Power BI or Excel report from scratch [8]
• {option} start with a blank report or duplicate an existing report [8]
• {feature} data refresh
• automatic data refreshes run currently two times a day [4]
• at 12:00 AM and 12:00 PM UTC
• the volume of data is also constrained by the storage capacity of the A3 SKU for Power BI Embedded [1]
• future release, may support additional data reporting capacity [1]
• ⇐ so that larger data sets can be reported and analyzed [1]
• the target is to have refreshes every hour or less [3]
• data volume will be initially for about eight quarters of data [4]
• extensibility will be supported with bring your own Fabric [4]
• architecture
• SaaS solution
• {capability} immediate deployment 
• businesses can start to analyze data and generate insights with minimal setup [1]
• {capability} comprehensive reporting and dashboards
• provides access to a wide range of preconfigured reports that cover multiple business functions [1]
• {capability} near-real-time analytics 
• future releases will offer more frequent data refreshes to enable near-real-time data analysis and reporting
• {capability} predictive insights 
• future releases will introduce predictive analytics capabilities that enable businesses to 
• forecast trends
• identify risks
• seize opportunities [1]
• {capability} user-friendly interface 
• intuitive design ⇒ minimal training
• fosters broader adoption 
• enables a data-driven culture across the organization [1]
• {capability} cost-effectiveness
• available as part of D365 license
• ⇒ provides advanced analytics without requiring significant investments in IT infrastructure [1]
• DaaS solution
• {capability} organizations can integrate its data models with their existing data warehousing infrastructure in Microsoft Fabric [1]
• maximizes the value of existing data solutions [1]
• positions businesses for future enhancements [1]
• {capability} unified and scalable data models
• customers can build custom models on top of a unified framework
• ensures consistency and scalability across data sets [1]
• {capability} future-proofing with automatic upgrades
• data models integrate seamlessly with future D365 updates
• reduces manual maintenance and ensures access to the latest features [1]
• {capability} consistency and standardization
• data models provide consistency and standardization across data sources
• ensure high data quality and integrity [1]
• {capability} advanced analytics and AI 
• by customizing the data models, organizations can take advantage of advanced analytics and AI capabilities [1]
• deeper insights without having to develop them from scratch [1]
• {capability} enhanced data governance
• unified data models support better data governance by providing standardized data definitions, relationships, and hierarchies [1]
• ensure consistency and quality across the organization [1]
• requires an integrated Power Platform environment [5]
• must be integrated with the Microsoft Entra tenant [5]
• uses shared Dataverse entitlements [1]
• includes access to the data lake [1]
• setup
• dimensions
• the selection of dimensions might affect the dimension groups that are created using these dimensions and the users who are assigned there [7]
• e.g. legal entity, business unit
• dimension groups
• users can select specific values for the legal entity, or add a range of values [7]
• selecting an invalid combination of dimension values, the dimension group will filter out all the records on the report [7]
• {warning} assigning too many dimension groups to a user, slows the load for that user [7]
• roles
• determine which reports the user can access [7]
• security
• secure data through role-based access control on top of the value chains [7]
• the first user who signs into the app is assigned the BPA admin role [7]
• allows a user to access the administrator section of the BPA [7]
• where the security can be set up [7]
• has automatically assigned 
• Microsoft report viewer role 
• the All Access Dimension group [7]
• allow the admin to see the data  in all the reports across all the dimensions [7]
• {feature} dimension-based role-level security
• ensures that users only see the data relevant to them based on their role
•  confidently share reports without duplicating them
• ⇐ data is automatically filtered by organization's security policies [3]
• simple but powerful way to maintain control while providing access for teams that love working in Excel [3]
• accessibility
• can be accessed through either 
• Power Platform
• admins can access BPA app through PowerApps' makeup portal [6]
• Dynamics 365
• through the BPA preview shortcut in the homepage or the default dashboard [6]
• for end users, the BPA preview shortcut is provided when they have certain duties associated to their role(s) [6]
• licensing
• included in D365 F&O license [4]
• requirements
• requires a tier two environment and Dynamics 365 finance version 1.0.38 or later [5]
• {project} timeline
• [2025 wave 1] backup and restore custom reports and analytics
• {benefit} support better lifecycle management and empower customers to develop on sandbox instances before publishing to production [3]
• 2025: available in all regions where F&O is available [3]
• Oct-2024: GA

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References:
[1] Microsoft Learn (2024) Dynamics 365 Finance: What is Business performance analytics? [link]
[2] Microsoft Learn (2025) Business performance analytics (BPA) with Dynamics 365 Finance [link]
[3] Dynamics 365 Finance - Business Performance Analytics 2025 Release Wave 1 Release Highlights [link]
[4] Dynamics 365 Community (2024) Dynamics 365 Bites: Business Performance Analytics Part 1 [link]
[5] Dynamics 365 Community (2024) Dynamics 365 Bites: Business Performance Analytics Part 2 [link]
[6] Dynamics 365 Community (2024) Dynamics 365 Bites: Business Performance Analytics Part 3 [link]
[7] Dynamics 365 Community (2024) Dynamics 365 Bites: Business Performance Analytics Part 4 [link]   
[8] Dynamics 365 Community (2024) Dynamics 365 Bites: Business Performance Analytics Part 5 [link]
[9] Microsoft Learn (2024) Dynamics 365: Business performance analytics introduction [link] 

Acronyms:
AI - Artificial Intelligence
BPA - Business Performance Analytics
D365 F&O - Dynamics 365 for Finance and Operations
DaaS - Data-as-a-Service
ETL - Extract, Transfer, Load
GA - General Availability
MF - Microsoft Fabric
PP - Public Preview
SaaS - Software-as-a-Service
SKU - Stock Keeping Unit
UTC - Coordinated Universal Time

𖣯Strategic Management: Strategic Perspectives (Part II: The Elephant in the Room)

Strategic Management Perspectives

There’s an ancient parable about several blind people who touch a shape they had never met before, an elephant, and try to identify what it is. The elephant is big, more than each person can sense through direct experience, and people’s experiences don’t correlate to the degree that they don’t trust each other, the situation escalating upon case. The moral of the parable is that we tend to claim (absolute) truths based on limited, subjective experience [1], and this can easily happen in business scenarios in which each of us has a limited view of the challenges we are facing individually and as a collective. 

The situation from the parable can be met in business scenarios, when we try to make sense of the challenges we are faced with, and we get only a limited perspective from the whole picture. Only open dialog and working together can get us closer to the solution! Even then, the accurate depiction might not be in sight, and we need to extrapolate the unknown further.  

A third-party consultant with experience might be the right answer, at least in theory, though experience and solutions are relative. The consultant might lead us in a direction, though from this to finding the answer can be a long way that requires experimentation, a mix of tactics and strategies that change over time, more sense-making and more challenges lying ahead. 

We would like a clear answer and a set of steps that lead us to the solution, though the answer is as usual, it depends! It depends on the various forces/drivers that have the biggest impact on the organization, on the context, on the organization’s goals, on the resources available directly or indirectly, on people’s capabilities, the occurrences of external factors, etc. 

In many situations the smartest thing to do is to gather information, respectively perspectives from all the parties. Tools like brainstorming, SWOT/PESTLE analysis or scenario planning can help in sense-making to identify the overall picture and where the gravity point lies. For some organizations the solution will be probably a new ERP system, or the redesign of some processes, introduction of additional systems to track quality, flow of material, etc. 

A new ERP system will not necessarily solve all the issues (even if that’s the expectation), and some organizations just try to design the old processes into a new context. Process redesign in some areas can be upon case a better approach, at least as primary measure. Otherwise, general initiatives focused on quality, data/information management, customer/vendor management, integrations, and the list remains open, can provide the binder/vehicle an organization needs to overcome the current challenges.

Conversely, if the ERP or other strategical systems are 10-20 years old, then there’s indeed an elephant in the room! Moreover, the elephant might be bigger than we can chew, and other challenges might lurk in its shadow(s). Everything is a matter of perspective with no apparent unique answer. Thus, finding an acceptable solution might lurk in the shadow of the broader perspective, in the cumulated knowledge of the people experiencing the issues, respectively in some external guidance. Unfortunately, the guides can be as blind as we are, making limited or no important impact. 

Sometimes, all it’s needed is a leap of faith corroborated with a set of tactics or strategies kept continuously in check, redirected as they seem fit based on the knowledge accumulated and the challenges ahead. It helps to be aware of how others approached the same issues. Unfortunately, there’s no answer that works for all! In this lies the challenge, in identifying what works and makes sense for us!

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Resources:
[1] Wikipedia (2024) Blind men and an elephant [link]

🧭Business Intelligence: Mea Culpa (Part IV: Generalist or Specialist in an AI Era?)

Business Intelligence Series

Except the early professional years when I did mainly programming for web or desktop applications in the context of n-tier architectures, over the past 20 years my professional life was a mix between BI, Data Analytics, Data Warehousing, Data Migrations and other topics (ERP implementations and support, Project Management, IT Service Management, IT, Data and Applications Management), though the BI topics covered probably on average at least 60% of my time, either as internal or external consultant. 

I can consider myself thus a generalist who had the chance to cover most of the important aspects of a business from an IT perspective, and it was thus a great experience, at least until now! It’s a great opportunity to have the chance to look at problems, solutions, processes and the various challenges and opportunities from different perspectives. Technical people should have this opportunity directly in their jobs through the communication occurring in projects or IT services, though that’s more of a wish! Unfortunately, the dialogue between IT and business occurs almost only over the tickets and documents, which might be transparent but isn’t necessarily effective or efficient! 

Does working only part time in an area make one person less experienced or knowledgeable than other people? In theory, a full-time employee should get more exposure in depth and/or breadth, but that’s relative! It depends on the challenges one faces, the variation of the tasks, the implemented solutions, their depth and other technical and nontechnical factors like training, one’s experience in working with the various tools, the variety of the tasks and problem faced, professionalism, etc. A richer exposure can but not necessarily involve more technical and nontechnical knowledge, and this shouldn’t be taken as given! There’s no right or wrong answer even if people tend to take sides and argue over details.

Independently of job's effective time, one is forced to use his/her time to keep current with technologies or extend one’s horizon. In IT, a professional seldom can rely on what is learned on the job. Fortunately, nowadays one has more and more ways of learning, while the challenge shifts toward what to ignore, respectively better management of one’s time while learning. The topics increase in complexity and with this blogging becomes even more difficult, especially when one competes with AI content!

Talking about IT, it will be interesting to see how much AI can help or replace some of the professions or professionals. Anyway, some jobs will become obsolete or shift the focus to prompt engineering and technical reviews. AI still needs explicit descriptions of how to address tasks, at least until it learns to create and use better recipes for problem definition and solving. The bottom line, AI and its use can’t be ignored, and it can and should be used also in learning new things. It’s amazing what one can do nowadays with prompt engineering! 

Another aspect on which AI can help is to tailor the content to one’s needs. A high percentage in the learning process is spent on fishing in a sea of information for content that is worth knowing, respectively for a solution to one’s needs. AI must be able to address also some of the context without prompters being forced to give information explicitly!

AI opens many doors but can close many others. How much of one’s experience will remain relevant over the next years? Will AI have more success in addressing some of the challenges existing in people’s understanding or people will just trust AI blindly? Anyway, somebody must be smarter than AI, and here people’s collective intelligence probably can prove to be a real match. 

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💫🗒️ERP Systems: Microsoft Dynamics 365's Fixed Assets [Note]

Disclaimer: This is work in progress intended to consolidate information from various sources.

[Dynamics 365] Fixed Assets (aka FA)

• {def} assets that a company owns and uses in the daily operations of the company and are not intended for resale to customers [1]
• ⇐ the same asset might be classified as a FA in one company and as a current asset or inventory item in another [1]
• represent permanent value and not just expenditures in the year of acquisition [1]
• typically depreciated, or expensed, over their useful life
• other adjustments might also be necessary
• their useful lives span multiple years [1]
• treated as balance sheet transactions in the year that they are acquired, and are posted as an asset to a balance sheet account [1]
• {action} review asset value in the balance sheet (net book value) 
• should be reviewed at least one time each year  [1]
• it can be reviewed monthly, quarterly, semi-annually, or annually [1]
• an adjustment of the asset value in the balance sheet (write-down or write-up) might be necessary  [1]
• the adjustments are usually caused by some extraordinary occurrences in the market that affect the price if the company were to reacquire the asset. [1]
• ⇐ accounting principles in some countries or regions prohibit the write-up of assets [1]
• {action} remove asset from the accounting books
• when a company no longer has use for the asset [1]
• ⇐ because it is either being sold or scrapped [1]
• the original acquisition price and accumulated depreciation of the asset are reversed, and any surplus or loss from the disposal is posted to the profit and loss statement [1]
• {action} dispose asset
• the fixed asset transactions that were previously posted are reversed out of the original accounts [1]
• the net amounts are then moved to the appropriate account for gain and loss for asset disposal [1]
• Fixed asset groups 
• allow specifying default attributes for every FA that is assigned to a group [1]
• include the service life and the depreciation convention.
• FAs are assigned to a group when they are created [1]
• the only required field when creating a FA [1]
• Books 
• track the financial value of a fixed asset over time by using the depreciation configuration that is defined in the depreciation profile
• ⇐ each book tracks an independent financial lifecycle of an asset [1]
• assigned to fixed asset groups
• {default} the books assigned to the FA group are then assigned to the FA [1]
•  books that are configured to post to the GL are associated with a posting profile
• GL accounts are defined for each book in the posting profile and are used when fixed asset transactions are posted [1]
• ⇐ the configuration is the default setting because it's typically used for corporate financial reporting [1]
• books that don't post to the GL post only to the Fixed asset subledger and are typically used for tax reporting purposes [1]
• this approach allows the flexibility to delete historical transactions for the asset book because they haven't been committed to GL [1]
• {field} Post to general ledger
• {No}disables posting to the general ledger for the book
• sets the Posting layer field automatically to None
• each book that is attached to a FA is set up for a particular posting layer that has an overall depreciation objective [1] 
• derived books
• setup in addition to the standard books [1]
• simplify the posting of FA book transactions that are planned for regular intervals
• one book is chosen as the primary book, which is usually the one used for accounting depreciation [1]
• then attach to it other books that are set up to post transactions in the same intervals as the primary book [1]
• ⇐ tax depreciation books are often set up as derived books [1]
• allow posting transactions to different posting layers at the same time [1]
• acquisitions, acquisition adjustments and disposals can be set up with it
• use acquisition when the book and the derived book should be applied to the FA from the time of the fixed asset acquisition [1]
• if the primary book and the derived books have the same intervals regarding sale or disposal, all FA transaction types are available for the setup of a derived book [1]
• depreciation posted in the derived book will be the same amount as was posted for the primary book [1]
• if the depreciation methods are different between the books, one should not generate depreciation transactions by using the derived process [1]
• ⇐ the books can then be attached to specific fixed assets [1]
• the specified derived transactions are posted against the derived books as an exact copy of the primary transaction [1]
• ⇒ derived transactions are typically set up for acquisitions and disposals, not for depreciation transactions [1]
• when posting transactions for a book that contains derived books, the derived book transactions are posted automatically in journals, purchase orders, or free text invoices [1]
• when preparing the primary book transactions in the FA journal, one can view and modify the amounts of the derived transactions before posting them [1]
• certain accounts are updated only once by postings of the primary book [1]
• e.g. sales tax and customer or vendor accounts
• derived book transactions are posted to the accounts that have been defined for the derived book in the FA posting profiles page [1]
• {exception} books that are set up to post transactions at intervals other than the primary book intervals must be attached to the FA as separate books and not as derived books [1]
• depreciation
• an entry that expenses the part of the asset's original purchase price that was used during the year [1]
• FAs are depreciated in different ways for different purposes
• depreciation for tax purposes 
• calculated by using current tax rules to achieve the highest possible depreciation before taxes [1]
• depreciation for reporting purposes
• calculated according to accounting laws and standards [1]
• the various kinds of depreciation are calculated and recorded separately in the posting layers [1]
• depreciation methods
• straight line
• computed by taking the costs of the acquisition and dividing those costs by the expected service life of the asset [1]
• the rules are usually defined in the local legislation [1]
• depreciation profiles 
• allow configuring via rules how the value of an asset is depreciated over time
• it's needed to define the method of depreciation, the depreciation year (calendar year or fiscal year), and the frequency of depreciation [1]
• a primary depreciation profile is assigned to every book
• ⇐ books also have an alternative (aka switchover depreciation) profile, if this type of profile is applicable [1]
• the depreciation proposal will switch to this profile when the alternative profile calculates a depreciation amount that is equal to or greater than the default depreciation profile [1]
• ⇐ enable the Calculate depreciation option to automatically include the FA book in depreciation runs [1]
• usually refers to tangible assets, but intangible assets can also use depreciation profiles [1]
• financial assets are considered non-depreciable [1]
•  e.g. shares of stocks or bonds 
• extraordinary depreciation profile
• used for additional depreciation of an asset in unusual circumstances [1]
• e.g. record depreciation that results from a natural disaster
• depreciation calculation methods:
• Straight line service life
• Reducing balance
• Manual
• Factor
• Consumption
• Straight line life remaining
• 200% reducing balance
• 175% reducing balance
• 150% reducing balance
• 125% reducing balance
• ⇐ most companies use one or more of the straight-line methods, one or more of the reducing balance methods, or the manual method [1]
• ⇐ the rationale for all methods is to allocate or accrue the depreciable value of the asset into accounting periods [1]
• the depreciable value of the asset is the acquisition price reduced by a scrap value, if any
• ⇐ many depreciation profiles with the same depreciation method can be created for different calculations [1]
• posting profile 
• must be defined for each book that will post to GL, but it can also be defined at a more detailed level [1]
• e.g. can be defined for the combination of a book and a FA group, or even for an individual FA book [1]
• Set up a posting profile record general ledger
• for each posting profile, one must select the relevant transaction type and book, and then designate the ledger accounts [1]
• {option} Create depreciation adjustments with basis adjustments 
• {selected} depreciation adjustments will be automatically created when the value of the asset is updated [1]
• {not selected} the updated asset value will only affect depreciation calculations going forward [1]
• {not enabled} for an asset, the depreciation proposal skips the asset [1]
• {optional} define special depreciation allowances, or bonus depreciation, for a specific combination of a fixed asset group and a book [1]
• assign a priority to the special depreciation allowance to specify the order in which allowances are calculated when multiple allowances are assigned to a book [1]
• Journal names 
• create the journal names that should be used with the FA journal.
• set the Journal type field to 'Post fixed assets'
• set the Voucher series field so that the journal names are used for the FA journal [1]
• FA journals should not use the One voucher number only setting
• ⇐ because a unique voucher number is required for several automated processes, such as transfers and splits [1]
• each journal used for depreciation is defined by its journal name for only one posting layer [1]
• the posting layer in the journal can't be changed [1]
• the restriction helps guarantee that transactions for each posting layer are kept separate [1]
• at least one journal name must be created for each posting layer [1]
• for books that don't post to GL create a journal where the posting layer is set to None [1]
• {parameter} Capitalization threshold
• determines the assets that are depreciated
• if a purchase line is selected as a fixed asset, but it doesn't meet the specified capitalization threshold, a fixed asset is still created or updated, but the Calculate prorated depreciation option is set to No. Therefore, the asset won't be automatically depreciated as part of the depreciation proposals.
• {option} Automatically create depreciation adjustment amounts with disposal
• {Yes}, the asset depreciation is automatically adjusted, based on the depreciation settings at the time of asset disposal [1]
• [Purchase orders] 
• {option} Allow asset acquisition from Purchasing
• {Yes} asset acquisition occurs when the invoice is posted [1]
• {No} the FA can be put on a PO and invoice, but the acquisition won't be posted [1]
• the posting must be done as a separate step, from the FA journal
• {option} Create asset during product receipt or invoice posting 
• {enabled} a new asset is created while posting
• ⇒ the asset doesn't have to be set up as a fixed asset before the transaction
• [Purchase requisitions] {option} Check for fixed assets creation during line entry
• Fixed asset number sequence 
• can be overridden by the FA group number sequence if it has been specified [1]
• depreciation conventions for groups of assets that are part of the same book
• {action} updating the depreciation convention
• delete all depreciation transactions that exist for those assets [1]
• delete all transactions for depreciation adjustments, transactions for bonus depreciation, and transactions for extraordinary depreciation for those assets [1]
• {action} update the depreciation convention for assets that have already been disposed
• delete first the existing disposal transactions [1]
• delete all transactions that were generated because of the disposal process [1]
• {action} after updating the depreciation convention for assets
• process depreciation and extraordinary depreciation for each asset [1]
• make manual depreciation adjustments, if any adjustments are required [1]
• [General Ledger] main accounts 
• {default} the ledger accounts that are defined are used for your FA transactions [1]
• {recommendation} define the ledger accounts that are used during the disposal processes, both disposal sales and disposal scraps [1]
• {recommendation} to help guarantee that transactions are correctly reversed, set up accounts for each type of transaction that you use in your business [1]
• the main account should be the original account set on the posting profile for the transaction type, and the offset account should the gain and loss for disposal account [1]
• {exception} for the net book value, the main account and the offset account should be set to the gain and loss for disposal account [1]
• various combinations of main accounts can be created depending on the level of detail needed in GL [1]
• can be based on transaction types, books, and other main accounts [1]
• the value of all FAs is typically summarized in multiple main accounts that are required for financial reporting [1]
• each time a transaction is posted for a FA, the appropriate main accounts are updated
• ⇐ the main accounts always show the updated value [1]
• the main accounts that are used for posting are determined by the options for ledger integration that are specified for the item model group [1]
• the main accounts that are used vary, depending on whether an asset is assigned to the purchase order line [1]
• the accounts are derived from the posting profile for each item group [1]
• [Inventory management]
• inventory items can be transferred to FAs either as an acquisition or as part of an acquisition [1]
• an inventory item becomes a FA acquisition through 
• inventory journal
• one can enter the acquisition of FA that the LE has produced or constructed for itself [1]
• PO
• one PO line creates one fixed asset, regardless of the quantity [1]
• items can be set up for both resale and internal use [1]
• using specific receipt and issue accounts on item groups for FAs, one can use the same inventory item both for internal purchases and as stock for resale [1]
• acquisition proposal
• ⇐ with it a FA book acquisition transaction is created [1]
• if a book acquisition includes a derived book, the derived book acquisition transaction is also created [1]
• the effect the acquisition of fixed assets has on inventory depends on LE's setup [1]
• posting rules control the decrease in inventory when an acquisition is posted [1]
•  the inventory isn't always decreased when posting invoices related to FA [1]
• FAs for internal use must have an account type of 
• 'Fixed asset receipt'
• used to track FA's receipt
• when posting a Vendor invoice, use the FA receipt account if any of conditions hold:
• the invoice line contains an existing FA for internal purposes [1]
• the New fixed asset? check box is selected for the product receipt line that is posted [1]
• the 'Create a new fixed asset' check box is selected for the vendor invoice line [1]
• typically, this account is an expense account
• 'Fixed asset issue' 
• used to track the issuing of the FA to the recipient [1]
• when an asset is acquired by using a PO, the FA issue account offsets the FA debit account [1]
• the asset acquisition can be posted either when posting the Vendor invoice or when posting the asset acquisition in the FA journal, possibly by using an acquisition proposal [1]
• ⇐ setup for either an item group or an individual item by using the Purchase order tab on the Item group or Posting page [1]
• if an inventory reservation exists when product receipts are posted, one can’t assign or create a FA from the line [1]
• the accounts that FA transactions are posted to depend on two factors:
• whether the assets are purchased or constructed by the LE [1]
• the transaction type of the asset
• connects the inventory transaction to the posting profile in FAs [1]
• because the posting profile in FAs defines which accounts are updated, the selection of a transaction type for a FA is also, indirectly, the selection of the main accounts that the transaction is posted to [1]
• for both constructed and purchased fixed assets, the transaction type is typically Acquisition or Acquisition adjustment [1]
• [Accounts receivable]
• the integration uses posting profiles that are set up in FAs
• activated when a FA, book, and FA transaction type is selected for a Customer invoice before the customer invoice is posted [1]
• selling a FA must be done via Free text invoices
• ⇐ because FAs aren’t part of Inventory management [1]
• [Accounts payable]
• typically, FAs are acquired from external vendors
• asset acquisitions are posted either
• when posting the Vendor invoices
• FA accounts are updated whenever a Vendor invoice for a FA acquisition is posted [1]
• the transaction is posted according to the posting profiles that are set up in FAs for the various FA transaction types [1]
• from FAs
• [Project management and accounting]
• a project can be associated with a FA asset that is affected by the project
• each phase, task, or subproject can be associated to a different asset [1]
• one FA can be associated with each project record [1]
• the association is created via the Fixed asset number field on the Projects page [1]
• typically, applies to projects related to work, maintenance, or improvements for the FA [1]
• the project type must be either Internal or Cost project
• clear the Fixed asset number field on the Projects page to delete the association [1]
• when the project is completed, a write-up adjustment for the asset isn’t created automatically [1]
• ⇒ must be created manually [1] 
• one can designate a FA created or manufactured as part of an estimate project [1] 
• at the end of an estimate project, one can automatically post a FA acquisition transaction [1]

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Resources:
[1] Microsoft Learn (2023) Configure fixed assets management in Dynamics 365 Finance [link]

Acronyms:
D365 F&O - Dynamics 365 for Finance and Operations
FA - Fixed Asset
GL - General Ledger
LE - Legal Entity
PO - Purchase Order

💫🗒️ERP Systems: Microsoft Dynamics 365's Invoice Capture (Features) [Notes]

Disclaimer: This is work in progress intended to consolidate information from the various sources and not to provide an overview of all the features. Please refer to the documentation for a complete overview!

In what concerns the releases see [2].
Last updated: 10-Feb-2025

Invoice Capture - Main Components [3]

AI Model

• {feature} prebuilt model (aka Invoice processing model) [by design]
• can handle the most common invoices in various languages
• owned by Microsoft and cannot be trained by the customers
• {feature} custom prebuilt models [planned]
• built on top of the prebuilt model to handle more complex invoice layouts
• only requires to train the exceptional invoices
• after a model is published, additional mapping is required to map the model fields to the invoice files
• {feature} custom model [by design]
• requires training the model from scratch 
• costs time and effort
• supports the Charges and Sales Tax Amount fields [1.5.0.2]
• support lookup lists on custom fields [1.6.0.x]

Channels

• flows that collect the invoices into one location 
• there's always a 1:1 relationship between flows and channels
• multiple channels can be defined using different triggers based on Power Automated connectors
• {feature}default channel for Upload files [1.0.1.0]
• {feature} supports multiple sources via flow templates [by design]
• Outlook.com
• Microsoft Outlook 365
• Microsoft Outlook 365 shared mailbox [1.1.0.10]
• to achieve similar behavior one had to modify the first steps of the generated flow with the "When a new email arrives in a shared mailbox (V2)" trigger
• SharePoint
• OneDrive
• OneDrive for business [1.0.1.0]
• {feature} assign legal entity on the channel
• the LE value is automatically assigned without applying additional derivation logic [1]
• invoices sent via predefined channels are captured and appear on the 'Received files' page

Configuration groups 

• allow managing the list of invoice fields and the manual review settings 
• can be assigned for each LE or Vendors. 
• all the legal entities in the same configuration group use the same invoice fields and manual review setting
• default configuration group 
• created after deployment, can't be changed or deleted

Fields

• {feature} standard fields 
• Legal entity 
• organizations registered with legal authorities in D365 F&O and selected for Invoice capture
• {feature} allow to enforce role-based security model
• {feature} synchronized from D365 F&O to CRM 
• {missing feature} split the invoices between multiple LEs
• {feature} Sync deleted legal entities 
• when legal entities are deleted in D365, their status is set to 'Inactive' [1.9.0.3]
• ⇐ are not going to be derived during Invoice capture processing
• ⇒ invoices with inactive legal entities cannot be transferred to D365FO
• ⇐ same rules apply to vendor accounts
• Vendor master 
• individuals or organizations that supply goods or services
• used to automatically derive the Vendor account
• {feature} synchronized from D365 F&O to CRM
• synchronization issues solved [1.6.0.x]
• {feature}Vendor account can be derived from tax number [1.0.1.0]
• {feature} Synchronize vendors based on filter conditions [1.9.0.3]
  • one can set filter conditions to only synchronize vendors that are suitable for inclusion in Invoice capture
• {feature} Sync deleted vendor accounts 
• when vendor accounts are deleted in D365, their status is set to 'Inactive' [1.9.0.3]
• Invoice header
• {feature} Currency code can be derived from the currency symbol [1.0.1.0]
• Invoice lines
• Item master
• {feature} Item number can be derived from External item number [1.0.1.0]
• {feature} default the item description for procurement category item by the value from original document [1.1.0.32/10.0.39]
• Expense types (aka Procurement categories) 
• Charges
• amounts added to the lines or header
• {feature} header-level charges [1.1.0.10]
• {missing feature}line-level charges 
• {feature}Financial dimensions 
• header level [1.1.0.32/10.0.39]
• line level [1.3.0.x]
• Purchase orders
• {feature} PO formatting based on the number sequence settings
• {missing feature}PO details
• {missing feature} multiple POs, multiple receipts 
• {missing feature} Project information integration
• {workaround} the Project Id can be added as custom field on Invoice line for Cost invoices and with this the field should be mapped with the corresponding Data entity for transferring the value for D365 F&O
• {feature} custom fields [1.1.0.32/10.0.39]

File filter

• applies additional filtering to incoming files at the application level
• with the installation a default updatable global file filter is provided
• can be applied at different channel levels
• {event} an invoice document is received
• the channel is checked first for a file filter
• if no file filter is assigned to the channel level, the file filter at the system level is used [1]
• {configuration} maximum files size; 20 MB
• {configuration} supported files types: PDF, PNG, JPG, JPEG, TIF, TIFF
• {configuration} supported file names 
• filter out files that aren't relevant to invoices [1]
• rules can be applied to accept/exclude files whose name contains predefined strings [1]

Actions 

• Import Invoice
• {feature} Channel for file upload
• a default channel is provided for directly uploading the invoice files
• maximum 20 files can be uploaded simultaneously
• Capture Invoice
• {feature} Invoice capture processing
• different derivation rules are applied to ensure that the invoices are complete and correct [1]
• {missing feature} differentiate between relevant and non-relevant content}
• {missing feature} merging/splitting files
• {workaround} export the file(s), merge/split them, and import the result
• Void files [1.0.1.0]
• once the files voided, it is allowed to be deleted from Dataverse
• saves storage costs
• Classify Invoice
• {feature} search for LEs
• {feature} assign LE to Channel
• AP clerks view only the invoices under the LE which are assigned to them
• {feature} search for Vendor accounts by name or address 
• Maintaining Headers
• {feature} multiple sales taxes [1.1.0.26]
• {missing feature} rounding-off [only in D365 F&O]
• {feature} support Credit Notes [1.5.0.2]
• Maintaining Lines
• {feature} Add/remove lines
• {feature} "Remove all" option for deleting all the invoice lines in Side-by-Side Viewer [1.1.0.26]
• Previously it was possible to delete the lines one by one, which by incorrectly formatted big invoices would lead to considerable effort. Imagine the invoices from Microsoft or other cloud providers that contain 5-10 pages of lines. 
• {feature}Aggregate multiple lines [requested]
• Now all lines from an invoice have the same importance. Especially by big invoices, it would be useful to aggregate the amounts from multiple lines under one. 
• {feature} Show the total amount across the lines [requested]
• When removing/adding lines, it would be useful to compare the total amount across the lines with the one from the header. 
• Check the UoM consistency between invoice line and linked purchase order line
• For the Invoice to be correctly processed, the two values must match. 
• Support for discounts [requested]
• as workaround, discounts can be entered as separate lines
• Transfer invoice
• 
  
• Automation
• {parameter} Auto invoice cleanup
•  automatically cleans up the transferred invoices and voided invoices older than 180 days every day [1]
• Use continuous learning 
• select this option to turn on the continuous learning feature
• learns from the corrections made by the AP clerk on a previous instance of the same invoice [1]
• records the mapping relationship between the invoice context and the derived entities [1]
• the entities are automatically derived for the next time a similar invoice is captured [1]
• {missing feature} standard way to copy the continuous learning from UAT to PROD
• {feature} migration tool for continuous learning knowledge
• allows us to transfer the learning knowledge from one environment to another [1.6.0.x]
• {feature} Continuous learning for decimal format [1.9.0.3]
  • allows the system to learn from the history record and automatically apply the correct decimal format on the amount fields
  • {requirement} manually correct the first incoming invoice and do the successful transfer
• {feature} date format handling
• fixes the issue with date formatting, which is caused by ambiguity in date recognition [1.8.3.0]
• when a user corrects the date on the first invoice, the corresponding date format will be automatically applied to the future invoice if it is coming from the same vendor
•  enabled only when the "Using continuous learning" parameter is active
• Confidence score check
• for the prebuilt model the confidence score is always the same 
• its value is returned by the AI Builder service
• confidence score can only be improved only when the customer prebuilt model is used 
•  it can be increased by uploading more samples and do the tagging accordingly
• a low confidence score is caused by the fact that not enough samples with the same pattern have been trained
• {parameter} control the confidence score check [1.1.0.32/10.0.39]
• Manage file filters

User Interface

• Side-by-side view [by design]
• users can adjust column widths [1.8.3.0]
• improves the review experience
• History logs [1.0.1.0]
• supported in Received files and Captured invoices
• help AP clerks know the actions and results in each step during invoice processing 
• Navigation to D365 F&O [1.0.1.0]
• once the invoice is successfully transferred to D365 F&O, a quick link is provided for the AP clerk to open the Pending vendor invoice list in F&O
• Reporting
• {missing feature} consolidated overview across multiple environments (e.g. for licensing needs evaluation)
• {missing features} metrics by Legal entity, Processing status, Vendor and/or Invoice type
• {workaround} a paginated report can be built based on Dataverse

Data Validation

• [Invoice Capture] derivation rules 
• applied to ensure that the invoices are complete and correct [1]
• {missing feature} derive vendor using the associated email address
• {parameter} Format purchase order 
• used to check the number sequence settings in D365 F&O to format the PO number [1]
• {parameter} Derive currency code for cost invoice
• used to derive the value from invoice master data in D365 F&O [1]
• ⇐ the currency code on PO Invoices must be identical to the one on PO
• {parameter} Validate total sales tax amount 
• validates the consistency between the sales tax amount on the Sales tax card and the total sales tax amount, when there's a sales tax line [1]
• {parameter} Validate total amount 
• confirm alignment between the calculated total invoice amount and the captured total amount [1]
• [Invoice capture] automation
• {feature} Automatically remove invalid field value [1.9.0.3]
  • when enabled, the system automatically removes the value if it doesn't exist in the lookup list
  • eliminates the need to manually removing values during the review, streamlining the process
  • {scenario} invalid payment terms errors
• [D365 F&O] before workflow submissions [requested]
• it makes sense to have out-of-box rules 
• currently this can be done by implementing extensions
• [D365 F&O] during workflow execution [by design]

Dynamics 365 for Finance [aka D365 F&O]

• Attachments 
• {parameter} control document type for persisting the invoice attachment in D365 F&O [1.1.0.32/10.0.39]
• Invoice Capture
• {parameter} select the entities in scope
• {parameter}differentiate by Invoice type whether Vendor invoice or Invoice journal is used to book the invoices
• {parameter} Transfer attachment
• Fixed Assets
• {missing feature} create Fixed asset automatically during the time the invoice is imported
• Vendor Invoice Journal 
• {missing feature} configure what journal the invoice is sent to
• the system seems to pick the first journal available
• {parameter} control journal name for creating 'Invoice journal'  [1.1.0.32/10.0.39]
• {missing feature}grouping multiple invoices together in a journal (e.g., vendor group, payment terms, payment of method)
•  Approval Workflow
• {missing feature} involve Responsible person for the Vendor [requested]
• {missing feature} involve Buyer for Cost invoices [requested]
• {missing feature} differentiator between the various types of invoices [requested]
• {missing feature} amount-based approval [requested]
• Billing schedule
• {feature} integration with Billing schedules
• {feature} modify or cancel Billing schedules
• Reporting
• {missing feature} Vendor invoices hanging in the approval workflow (incl. responsible person for current action, respectively error message)
• {missing feature} Report for GL reconciliation between Vendor invoice and GL via Billing schedules
• {missing feature} Overview of the financial dimensions used (to identify whether further setup is needed)

Licensing

• licensing name: Dynamics 365 E-Invoicing Documents - Electronic Invoicing Add-on for Dynamics 365
• customers are entitled to 100 invoice capture transactions per tenant per month
• if customers need more transactions, they must purchase extra Electronic Invoicing SKUs for 1,000 transactions per tenant per month [5] 
• the transaction capacity is available on a monthly, use-it-or-lose-it basis [5]
• customers must purchase for peak capacity [5]
• only the captured invoices are going to be considered as valid transactions [4]
• files filtered by the file filter setting won't be counted [4]

Architecture

•  invoice capture is supported only when the integrated Dataverse environment exists [4]

Security

• [role] Invoice capture operator
• must be included in the role settings to 
• successfully run the derivation and validation logic in Invoice capture [5]
• transfer the invoice to D365F&O [5]
• the role must be added to the corresponding flow user on the app side [5]
•  is only applied on the D365 side [4]
• ⇒ it doesn't block user to login to Invoice capture [4]
• ⇐ the corresponding access to the virtual entities will be missed [4]
• then the user will receive an error [4]
• [role] Environment maker 
• must be assigned to the Accounts payable administrator if they create channels in Invoice capture [5]

Previous post <<||>> Next post

Resources:
[1] Microsoft Learn (2023) Invoice capture overview (link)
[2] Yammer (2023) Invoice Capture for Dynamics 365 Finance (link)
[3] Microsoft (2023) Invoice Capture for Dynamics 365 Finance - Implementation Guide
[4] Yammer (2025) Quota/licensing follow up [link]
[5] Microsoft Learn (2024) Dynamics 365 Finance: Invoice capture solution [link]

Release history (requires authentication)

• 1.9.1.x (04-Feb-2025)
• 1.9.0.3 (18-Dec-2024)
• 1.8.3.0 (29-Oct-2024)
• 1.7.0.x (23-Aug-2024)
• 1.6.0.x (20-May-2024)
• 1.5.0.2 (17-Apr-2024)
• 1.4.0.x (26-Feb-2024)
• 1.3.0.x (30-Jan-2024)
• 1.2.1.x (28-Dec-2023)
• 1.1.0.32 (07-Nov-2023)
• 1.1.0.26 (03-Nov-2023)
• 1.1.0.10 (18-Aug-2023)

Acronyms:
AI - Artificial Intelligence 
AP - Accounts Payable
F&O - Finance & Operations
LE - Legal Entity
PO - Purchase Order
SKU - Stock Keeping Units 
UoM- Unit of Measure

💫⚙️ERP Systems: Microsoft Dynamics 365's Vendor Invoices Processing (Setup Areas)

ERP Systems

Invoices can be set up to be imported automatically in Dynamics 365 for Finance and Operation (D365 F&O) via Invoice Capture (see process). Besides the Invoice Capture-related set up, there are several areas related to Vendor invoice's processing:

General Ledger

Accounts for automatic transactions need to be defined at least for the 'Vendor invoice rounding off' and 'Rounding variance', respectively for the 'Exchange rate gain' and 'Exchange rate loss', if this wasn't done already.

To facilitate accounts' reconciliation and reporting, one can enable a Batch transfer rule for the Source document type 'Vendor invoice' and thus one journal is used for each Vendor invoice. This also makes sure that the Description from Invoice will be taken over in the Journal, which facilitates accounts' reconciliation.

Subscription Billing

In case one needs to defer the amounts over a time interval (e.g. x months), as it's the case for prepayments, the integration with Subscription Billing on the Vendor side in F&O seems to work with minimal configuration. A Billing schedule is created for each Invoice distribution and can be modified or cancelled after the Invoice is posted, if needed.

If your organization uses Subscription Billing also for Accounts Receivables (AR), one might need to compromise on the setup because the same parameters are used for both modules. 

In what concerns accounts' reconciliation, there seems to be a 1:1 mapping between the Schedule line and the General Ledger (GL) posting, a table with the mapping between the records being available. One can build thus a Paginated report to display the mapping between AP and GL, if the infrastructure is in place (e.g. by building a data lakehouse/warehouse based on F&O, see post). 

Fixed Assets

One can enable the creation of Fixed assets by checking the "Create asset during product receipt or invoice posting" radio button in Fixed assets parameters.

The feature "create the fixed asset automatically during the time of invoice import" for PO-based Invoices (with "Create Fixed Asset" flag set at line level) doesn't seem to be supported yet.

Vendor Invoice Journals

Before Invoice Capture, Vendor invoice journals were helpful for posting summarized cost invoices that are not associated with POs (e.g. expenses for supplies or services). One can still use this approach, however if the line-based details are important, then it makes sense to use Pending vendor invoice with Service items or Procurement categories.  

A single Vendor invoice is created as one Vendor invoice journal. 

Organization Administration

When using workflows, setting the same language for all LEs can reduce the amount of redundant information maintained in the workflow(s), otherwise the texts need to be provided for each language. 

Default descriptions can be enabled for Purchase orders' invoice ledger and vendor to carry the same description entered Pending Vendor Invoices in Invoices and Journals. The functionality works also for Cost invoices.

Ideally, Invoice's description should have been maintained in Invoice capture and/or Microsoft should have provided a default description also for it. 

System

Unless there's a requirement to post manually the journals from subledger to GL, a batch transfer for subledger journals must be created for each LE.

One can enable email notifications for the users participating in workflows and use workflow delegations for the intervals the respective users are on leave. 

All users participating in the workflow must be available also as active employees. It makes sense to do latest when the integration goes Live. Moreover, the Users need to have the appropriate permissions for the roles they have in the process.

Vendor Invoice Automation

There's further functionality available under the 'Vendor Invoice Automation' label (see [1], [2]), though the following are the most important ones: 

• Automatically apply prepayments to vendor invoices
• Automatically submit imported invoices to the workflow system.
• Match product receipts to pending vendor invoice lines.

Recurring Vendor Invoice Templates

Microsoft introduced with 10.0.38 PU a new feature called 'Vendor invoice templates', which allows creating recurring vendor invoices without the need to enter all the vendor invoice information for each separate invoice (see [3]). There seems to be no information available whether any integration between this feature and Invoice Capture will be supported.

E-Invoicing

EU countries need to enforce the Directive 2014/55/EU for Vendor and Customer invoices. The directive requires that the electronic exchange of invoice documents between suppliers and buyers to occur over government-held third-party solutions. Each country has its own system(s) and regulations with different scope and timelines. Some countries have already requirements for 2024, respectively 2025 and there are similar projects in US and other countries. 

Even if Microsoft started this year (2023) to provide country-specific integrations for e-Invoicing, for the moment there seem no information available on how e-Invoicing will integrate with Invoice Capture.

Previous post <<||>> Next post

Resources:
[1] Microsoft Learn (2023) Vendor Invoice Automation (link)
[2]Microsoft Dynamics 365 (2023) The Future of Finance: Unlocking the Benefits of Accounts Payable Automation (link)
[3] Hylke Britstra (2023) Recurring vendor invoice templates (link)
[4] Dan Edwards (2023) AP Automation at DynamicsCon (link)