Why the Payables Agent Is the New Standard for Microsoft Dynamics 365 Business Central AP Automation

As we reach the end of 2025, the landscape of accounts payable (AP) has undergone a significant transformation. For years, finance teams operated under the weight of manual data entry, fragmented invoice processing, and error-prone overhead expense management. That narrative changed decisively this year.

Following its General Availability on November 7, 2025, the Payables Agent in Microsoft Dynamics 365 Business Central has moved from a highly anticipated preview to a new operational standard for modern finance teams.

The Payables Agent in Business Central is an AI-powered accounts payable automation capability designed to eliminate manual invoice processing, improve accuracy in overhead expense accounting, and accelerate financial close. This capability sets a new baseline for Business Central payables automation, replacing manual invoice entry with governed, intelligent processing.

If your team is still manually entering utility bills or software subscriptions as you prepare for year-end close, you are looking at the old way of doing things. Here’s how the Payables Agent has redefined accounts payable in 2025 and what it means for your business as we head into 2026.

Reducing Manual Overhead Invoice Processing in Business Central with the Payables Agent

Historically, overhead expenses, operating costs such as rent, utilities, phone bills, leasing, and software subscriptions have been one of the most inefficient areas of finance operations.

Unlike supply chain costs governed by structured purchase orders, overhead invoices often arrive as unstructured PDF attachments via email. Before the Payables Agent, these invoices required a finance clerk to:

• Monitor inboxes
• Download attachments
• Manually transcribe invoice data into Business Central

This manual workflow consumed time, introduced errors, and delayed posting. This shift represents a practical evolution of accounts payable automation in Business Central, focused on real operational efficiency rather than experimental AI features.

Today, the Payables Agent automates this process end to end. The agent monitors a dedicated Microsoft 365 email inbox, identifies incoming invoice attachments, and imports relevant PDFs directly into the Inbound E-Documents area of Business Central, ready for processing. What was once repetitive manual work is now a governed, automated AP workflow.

How Azure OCR Processes Invoices in Business Central

The real value of the Payables Agent lies not just in automation, but in intelligence.

Once invoices are imported, they are processed using Azure Document Intelligence, Microsoft’s advanced OCR and document understanding service. This technology goes far beyond basic text recognition, it extracts, interprets, and structures invoice data so it can be accurately categorised and posted. This approach to Business Central OCR invoice processing ensures invoice data is captured accurately while maintaining transparency and auditability.

One of the most positively received improvements since the July 2025 public preview has been the enhanced PDF attachment viewer. Finance users can now:

• View the extracted invoice data
• Compare it side-by-side with the original PDF
• Validate OCR accuracy in a near full-screen experience

This ensures that while AI performs the heavy lifting, human oversight and audit control remain fully intact, a critical requirement for finance teams.

Predictive Accounting in Business Central and Its Impact on AP Roles

The most meaningful shift introduced by the Payables Agent in late 2025 is not technological, it is operational. Accounts payable professionals are moving away from data entry and toward data verification and financial oversight. Rather than adding complexity, this approach demonstrates how AI-powered AP in Business Central can be applied responsibly, with finance teams remaining in full control.

When the Payables Agent creates a purchase invoice, it doesn’t simply populate fields at random. It uses predictive accounting logic based on:

• Company Purchase History – learning from how similar invoices were handled previously
• Accounting Policies – respecting your chart of accounts, dimensions, and posting rules
• Active Learning – continuously improving accuracy as the agent processes more invoices

The result is a purchase invoice that is pre-classified, pre-validated, and ready for approval and posting. This shift allows finance teams to focus on Exception handling, Compliance, Analysis and Month-end and year-end close activities, rather than spending time on repetitive clerical work.

Who Should Use the Payables Agent in Business Central?

The Payables Agent delivers the most value for organisations that:

• Process recurring overhead invoices such as utilities, rent, subscriptions, and services
• Rely heavily on emailed PDF invoices
• Want to reduce manual AP effort without sacrificing control or auditability
• Are preparing for faster month-end and year-end closes
• Are modernising finance operations with AI-enabled ERP capabilities

For growing and mid-market organisations using Business Central, this capability represents a practical and low-risk entry point into AI-driven finance automation.

Future Capabilities of the Payables Agent in Business Central

While the current version of the Payables Agent has automated overhead expense sourcing and email-based PDF invoice processing, planned enhancements point to broader automation scenarios.

Microsoft’s release plans indicate that upcoming capability expansions will include easier matching of purchase invoices with open purchase orders and receipts, helping reduce manual effort in invoice reconciliation.

In addition, Business Central’s electronic invoicing (E-Document) framework already supports external e-invoice formats such as PEPPOL through connectors and service providers, and this capability is expected to evolve further as digital invoicing standards mature.

As e-invoicing adoption expands globally, these enhancements will help ensure that Business Central remains aligned with compliance requirements and supports increasingly structured, automated invoicing workflows.

How to Enable the Payables Agent in Business Central

For organisations that have not yet enabled the Payables Agent, activation is straightforward but requires administrative oversight. The agent can be enabled by Business Central administrators, makers, and analysts.

Because the agent relies on a dedicated Microsoft 365 mailbox, the most important setup step is ensuring vendors send invoices to the correct monitored inbox.

Once configured, finance teams can begin automating accounts payable immediately, without disruptive process changes.

If organisations need guidance with setup, governance, or rollout, Buy Business Central can provide support to ensure the Payables Agent is configured correctly from day one.

FAQs: Payables Agent in Business Central

1. What invoices does the Payables Agent support?

The Payables Agent in Microsoft Dynamics 365 Business Central is designed to process overhead and operating expense invoices, particularly those received as PDF attachments via email. These typically include utilities, rent, subscriptions, professional services, and other non-purchase-order invoices. Support for additional structured e-invoice formats is expected to expand over time as Business Central’s e-invoicing capabilities evolve.

2. Is the Payables Agent suitable for mid-sized businesses?

Yes. The Payables Agent is well suited for small and mid-sized organisations using Business Central that want to reduce manual invoice processing without adding complexity. It delivers immediate productivity gains for finance teams while maintaining human oversight, making it practical for organisations with lean AP functions.

3. Does the Payables Agent replace accounts payable staff?

No. The Payables Agent does not replace AP professionals. Instead, it automates repetitive data entry tasks and shifts the AP role toward review, exception handling, and financial control. This allows finance teams to focus on higher-value activities such as compliance, analysis, and period-end close rather than manual invoice entry.

Conclusion: A New Standard for Accounts Payable in Business Central

As 2025 comes to end, the Payables Agent has proven to be more than a convenience feature. It represents a fundamental shift in how accounts payable is executed in Microsoft Dynamics 365 Business Central.

By reducing errors, eliminating manual overhead, and reclaiming valuable time, the Payables Agent allows finance teams to move beyond tedious transactional work and focus on strategic financial management.

For organisations using Business Central, this capability is no longer optional; it is fast becoming the new standard for modern, AI-enabled finance operations.

At Buy Business Central, we help organisations implement these capabilities and translate them into real operational outcomes. If you’d like to explore how this applies to your environment, contact us today.