Integrating accounts payable automation with Dynamics 365 Finance

In this blog post [originally published in the Microsoft AI Cloud marketplace blog], Antti Kosunen, Chief Business Development Officer and co-Founder at Dooap, analyzes key aspects of accounts payable automation solutions and discusses how a "best of both worlds" approach provides value for firms using Microsoft Dynamics 365 Finance or Supply Chain Management.

Organizations worldwide face the human-intensive, error-prone, and fraud-risky business process of handling vendor invoices. The need for automation is evident, and that’s why hundreds of software solutions exist on the market. The good news for Microsoft Dynamics 365 users is they do not need to review them all.

Overall best-of-breed accounts payable (AP) automation solutions are designed to streamline processes and optimize efficiency, while at the same time complementing, not replacing, the organization's existing enterprise resource planning (ERP) system.

When integrating AP automation with Microsoft Dynamics 365 Finance, organizations have several technical approaches to choose from. Some organizations might integrate a generic, cloud-based AP automation solution through file or application programming interface (API) connections, while others may choose to embed the AP solution directly inside the ERP. A third option involves deploying a solution that operates independently from the ERP, offering its own user experience, while seamlessly integrating with the ERP for data synchronization.

Comparison of different integration approaches

1. Generic AP automation with file-based or API integration

A generic AP automation solution typically operates as a fully standalone cloud solution that interfaces with the ERP through file-based transfers or APIs. These solutions are not designed for any specific ERP. These ERP-agnostic solutions are ideal for companies that may use multiple ERPs or expect to switch systems in the future.

Pros:

• It enables a unified AP tool and process, even if you have multiple underlying ERP systems.
• It is possible to keep the same AP tool when switching the ERP.

Cons:

• Depending on how frequently files are exchanged or APIs are triggered, there can be delays and errors in synchronizing data between the systems. This may require manual workarounds, halt your AP process, and result in inaccurate financial records.
• Custom integrations typically require significant initial development and ongoing maintenance effort, especially when the ERP system is upgraded.
• Lacks advanced ERP features; ERP-agnostic solutions are designed to meet generic needs rather than your specific ERP logic.
• There is a risk that the total cost of ownership, data quality, process efficiency, and user satisfaction is different than expected.
• Best suited for: Organizations that use multiple ERP systems or have legacy systems where seamless integration is not an option.

2. Embedded AP automation within the ERP

An embedded AP automation solution is embedded directly into the ERP system. This approach integrates AP functions into the ERP, allowing users to manage all financial processes within a single platform.

Pros:

• Since the AP automation is running inside the ERP, there is no need for external data synchronization.
• Users can manage the entire process within the familiar ERP system and its user interface, simplifying training needs.
• All data is processed and available in real time, with no delays between systems.
• The best-of-breed embedded AP solutions are certified by Microsoft, which ensures technical compatibility with the Dynamics 365 version upgrades.

Cons:

• If you are using multiple ERP systems, this solution works only with Dynamics 365.
  Embedding AP automation within the ERP often requires a significant amount of external code added to the standard ERP’s code base. Getting the new features to AP automation always requires a service break in ERP and a full deployment cycle in the ERP.
• Since the embedded solution relies fully on the ERP platform, it adds complexity to the ERP (more batch jobs, AIF queues, workflows, DB logging, etc.) and affects the performance and usability (consumes the ERP resources).
• In this approach the OCR tool is typically an external solution that breaks the single platform philosophy.
• The ERP UI/UX is typically not very intuitive and responsive, and the embedded solution is tied to this limitation.
• Best suited for: organizations that want full data centralization and an all-in-one ERP solution and are prepared to accept potential tradeoffs in performance and user experience.

3. External solution with seamless integration ("best of both worlds")

The Dooap AP automation solution strikes a balance between tight integration and independent usability. It operates as a standalone cloud solution but integrates seamlessly with Microsoft Dynamics 365 Finance. The solution provides a user-friendly UI, specifically designed for AP professionals. Users can manage the AP tasks within Dooap while all relevant data, rules, and business logic are exchanged and validated with the ERP in real time. Dooap requires close to zero configuration in the ERP, making it easy to implement, upgrade, and maintain.

Pros:

• It provides the robust and advanced features of a modern and innovative AP automation solution while maintaining seamless data integration with the ERP. New features can be delivered without a service break for the ERP.
• It requires less customization and configuration of the ERP compared to an embedded solution, reducing cost and complexity.
• The solution is flexible and scales as the business grows without affecting the ERP’s performance.
• Since the AP automation tool has a dedicated UI, it can offer a more purpose-based, intuitive user experience designed for AP professionals.
• It is not tied to the ERP’s limitations and stiffness in user interfaces and frameworks (batch jobs, AIF, workflows, DB logging, etc.).
• Microsoft certification ensures technical compatibility with Dynamics 365 version upgrades.

Cons:

• If you use multiple ERP systems, this solution works only with Dynamics 365.
• Dooap runs on the Microsoft Azure cloud and supports both cloud and on-premises Dynamics 365. However, if you are running Dynamics 365 on-premises and not allowed to have any data in the cloud, Dooap is cloud-only and not suitable for you.

Best suited for: Organizations that want to leverage the strengths of a dedicated, feature-rich AP automation system while having robust data sync with ERP. This is ideal for companies using Microsoft Dynamics 365 Finance, as it completes the shortcomings of the ERP and provides an easy, responsive, and scalable user experience with real-time data sync and ERP business logic validation.

Conclusion

When deciding on an AP automation solution for Microsoft Dynamics 365 Finance, organizations must weigh the benefits and drawbacks of each approach. Generic external solutions typically provide a modern user interface and a rich feature set but fall short in terms of complexity and cost of integrating with your ERP.

If you are committed to a certain ERP system, like Dynamics 365 Finance and Dynamics Supply Chain Management, minimize the risks and surprises and consider only the AP solutions – whether external or embedded – that are:

A) certified by Microsoft, to ensure technical compatibility and future-proof ERP version upgrades;

B) focused solely on Dynamics 365 Finance and Dynamics Supply Chain Management, understanding deeply the logic and nuances of your ERP.

While embedded solutions offer the simplicity of the all-in-one approach and real-time data, they often come at the cost of usability, performance, and maintenance. Dooap believes the "best of both worlds" approach provides the most value for organizations using Microsoft Dynamics 365 Finance. It offers a perfect balance between superior usability and tight integration.

Additional resources

• Watch on-demand demo of Dooap AP Automation for Dynamics 365 Finance
• Buyer's Guide: Assessing the right AP automation software for your business
• See Dooap AP Automation for Dynamics 365 in Microsoft AppSource

Case studies of customers who moved away from an embedded solution to Dooap:

• Luck Companies
• Inlook