How to automate invoice processing in Dynamics 365 Finance

Dynamics 365 Finance imports vendor invoices through the Data management workspace, using the Vendor invoice header and Vendor invoice line data entities, as set out in Microsoft’s guide to importing data for vendor invoices. To automate the whole process, each supplier invoice is captured, read and coded into that structure, then matched, approved and posted through the integration, so nobody keys or builds an import file.

This applies to Dynamics 365 Finance, including Finance and Operations deployments. Everything about Microsoft’s product here comes from Microsoft Learn, checked on 16 October 2026.

How do vendor invoices get into Dynamics 365 Finance?

There are two documented routes. A clerk can create an invoice on the Pending vendor invoices page under Accounts payable > Invoices. Or invoices can be imported as data, which Microsoft describes for data migration and for integration with other systems.

The import uses a set of related entities:

• Vendor invoice header: creates the invoice header, and has to be imported before anything else on the invoice.

• Vendor invoice line: the invoice lines, imported after the header.

• Vendor invoice charges and Vendor invoice line charges: charges at header and line level.

• Vendor invoice document attachment V2: files attached to the invoice header.

Microsoft’s Vendor invoice header entity page lists Pending vendor invoices among its related menu items, says it covers invoices linked to a purchase order and invoices without one, and notes that an imported header can be updated only before the invoice is posted.

What you need before you import

• Access to the Data management workspace, at System administration > Workspaces > Data management. Jobs can be restricted to particular security roles, users or legal entities.

• A source data format for the file. Microsoft lists Excel, XML and delimited formats, and recommends Unicode encoding.

• Vendor accounts, sales tax groups and currencies already set up, because the header fields point at them. The invoice number field is required.

• If you want default financial dimensions on the header, the Default dimension format configured under Financial dimension configuration for integrating applications.

• The right legal entity. By default, invoices are imported into the company where the job runs.

How to import vendor invoices into Dynamics 365 Finance

1. In the Data management workspace, create an import job and give it a name.

2. Add the Vendor invoice header and Vendor invoice line entities, plus the charges and attachment entities if you use them, and set the source data format for each.

3. Upload your file for each entity. If the column names in your file differ from the staging table, use View map to complete the mapping. Required fields are marked with a red asterisk.

4. Sequence the entities so the header is processed before the lines, charges and attachments that depend on it.

5. Select Import to run the job as a one-off batch, or create a recurring data job if invoices will arrive in files regularly.

6. Open the job history and review the execution details: how many records each entity processed, how many failed, and the staged records.

7. Deal with any failures under Accounts payable > Invoices > Import failures > Vendor invoices that failed to import. Edit each record to fix the problem, then select Create pending invoice.

8. Review the new invoices on the Pending vendor invoices page, then match, approve and post them in line with your setup.

Steps checked against Microsoft’s Dynamics 365 Finance help on 16 October 2026.

What does Dynamics 365 Finance automate after the import?

Finance has its own vendor invoice automation for invoices that have already been imported. Microsoft’s automated vendor invoicing overview describes these features, which are turned on in Feature management and controlled by parameters such as Automatically submit invoice to workflow:

• Matching posted product receipts to invoice lines that have a three-way matching policy, as a background process with a maximum number of tries.

• Automatically submitting imported invoices to the workflow system once matching has completed.

• Comparing the imported invoice amount and imported sales tax amount with the amounts Finance calculates. By default the invoice posts only when they agree.

• Simulating posting to run the posting validation without updating any accounts.

There is also an option to generate invoice lines on import when a vendor sends header-only invoices. With it turned on, a header that carries a purchase order number range can have its lines derived from the purchase order or the product receipt. Microsoft marks some of this functionality as preview.

What are the limits of a manual import?

• Someone still has to produce the file. Every supplier invoice has to become header and line rows, with the right vendor account, sales tax group and dimensions, before the job can run.

• Errors show up after the job runs. A missing vendor or an unmapped required field lands in the import failures list, where a clerk fixes it by hand.

• Finance automates what happens once the data is there. Receipt matching and workflow submission start from an imported invoice, so the quality of the data going in decides how many invoices stop for review.

• Attachments need their own entity. The Vendor invoice document attachment V2 entity carries header attachments only, with no line attachments. Microsoft’s exception handling notes say an attachment doesn’t display on a failed invoice and has to be reattached.

How to automate invoice processing in Dynamics 365 Finance end to end

The missing piece is the step before the import: reading each supplier invoice, in whatever format it arrives, and turning it into a clean, coded record. Once that is automated, matching, approval and posting can run on data that is already right.

Stratas connects to Dynamics 365 Finance and Operations through OData and Data Management Framework entities, the same framework described above. Vendor records, main accounts and financial dimensions sync from Finance. Invoices arrive by email, scan or e-invoice, and Stratas extracts header and line-level data from any format, with 89% field-level extraction accuracy.

• Three-way matching against Finance purchase orders and product receipts, including charges, with matching policies, tolerances and payment terms following your configuration.

• Financial dimension coding for cost centres, departments, business units or any custom dimension, learned from your historical postings and the rules you define.

• Approval routing based on your approval hierarchies and signing limits, with exceptions sent to the right owner.

• Posting as vendor invoices with full financial dimension coding, sales tax groups and ledger account assignment.

• Invoices processed across legal entities from one queue, including intercompany scenarios, and in any currency using exchange rates from Finance.

• A full audit trail with links back to voucher numbers and fiscal periods.

Stratas works alongside Power Automate, so existing flows keep running. For more on the matching step, see our guide to three-way matching, and for approvals, our guide to invoice approval workflows. If part of your group runs Business Central, see how to import purchase invoices into Business Central.