Dynamics 365 – Streamlining Accounts Payable with Recurring Vendor Invoices

Efficient management of accounts payable processes is important for the financial health of any organization. One key element of accounts payable for many organizations is the handling of regular, repetitive, predictable expenses. Microsoft recently added a new feature to Dynamics 365 Finance and Supply Chain that allows organizations to manage these recurring vendor invoices much more efficiently, allowing businesses to save time and reduce errors.

Recurring vendor invoices are regular payments made to vendors for ongoing services or supplies. Examples include monthly maintenance contracts, memberships, regular supplies, subscription fees, or lease payments. Automating the processing of these invoices can significantly streamline accounts payable operations, reducing manual effort, minimizing errors, and ensuring timely payments.

Key Features of Accounts Payable Recurring Vendor Invoices:

1. Recurring Invoice Templates: D365 allows users to create recurring invoice templates for vendors. These templates capture essential details such as payment terms, method of payment, invoice line details, and account posting information.

2. Automated Invoice Generation: Once a recurring invoice template is set up, the system can be prompted to generate invoices based on the specified parameters. This automation eliminates the need for manual data entry and reduces the risk of delay.

3. Approval Workflows: Recurring invoices can be routed through approval workflows within F&O, just like manually entered invoices, to ensure proper authorization before payments are processed.

4. Flexible Payment Scheduling: Businesses can configure flexible payment schedules for recurring invoices based on their cash flow requirements. Whether it’s monthly, quarterly, or annually, F&O can accommodate various payment frequencies.

Benefits of Using Accounts Payable Recurring Vendor Invoices:

1. Time Savings: By automating invoice generation and approval workflows, Dynamics 365 frees up valuable time for accounts payable staff to focus on higher-value tasks.

2. Improved Accuracy: Automated processes reduce the likelihood of errors associated with manual data entry, ensuring that invoices are processed accurately and promptly.

3. Cost Efficiency: Streamlining accounts payable operations with Dynamics 365 results in cost savings associated with reduced administrative overhead and improved invoice management.

4. Better Vendor Relationships: Timely and accurate payments facilitated by Dynamics 365 contribute to stronger vendor relationships, fostering trust and potentially leading to favorable terms and discounts.

Now that we have discussed the key features and benefits of using AP recurring invoices, we can walk through the setup and processing of recurring invoices. The setup steps and screenshots  below will be based on a scenario where a business has a rental contract that must be generated for vendor account US-109, Property Management LLC, for $2,500/month. The rental costs are split between various business units and departments.

Setting Up Recurring Invoice Templates:

1. Navigate to Accounts Payable > Invoices > Recurring invoices > Vendor invoice template
2. Populate the Template name and Description fields
3. On the General fasttab, populate the Posting profile and if needed, the Sales tax group field
4. On the Payment fasttab, populate the following fields as needed: Currency, Terms of payment, Method of payment, Payment specification, Payment schedule, and Cash discount

5. On the Financial dimensions fasttab, users have the option to select an Accounting distribution template or populate default dimensions to which the generated invoices will be applied

• In this scenario, an Accounting distribution template has been selected that will distribute the rental invoices to various business units and departments

6. On the Invoice lines fasttab, the details for the lines can be populated including Description, Item number/Procurement category, Unit, Quantity, Unit Price/Amount, and Invoice text

7. Save the Vendor invoice template and it is then ready for use

Associating Invoice Templates to a Vendor:

1. Navigate to Accounts Payable > Vendors > All vendors > Invoice tab > Recurring invoices

2. Click New

• Set Active to Yes and select the Template
• Populate the Billing start date
• Under the Recurrence End heading, select the conditions that will end the invoice recurrence (End date, Maximum cumulative amount, No end date)
• Under the Recurrence heading, configure the recurrence requirements

3. Save Vendor recurring invoice association

Generating Recurring Invoices:

1. Navigate to Accounts Payable > Invoices > Recurring invoices > Generate vendor recurring invoices
2. Enter invoice date
3. Enter generation date
4. Select the template to have invoices generated
   • If more than one recurring invoice should be generated, multiple templates can be selected at once
5. Click Ok to generate the invoices

Review generated recurring invoices

1. Navigate to Accounts Payable > Invoices > Recurring invoices > Post pending vendor recurring invoices.
2. To review invoice details, click the Recurrence ID to open an individual invoice.

Additional Note:

As of the current release, when recurring invoices are created and posted, they do not appear on the Open vendor invoices list. They do not appear on the list because the ‘Approved’ and ‘Approved by’ fields are not populated as part of the recurring invoice generation process. In order to have the created invoices appear on the Open vendor invoices list, the Approved and Approved by fields have to be manually updated.

One way to update this information is to:

1. Navigate to Accounts Payable > Invoices > Pending vendor invoices
2. Select a recurring invoice to open the invoice details

3. Select the Header button

4. In the Approval fasttab, mark the Approved toggle switch to ‘Yes’ and populate the Requested approver field

5. Save and Close